Nassau County has issued a notice of default to the operating company of NYCB Live’s Nassau Coliseum that threatens to terminate its arena lease if more than $2 million in unpaid rent and utilities isn’t paid in two weeks.
The notice of default comes three weeks after the Coliseum shut down indefinitely while Russian billionaire Mikhail Prokhorov sought investors to take over the lease and assume the remaining $100 million in debt.
The letter, sent by the county's outside attorney Tuesday, indicates the notice of default is intended as a mechanism to bring Prokhorov’s company, Onexim Sports & Entertainment, to the negotiating table to discuss the future of the county-owned Coliseum.
The letter said, “While we have issued the Notice of Default, we remain willing to hear any plans that ensure sustained Coliseum operations and development of the Hub. We will review any such proposals or plans swiftly and will engage in discussions with respect thereto, all for the ultimate benefit and enjoyment of the public.”
A spokesman for Onexim said, "We are engaged in a productive conversation with all the stakeholders. We have consistently initiated communications with the County and have been responsive to their communications. We are hopeful that we will soon be able to announce a resolution that will satisfy the needs of the community while taking into account the new realities that we are all facing in light of the pandemic."
The website for the Nassau Coliseum, which reopened in 2017 after a $180 million renovation, no longer is operational. If the lease with Onexim is terminated, county officials will need to identify and negotiate with a new entity to operate the 14,500-seat venue.
Nassau Event Operators and NYCB Live on June 19 filed a WARN notice with the state Labor Department signaling plans to lay off 1,419 coliseum employees on June 30. They cited “unforeseeable business circumstances prompted by COVID-19.”
Rosemarie Milano, the former vice president of human resources for the Coliseum operator and the listed contact in the WARN notice, said she could not speak for the company because she was no longer employed there. A person close to the company confirmed the layoff of 1,419 people took place on June 30.
County officials said last month that Onexim requested a rent forbearance. In its letter, the county said it attempted to negotiate terms of an agreement in exchange for "sustained operations." No deal was reached. The letter was addressed to Onexim Sports & Entertainment president Maureen Hanlon and Nick Mastroianni II of Nassau Coliseum Funding 100, LLC.
A Newsday story in 2015 said the company Nassau Coliseum Funding 100 was created to orchestrate a $90 million loan from a Chinese investor through a federal program that provides visas in exchange for the financing of job-creating projects. The story said the loan was secured by a leasehold mortgage on NEC's interest under the lease.
The county’s letter Tuesday said, "We have been, and remain, particularly concerned about the status of NEC’s leasehold mortgage loan."
Mastroianni, of Nassau Coliseum Funding 100, did not return a message seeking comment.
The letter was sent by attorney Josh Meyer of White Plains-based West Group Law PLLC, who has represented the county in Coliseum matters for a decade.
The Islanders were scheduled to play their entire home schedule next season at the Coliseum before their Belmont arena opens in October 2021. Nassau County Executive Laura Curran has said she's trying to make sure that still happens. If the arena isn't open, the Islanders are expected to play at Brooklyn's Barclays Center.
The Coliseum also anchors a new $1.5 billion Nassau Hub development planned for the 72-acre site, located in Uniondale. Onexim partnered with RXR Realty in 2018 to develop the county-owned property around the venue — which as of October 2019 was said to generate 2,600 jobs and generate $2.5 billion in new economic activity.
Plans called for the construction of 500 units of housing, geared primarily toward millennials; 600,000 square feet of office and biotech research space; two hotels, and 200,000 square feet of entertainment options and "experiential retail" stores providing services such as yoga and cooking classes.
“We cannot drag our feet on a strategy for the future of this hallmark Nassau County arena nor risk the unprecedented progress we’ve made to transform the Hub site,” Curran said in a statement late Wednesday. “We did not take today’s action lightly and believe it is the best way to bring all parties to the table. I am committed to swiftly reviewing any proposals to get a plan for the building and the redevelopment back on track for the benefit of all our residents — including our devoted Islanders fans — who were looking forward to a final season at the Barn.”
A spokesman for RXR Realty declined to comment on the impact the termination of the Coliseum lease would have on the Hub development.
With Mark Harrington