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Islanders sue SMG over Coliseum sublease

A general view of Nassau Coliseum before a

A general view of Nassau Coliseum before a game between the New York Islanders and the Toronto Maple Leafs on Tuesday, Oct. 21, 2014, in Uniondale. Photo Credit: Jim McIsaac

The New York Islanders have filed suit against Service Management Group Inc., the hockey team's former lease partner at Nassau Coliseum, arguing that the Pennsylvania-based company failed to fulfill the terms of an arena sublease and owes the club at least $1 million, court records show.

SMG responded to the suit Thursday, arguing in federal court filings that the Islanders defaulted on more than $10 million in payments that were due by July 31 -- the expiration of their lease with Nassau County to manage the Coliseum in Uniondale. The Islanders filed a request for declaratory judgment in state Supreme Court in Mineola on Aug. 10. The team contended that SMG breached its contractual obligations under a sublease agreement signed in January 2010 and owes the team a minimum of $1 million.

The filing, which asks the court to declare that the Islanders have not defaulted under the sublease, does not specify what actions SMG took to allegedly breach the contract.

Islanders attorney John McEntee declined to comment. Islanders senior vice president Michael Picker did not respond to a request for comment.

Attorneys for SMG Thursday asked for the case to be moved to U.S. District Court for the Eastern District.

The federal court filing said the Islanders failed to pay SMG $10.375 million that had been due before the July 31 contract expiration.

"To date the plaintiff has not made that payment in default under the sublease," SMG states in the filing.

The filings do not explain how SMG calculated the amount it claims it is owed.

But the Islanders' sublease with SMG, agreed upon during the final days of Democrat Thomas Suozzi's tenure as Nassau County executive, stipulates that the hockey team owes SMG a $7 million lump sum at the end of the lease as part of a deferred rent-payment plan.

SMG officials and Noah Weissman, the firm's Manhattan-based attorney, did not respond to requests for comment.

Last month, the Islanders and SMG reached a separate agreement to pay the county $3.55 million in unpaid rent, utilities, parking, concessions and revenue payments.

County spokesman Brian Nevin declined to comment on the Islanders-SMG dispute. Brooklyn developer Bruce Ratner took over management of the Coliseum on Aug. 1. He plans to spend $261 million to renovate the arena and build an adjacent retail and entertainment complex.

A Ratner spokeswoman said environmental tests on the arena are continuing. With Mark Harrington

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