Q-and-A on Coliseum referendum issue
Supporters, including County Executive Edward Mangano, say the project would create more than 3,000 jobs and provide Nassau with at least $14 million in revenue each year.
Opponents warn of property tax increases and note that the borrowing over its 30-year life would cost some $800 million.
Following are questions and answers about some of the key issues:
What's the issue in the vote?
Residents will decide whether to authorize the county to borrow up to $400 million. Of that, up to $350 million would be used to build a new Nassau Coliseum, to be located at the existing site in Uniondale, and about $25 million would be used for a minor league ballpark in nearby Mitchel Field. The rest could go toward other development, including an indoor track-and-field facility.
Why is Nassau holding a special referendum?
County officials note that the Islanders' lease at the current Coliseum is up in 2015 and a new arena could take 30 months to build, so time is short. Officials also say they want to avoid the political season of the fall and to maximize the number of people who can vote. Opponents of the proposal, however, say that holding the vote on a Monday in August will limit turnout, and that it would have been better to have the vote on either Primary Day in September or Election Day in November.
What happens if the referendum passes?
If it passes, the borrowing then would require the approval of two-thirds of the county legislature. The Nassau Interim Finance Authority, a state monitoring board that controls Nassau's finances, also would have to sign off.
What if the referendum fails?
If a new arena isn't built, project supporters say the Islanders will leave when their current lease expires in 2015. Recently, Mangano has indicated he has a Plan B if the referendum fails -- though he hasn't provided details. Even if the referendum fails, Nassau County still could move ahead with the borrowing, because the county legislature ultimately has the power to make the authorization, county spokesman Brian Nevin said. The borrowing would still need a two-thirds vote of the legislature.
How much does holding the referendum cost?
The Nassau Board of Elections estimates the referendum will cost up to $2.2 million. The lease stipulates the Islanders will pay for the referendum if it passes and if the project receives all required approvals from government agencies.
What will the county get out of the deal?
Nassau officials say the county's total profit from the revenue-sharing deal could amount to $400 million over 30 years. The revenue numbers are based on average per-game attendance of 14,650 and 125 total events per year, including 41 hockey games. Some sports economists warn that the projections may not pan out.
What will the project cost taxpayers?
Nassau County will borrow the funds through a general obligation bond, which means that taxpayers ultimately will be responsible. If the county borrows the entire $400 million, debt service will total more than $800 million over 30 years. The annual debt service for the Coliseum piece of the development will be about $26 million a year.
The proposed lease between Islanders owner Charles Wang and the county includes a revenue-sharing agreement that would give Nassau at least $14 million per year. Team and county officials say the revenue, plus increases in sales taxes a new arena is expected to generate, will offset any tax increase for residents -- and may even permit tax reductions. The nonpartisan Office of Legislative Budget Review says the net cost could be as little as $13.80 for the average homeowner per year. If the revenue does not go to tax reduction, the average homeowner will pay an additional $58 per year, the budget office said. The total debt service will be reflected in a special line on the property tax bill.
Why did the county choose to use a general obligation bond instead of revenue bonds, which would be backed by Coliseum revenue?
The interest Nassau would have to pay on revenue bonds would be far more than on general obligation bonds because investors consider taxpayer-backed debt as more secure. Because of the risk involved in using revenue to back the bond, Nassau would have needed about $65 million in revenue annually to cover $26 million in debt service, said attorney Christopher Melvin, who put the borrowing deal together for Nassau County. "The economics aren't there," Melvin said.
What happens if the cost of the arena is more than $350 million?
The Islanders will cover all costs above that amount. But if the bill exceeds $375 million, the team could pay any cost overruns, pull out of the deal, rebid the project or alter the design to reduce costs.
What would the plan mean for other development in the area?
The lease gives Nassau the right to develop the rest of the 77 acres. But Wang, as the tenant, can object to anything that "materially or adversely" affects the Coliseum or the other property he owns, including the adjacent Long Island Marriott. Any new development would have to replace Coliseum parking it displaced.
Developers say it's possible other construction will occur on the site someday -- but because of the struggling economy, it may be a decade before it could occur. The Mangano administration maintains that the Coliseum as an anchor will encourage other development.
What details in the contract still need to be worked out?
The lease still needs legislative approval and its terms could change after the referendum vote. An agreement between the county and the Long Island Ducks to bring a new team to the minor league ballpark also is not finalized, and no revenue-sharing figures are available.
What happens if the arena isn't built and the Islanders leave?
A report by the county consultants Camoin Associates says the economic impact of the Islanders' departure could amount to $243.3 million per year. Beyond that, more than 2,600 jobs and $100 million in employment earnings could disappear. Nassau also could lose $8 million a year in tax revenue -- a loss that could result in a tax increase of $16 per household on average. However, some fiscal analysts argue that residents could spend their discretionary dollars elsewhere in Nassau, leading to less of an economic loss.
Polls will be open from 6 a.m. until 9 p.m. Monday in Nassau County in the referendum to authorize up to $400 million in borrowing for a new Nassau Coliseum and minor league ballpark. Voters registered in Nassau are eligible to cast ballots.
About 60,000 voters have been mailed postcards directing them to one of 24 new polling sites because theirs are unavailable. The new sites can be found online at www.nassauvotes.com.
Each polling place will have a disabled-accessible voting machine. Voters may call 516-571-2411 to check eligibility and verify their polling place.