October 21, 2008 / 10:55 PM / 10 years ago

Tax snag arises in Brooklyn Nets development

NEW YORK, Oct 21 (Reuters) - Brooklyn’s Atlantic Yards developer Forest City Ratner Companies on Tuesday said it believes it will be able to get the benefit of tax-free debt under new Internal Revenue Service regulations that govern so-called payments in lieu of taxes.

But a civic group, called Develop Don’t Destroy, which in the past has sued to block the project that includes an arena for the Nets basketball team, hotel and apartments disagreed, saying the new tax rule “disqualifies” this debt.

The developer is seeking as much as $950 million of municipal bonds that will be repaid by so-called payments in lieu of taxes.

(Additional reporting by Ilaina Jonas)

Reporting by Joan Gralla

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