Charles Wang says new Nassau Coliseum key to LI growth
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Islanders owner Charles Wang, making his case for voters to approve a $400-million bond issue to pay for a new Nassau Coliseum and ballpark, said the project would be a needed economic catalyst for Long Island that would generate jobs and tax revenue.
During an interview with Newsday reporters and editors, Wang maintained that, as a Long Islander who lives in Oyster Bay, he wants to keep the franchise in Nassau. But without a new arena to replace the facility, he said, the team "certainly cannot stay" after its lease with the county expires in 2015.
Wang outlined his vision for a project that has drawn criticism for being too risky in a period of economic uncertainty; it has garnered the support of county officials and labor unions that say it will generate revenue, increase employment and provide a core development on Nassau's most valuable property.
"It's so important to do this for Long Island," Wang said. "It won't solve all our problems, but without it the future is bleak . . . We believe that we're a catalyst. If we can be that catalyst to start the rebuilding of Long Island, that's what we're trying to do . . .
"How much time do we have with what's wrong with Long Island?" he asked. "There's a lot of things we can hope to change, but if we don't start somewhere, we'll never change it."
Wang elaborated on what he sees as the importance of a "yes" vote on Aug. 1, when Nassau residents consider a $400 million bond issue to finance a new Coliseum and ballpark to be repaid over 30 years with interest.
Wang said the coliseum project is essential to strengthening the county's tax base -- ensuring that entertainment dollars stay in Nassau -- and generating jobs and a range of economic activity from restaurants and businesses.
"I grew up here," he said. "I want to stay here. Let's build this thing."
While county taxpayers would be borrowing the money to build, Wang said, "I am paying for the arena." That statement refers to the fact that the team would make rental payments negotiated between the county and Wang. During the 30-month construction phase, the county would not receive rent but would see some benefit from the project from sales taxes while paying the $26 million a year in debt service.
Once the new Coliseum is completed, the lease calls for the Islanders to stay for 30 years, under the terms of a non-relocation agreement that won't be until after the referendum. Islanders senior vice president Michael Picker said it didn't need to be completed yet because the deal can't move forward until the contingencies, including the 30-year commitment, are finalized.
"To spend time and more money and legal costs and everything else to draft all that stuff, doesn't make any sense because we're required to do that per the agreement already online," Picker said.
Need for new arena
Opened in 1972, the Coliseum's leaking roof has required repeated repairs and Wang said its ice is ranked at the bottom of the NHL because of an outdated refrigeration system. He said he has spent millions trying to upgrade it. Wang described the existing arena as so run down that top players have rejected offers from the team because of it. Ryan Smyth, for example, turned down the Islanders and went to the Colorado Avalanche.
Although singer Rihanna played the Coliseum last week, Wang said some top musical talent, which he didn't identify, has refused to appear in the arena because of its condition. The new arena would have at least 17,000 seats and 50 luxury suites, compared to the Coliseum's 16,600 and 31 suites.
"What acts look at is the size of your building. So if you could go to Brooklyn and it's got a thousand more seats or 1,500 more seats than the current Coliseum, where is that act going? They're going to get the same people. People from Long Island . . .," said Picker.
Wang and Islanders executives contend the arena's poor conditions depress attendance and that a new facility -- as well as expectations that the team will improve -- would fill more seats.
"If we give people on Long Island a destination . . . a cool place to be, and it's nice, they're going to go," Wang said.
With the fortunes of the Islanders improving in the second half of the hockey season, team officials said they sold an additional 1,000 season tickets. A recent scrimmage there attracted about 5,000 fans.
County Executive Edward Mangano has promoted the Coliseum as a jobs generator, citing projections by the county's consultant, Camoin Associates, that the arena would create 3,040 direct and indirect jobs in the first year of operation, though it's unclear how many of them could also be characterized as having been preserved from the current facility.
"It's such an important part of the community," Wang said, referring to the team he purchased in 2000. "I made the commitment and it wasn't about development."
The Coliseum had 116 events last year, not counting those at the exhibition hall, compared with about 200 at the Prudential Center in Newark, which currently hosts two pro teams. A new Coliseum would face competition from the Barclays Center, under construction in Brooklyn, and from Madison Square Garden, which is being renovated.
The latest Coliseum plan was born from the ashes of Wang's $3.8 billion, privately financed Lighthouse Project, a reimagining of the county's 77-acre hub area that failed to get approvals from the Town of Hempstead. The project would have included housing and commercial buildings, a renovated arena, and the tallest structure on Long Island.
