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GlobeSt.com UPDATE: $100M Letter of Credit Seals Arena Deal
By Eric Peterson
Last updated: January 26, 2006 11:06am

NEWARK-After weeks of financial haggling, city officials and the New Jersey Devils hockey team came to an agreement two weeks ago that would keep a new 18,000-seat arena for the team on track. As reported by GlobeSt.com, that agreement hinged on the Devil’s ability to provide a $100-million letter of credit to cover their share of the estimated $310-million cost of the 24-acre, Downtown venue.

The deadline for that letter of credit was this week, and the Devils made that deadline by just hours. The creditor is the Livingston-based finance firm CIT Group Inc. Under the terms of the agreement, the city will tap into the $100-million line of credit only after its own $210-million commitment of public money for the project is tapped out. And the Devils had earlier agreed to pay for any costs above the $310-million ceiling.

“Let this definitive, final agreement leave no doubt that the Devils will start playing in Newark in 2007,” the team’s principal owner, Jeff Vanderbeek, says in a statement. The finality of the deal comes as site and foundation work has already reached the two-thirds mark for the arena. The city has, to date, spent a reported $25 million to get to this point. The Devils’ letter of credit is secured for the Newark Housing Authority, the designated redevelopment agency for the site.