Nassau Coliseum groundbreaking awaits a lengthy to-do list
Developer Bruce Ratner wants to break ground in less than four months on a $261 million renovation of Nassau Coliseum and the plaza around it.
But before anyone sees hard hats and shovels at the site, there's a lengthy to-do list that involves everyone from county officials and labor negotiators to minor-league hockey team owners and the issuers of town building permits.
Many of the conditions that must be met before construction can begin -- according to the lease Ratner's subsidiary, Nassau Events Center, signed with Nassau County -- remain unresolved.
Ratner has to attract and sign a lease with an American Hockey League team; establish project labor agreements; finalize financing, including his plans to bring in $90 million in Chinese investment and any Industrial Development Agency aid he is expected to ask for; and receive all town approvals on detailed plans and environmental reviews for the Coliseum and its "plaza," the area surrounding the arena.
So far, none of those things has happened.
Meanwhile, Ratner is facing pushback from the Blumenfeld Development Group, which was brought on to handle the retail portion of the project. Forest City Ratner and the Blumenfeld Development Group have filed dueling lawsuits, each accusing the other of trying to usurp control of the Coliseum project. It is unclear how those lawsuits will affect Ratner's to-do list.
The Islanders were eliminated from playoff contention on Monday, after playing their last game at the Coliseum on Saturday. Their lease expires at the end of July.
Ratner's plan calls for a downsized arena, with 13,000 permanent seats, that would include a new exterior, remodeled concourses and new bathrooms. He also plans to add a movie theater, restaurants and other entertainment options, including indoor basketball, to the plaza surrounding the Coliseum.
Sports economics experts said that fulfilling the lease requirements is more difficult without a major-league anchor tenant for the arena and additional entertainment and restaurant tenants for the plaza.
"I just can't see anyone pouring a bunch of money into this facility until there is a little bit more certainty about what you're going to use that facility for," said Victor Matheson, a sports economist with the College of the Holy Cross in Worcester, Massachusetts.
In addition, those experts said, it's difficult for an arena without a team -- even a minor-league team -- to succeed financially. "A building that's dark doesn't generate revenue," said Scott Rosner, a sports business professor at the University of Pennsylvania's Wharton School of Business, who noted that a minor-league hockey team would keep the lights on for 40 nights each year. "It's not impossible -- but it's hard to conceptualize a 12,000- to 13,000-seat arena would be viable without a primary tenant."
Local business leaders said they expect Ratner to stay on schedule.
"Based on all of my discussions with Bruce and his team, and seeing what he got done in Brooklyn, I am optimistic he will succeed and get the job done here in Nassau," said Long Island Association president Kevin Law.
But National Hockey League Commissioner Gary Bettman expressed doubts Friday, pointing to failed efforts in the past. "Lots of possibilities have been thrown out about an arena for the last decade and none of them have materialized," he said.
Since Oyster Bay billionaire Charles Wang bought the Islanders in 2000, he and others have tried to rebuild or renovate Nassau Coliseum and the surrounding 77 acres. Everything -- from Wang's Lighthouse Project to the county's public referendum on a $400 million bond issue to renovate the arena in 2011 -- failed. In 2013, less than a year after Wang announced plans to move the Islanders to Ratner's Barclays Center in Brooklyn, County Executive Edward Mangano chose Forest City Ratner over Madison Square Garden Co. to redevelop the Coliseum.
Ratner takes over the arena after the Islanders' lease expires on Aug. 1. Ratner's lease requires him to begin construction by October, but he said he hopes to start in mid-August. Now, it's up to him and his team to make the 100 pages of lease promises a reality.
Officials at his company, Forest City Ratner, say they expect to meet all deadlines.
Ratner's landlord -- Nassau County -- is counting on it.
"They've met their obligations to date and Forest City Ratner has been excellent at providing updates on the current design aspects of the project and the associated time frame," said attorney Josh Meyer, of Pannone Lopes Devereaux & West LLC, who represents the county in its Coliseum-related dealings.
Ratner is supposed to bring a minor-league team affiliated with the American Hockey League as the anchor tenant of the renovated Coliseum -- and he is to sign a lease with the team before construction begins. That lease is to run for at least 15 years.
More than a year ago, Ratner made it clear that he expects the team will be the Bridgeport Sound Tigers -- the Islanders' minor-league affiliate, also owned by Charles Wang. But the Sound Tigers have a lease in their Bridgeport, Connecticut, arena that lasts until 2021.
It's possible, experts have said, that another team could move into the Bridgeport arena if the Sound Tigers come to the Coliseum. Yet the choices are few. The New York Rangers' minor-league team, the Hartford (Connecticut) Wolf Pack, has a lease with that city's XL Center that expires next year, but there are extensions to the lease available, according to published reports. Madison Square Garden spokeswoman Kim Kerns declined to comment.
The AHL is in the midst of a reorganization as some teams are moving to the West Coast, leaving fewer available to relocate to Nassau, experts said.
"It's a bit of a game of musical chairs with the minor-league franchises," Rosner said, noting that the minor-league teams can move more often -- but that they often try to stay close to their major-league affiliate.
Asked about the AHL lease earlier this month, Ratner said he expected a deal within 12 months. But Forest City senior vice president Jim Lester said recently that company officials will sign an AHL lease before construction begins.
