Nassau County is too populous, too prosperous and too proud to become a place with no significant entertainment venue and no big-time sports team. And it's too tentatively perched between paths of progress and decline to let a crumbling Coliseum and the flight of the New York Islanders pull it into the pit.
But the county and its taxpayers can't be the victims of a contract that leaves them with too much liability.
Monday's referendum on whether the county should borrow $400 million to build a new arena, an indoor track facility and potentially a minor-league baseball park, on the land where the 39-year-old Nassau Coliseum sits, should be approved by voters. Following that, the agreements between the county and Islanders owner Charles Wang must be tightened to bind the man and the team to the deal and tightly cap the county's contribution. The taxpayers can and should be decisively shielded from a disastrous downside by the county legislature. If this cannot be done, the Nassau Interim Finance Authority, the fiscal monitor of the county, should scuttle the deal. But right now the process should continue to play out.
The most sensible way to evaluate the proposal by County Executive Edward Mangano is to accept that it's going to be paid for by a dedicated property tax increase that will cost the average household $58 a year for 30 years. The deal will garner cash for the county, but how much?
Wang and the team have committed to giving the county 11.5 cents of every dollar generated at the arena, but set an absolute minimum payment of $14 million per year, a little more than half of the annual debt service of $25.6 million. So if the Islanders do well, and the new facility succeeds in booking concerts and events, the take for the county could be quite a bit higher than that $14 million minimum.
Market studies and projections aside, it's impossible to say how good the Islanders will be and how many fans will attend games.
But taxpayers, even if the arena does well, will continue to see the $58 on their bill. And because the county projects budget deficits in the future, any money generated by the arena will most likely go to pay for those obligations. At best, those profits, and increased sales tax revenue from additional development at the Hub, will mitigate future property tax increases.
So, $58 per year. That's less than it would cost a family of four to travel to New York City to see an ice show, a boat show or a circus that they won't see near home if the deal fails.
There are concrete costs to letting this deal die. We know the current Coliseum is crumbling and decrepit. Top acts like Paul McCartney and Elton John have avoided it for years, and if the Islanders leave when their lease expires in 2015, as they have promised they will, it will become a money pit.
If the Coliseum must be demolished, that costs money. If the county no longer generates sales tax from the arena, that costs money. And if the jobs and hotel visits and restaurant tabs at and near the Coliseum disappear, that costs money. The Coliseum directly generated paychecks large and small for more than 2,000 people last year. It's estimated that once built, the newer and more active arena will directly generate paychecks for 3,000 people annually. Does anybody really believe Nassau can afford to lose these jobs?
Just as important is the cost of lost opportunity at this specific tract at the heart of Nassau and for the region. Momentum forward has to be generated. It would be wonderful if the catalyst were private investment at the Hub, but that isn't happening in the current economy, and such proposals for the land have never gotten off the ground. We have been talking about a new Coliseum for more than a decade.
Building the arena gets something started, creates hundreds of construction jobs and gives the Hub a vibrant new anchor. Doing more there will take a better economy and a partnership with the Town of Hempstead, which controls the zoning for it. The lack of those things is what killed Wang's privately financed Lighthouse Project, which this editorial page enthusiastically supported. The economy will improve and the arena must be in place to capture that upside.
The loudest arguments against the deal contradict each other. Opponents portray this as both a boondoggle that will cost the county its shirt and a windfall that will make Wang a fortune. It can't be both, and it isn't either. The Islanders' fortunes are tied to the arena in this deal: They will suffer or prosper together.
And Wang is not cornering development rights to the whole 77-acre tract; those rights are expressly reserved to the county. The sticking points to future development, getting a project zoned and providing parking to replace the spots built upon, apply to Wang as well as others.
The contract appears to put all cost overruns and maintenance on Wang and the Islanders, via a pass-through company called Arenaco. This needs to be certain, and the connection between the team and Arenaco needs to be nailed down strongly enough that the taxpayer exposure is absolutely capped in case costs run over or the team fails.
The legislature and the county comptroller must guarantee these safeguards are in place before giving final approval. If they aren't, then you can be sure that NIFA will be very disapproving.
So there are still steps to go. But voters ought to get the process started by saying YES on Monday to sow the seeds for a vibrant and growing Nassau County.