Breaking down costs
Building a new Coliseum would cost the county an estimated $26 million in principal and interest annually. Supporters argue that the county's expense would be more than offset under a revenue-sharing agreement with the Islanders and from sales and hotel taxes. A study by Camoin Associates, paid for by Nassau County, projected $7.1 million in sales taxes during the first year. That figure includes off-site spending that the county's Office of Legislative Budget Review wouldn't calculate for long-term revenue projections because of its uncertainty. Critics contend these projections are too optimistic and that Nassau taxpayers will end up paying for a large part of the yearly costs.
Under the terms of a rental agreement negotiated with Mangano, a company created by Wang called Arenaco would lease the Coliseum for a minimum of $14 million a year. The county would get more under a revenue-sharing agreement if 11.5 percent of certain arena revenues exceeded that minimum.
County officials have said the arena would cost the average household up to $58 a year but said that arena revenues could offset that enough to make the increase $13.80. That assumes future legislators opt to cut property taxes by that amount. What's more, if the revenue-sharing projections pan out, taxpayers would actually see an annual tax savings of $26.81, the report said.
On the other hand, the consultants said homeowners could see their taxes rise $16 per year if the Islanders leave and the current Coliseum closes. And it predicted the county's economy could lose $243.4 million annually if the Islanders leave. If the Coliseum closed, it would take with it 2,660 jobs and nearly $104 million in annual earnings, the report said.
The Nassau Interim Finance Authority, a state agency that oversees the county's expenses, has raised questions about the revenue projections, estimating that the cost to the county over 30 years would be more than $800 million. NIFA has not taken a position on the referendum, but has said the deal would raise homeowners' taxes 3.5 percent to 4 percent.
Wang said he needs to start construction by next June to complete the facility by 2015. If he can't get approvals in place by that date, Wang said he will have reached "the end of the road" in his effort to redevelop the hub site.
A "yes" vote on Aug. 1 would take the process to the next stages: a review of a final lease by the county legislature, which can recommend changes, as well as by NIFA. Nassau Comptroller George Maragos last week said the proposal "would be a good deal" if it guarantees that Wang will make the promised payments and is responsible for construction cost overruns and posts a performance bond.
No plan B
Wang said the lease he negotiated with Mangano is "plan A" and there is no plan B.
"We're asking people to approve the deal we have," he said. "You can always tweak this, do this, so forth . . . It's like anything else. You have a whole mix of things where you negotiate a business deal. Some of which you may love and some of which you may not like as much, but you come up and you do the deal then."
Wang sees himself as better positioned because the clock is ticking on the current lease.
"The biggest asset a team has . . . is an expiring lease," he said.
Wang wouldn't say whether he was in talks about relocating if the referendum fails.
The Camoin study said revenue from the Coliseum, along with taxes and economic activity in the area -- including taxes from hotels, sales taxes and jobs -- would offset the cost of debt service in the first year of operation. That conclusion relied on projected increases in attendance that the Office of Legislative Budget Review said were higher than historical increases at other new facilities.
The Camoin study projects attendance would be constant at 1.3 million every year for 30 years, with roughly half the people going to see hockey and the rest attending concerts, family shows and other events. On a per-game basis, that's 14,650 people attending Islanders' games compared with 11,059 last year.
A report by Maragos said total attendance at the Coliseum last year was 856,349. In the past eight years, attendance has ranged from a high of 1,284,622 to a low of 701,744 in a year that included the NHL lockout. Wang said he spent millions of dollars to get approvals for the Lighthouse Project.
"I really don't dwell on it; I am where I am now," he said. "Water over the dam, train left the station, plane's taken off."
Wang blamed some of his problems on politics. His right to develop the property was negotiated by then Nassau County Executive Thomas Suozzi, a Democrat. So, Wang said, opposition came from Republicans in Hempstead.
"If the Democrats like it, then the Republicans have to not like it; if the Republicans like it, the Democrats can't like it," he said. And in the process, he said, nothing got done.
If the referendum fails, or if it passes and the county legislature or NIFA asks for changes, Wang said he would reconsider his options.
"Like any other business thing, you look at what it is and you decide then," he said. "I'm not about to start over and negotiate because we'll run out of time . . . So if we run out of time, we're not going to do it, that's all."