And Meyer said he expected a deal to get done.
"It can be any AHL team," Meyer said, noting that it doesn't have to be a team affiliated with the Islanders. "There is time. And there are AHL teams available to be moved."
Experts said the anchor tenant is central to the rest of the project falling into place.
"My sense is things aren't going to get really urgent until there's a much stronger line on actually getting a full-time tenant in there," said Matheson. "If there isn't a team moving in, you can let things dangle."
Ratner has promised to use unionized labor for construction -- and the lease outlines the need for labor agreements before ground breaks.
Using unionized labor for the project will require a Project Labor Agreement, known as a PLA, which spells out the terms and conditions of a collective bargaining pact between the developer and the unions, according to Richard O'Kane, the president of the Building and Construction Trades Council of Nassau and Suffolk.
A PLA was established with Forest City Ratner for the construction of the Barclays Center, O'Kane said, and he hopes the new agreement will mirror that one.
The timing is tight -- and O'Kane said earlier this month discussions would have to start "now" to be ready for a groundbreaking by August. O'Kane said Friday that discussions are scheduled to begin Monday.
"If everybody cooperated and did what they were supposed to do, we could get it done in less than a month," O'Kane said.
Lester said Forest City has "templates" of PLAs based on past projects. "It's been in our court to go back to them" for a new agreement, he said. "We can base the current agreement on the previous ones, so they're quicker to hammer out."
John Durso, who heads the Long Island Federation of Labor, said he didn't doubt Ratner's plan to use a PLA. "Bruce is thoroughly committed to using union labor and working with the building trades," Durso said. "That was his statement to us."
Durso said the length of the process depended on whether both sides were "reasonable" in demands and negotiations.
Said Ratner spokeswoman Ashley Cotton: "We're going to get a great deal that's all union."
The lease requires Nassau Events Center to line up financing before construction starts.
Ratner anticipates getting $90 million from Chinese investors through a program that provides visas in exchange for financial investments in job-creating projects.
United States Citizenship and Immigration Services handles the program. This month, the Nassau County Legislature approved an amendment to the Ratner lease to allow for the foreign investment and boost the Coliseum project's value to $261 million.
Lester said Ratner plans to use his own equity to handle the rest of the costs, particularly the arena renovation itself, which will start first.
"There is a possibility that we would look at a second level of financing, but at this point, we're not doing that," Lester said. Lester pointed to a potential mezzanine loan, which is common in development and often uses the company's assets as collateral, rather than the property itself.
Ratner also intends to pursue Industrial Development Agency assistance -- and he needs to finalize that before construction starts. The IDA can provide tax breaks, financing including tax-exempt bonds, and other incentives. The lease indicates that Ratner does not believe he could undertake the project without IDA involvement. As of last week, Ratner hadn't filed an application with the IDA.
County spokesman Brian Nevin said the maximum time the IDA has needed to review an application is 45 days.
Approvals and permits
Nassau Events Center submitted its application for Town of Hempstead approval this month. Hempstead officials emphasized that they can expedite the approval process because Ratner was familiar with the zone that the town approved in the spring of 2011. Ratner's plans are expected to fit within those parameters, created after Hempstead Town deemed the Lighthouse Project too dense. The town zone allows for 5.4 million square feet of construction across the 77 acres surrounding and including the Coliseum, about half of what the Lighthouse Project would have encompassed.
Ratner filed a conceptual master plan and an environmental analysis. For now, he is planning less than 700,000 square feet of development, including the Coliseum itself. The town has to conduct an environmental review and approve the plans -- a process Hempstead Town Supervisor Kate Murray said could take at least a month.
Once that's done, Ratner will have to file for building permits.
"If the town acts in an expedited fashion, they [Nassau Events Center] should be able to get going this summer," Law said.
The town will hold its first hearing on Ratner's application on May 19, but it is uncertain whether the board will vote that day.
While nothing has to be done before construction starts, the lease calls for the Islanders to return to the Coliseum to play four regular-season games, two preseason games, four training camp days and two open team practices each season for the next decade.
In a television interview Friday, Mangano treated the Islanders' planned Coliseum games as a definite -- even saying he hoped to "expand that in the future."
But the deal to play the games is not final and requires approval of the NHL. It is unclear whether the plan also would require individual team approval, including that of the Rangers, who hold territorial agreements with the Islanders.
In addition, the lease says that if the Islanders are unable or unwilling to play the six games at the Coliseum -- barring unforeseen events such as a leaguewide lockout or serious damage to the arena -- Ratner would owe the county an additional $1 million each year in rent. That figure would increase by 10 percent after five years.
A Forest City official who asked not to be identified said company representatives have spoken to the NHL. "It's a process" that will take time, the official said. "But, of course, we expect to have six games there and don't expect opposition."
Islanders senior vice president Michael Picker did not return calls for comment.
On Friday, NHL Commissioner Bettman would not say whether the league would approve a deal to allow the Islanders to play some games at a renovated Coliseum.
"We don't make decisions on speculative things," he said. "If in fact there's going to be a facility -- that's a big if -- and if in fact the Islanders have an interest in that, then that's something we will discuss at that time."
"The only thing we know for sure," Bettman said, "is that there is an arena in Brooklyn where the Islanders are going to."