Nassau County would receive 11.5 percent of all revenue from a new Nassau Coliseum -- or a minimum of $14 million a year -- under the agreement between County Executive Edward Mangano and the Islanders to be announced Wednesday.
The deal would give team owner Charles Wang a 30-year lease beginning in 2015 over the entire 77 acres surrounding the Coliseum, but would not grant him development rights. Wang would have to pay Nassau at least $14 million annually, regardless of how much the team takes in. But Mangano cites revenue-sharing projections of more than $18 million in the first year.
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Officials expect to get added sales, entertainment and hotel tax dollars because of spending that a new arena would generate. The Coliseum's first year would bring the county more than $28 million in total, they said.
Mangano argued the agreement should be looked at in the context of a single alternative: an empty Coliseum that would generate no revenue. Wang has threatened to move the team if a new Coliseum is not built.
"It's move ahead or fall behind. It's not stay the same," Mangano said Tuesday. "You have to act today. Your choice is not the status quo."
The deal comes six weeks before the planned Aug. 1 referendum on whether the county should borrow up to $400 million to finance the construction of a new hockey arena and a minor league ballpark. The county legislature and the Nassau Interim Finance Authority, a state monitoring board that is overseeing the county's finances, would have to approve the borrowing.
Homeowners would pay more than $50 more per year to cover the $26 million in annual debt service in the two years before the Coliseum is completed. But county officials predict that the revenues would offset tax increases in future years.
The county estimates that in the new Coliseum's first year of operation, it would receive $18.9 million in revenue sharing. By comparison, 11.5 percent of the Coliseum revenue for the 2011-2012 hockey season will amount to about $12 million, according to Islanders senior vice president Michael Picker.
But Legis. Kevan Abrahams (D-Hempstead) said the county is projecting "lofty" revenue figures that may never materialize. "We are against taxpayers paying for any of it . . . " he said.
Picker noted that the county would receive its share of money from all Coliseum activities and revenue streams, even though Wang himself does not profit from concert ticket revenue. That means Wang would have to pay the county's portion, even when he doesn't directly benefit."He is paying for this arena," Picker said. "It's unprecedented."
Mangano said the deal would create 1,500 construction jobs and 3,000 permanent jobs.
The agreement, which would have to be approved by the legislature, focuses solely on the new arena and a surface lot that would provide 6,500 parking spaces. But the county could issue a request for proposals for other development.
Wang, as the leaseholder, would "work together" with the county on any potential development plans, Mangano said. Any plan would have to replace the parking, likely with a garage.
"We'd also be concerned about what will be developed there . . .," Picker said. "Collectively, we would be working with the county to come up with an appropriate solution for additional development in the area."
Mangano noted that ultimately, the county would have the final say over development.