Nassau County says it has struck a deal for the Florida developer who helped finance NYCB Live’s Nassau Coliseum renovation to take over immediate control of the shuttered arena’s lease.
The county says the agreement with Jupiter, Fla.-based Nick Mastroianni II allows for Nassau to recoup more than $2 million in unpaid rent by former leaseholder Russian billionaire Mikhail Prokhorov and sets the stage for the arena’s potential reopening.
In a statement, Nassau County Executive Laura Curran said, “This deal follows rigorous negotiations and fulfills my main objectives — forging a path forward for sustained Coliseum operations and keeping us on track to redevelop the Nassau Hub.”
The new Coliseum leaseholder is a company called Nassau Live Center LLC, headed by Mastroianni. In 2015, his company, U.S. Immigration Fund, orchestrated a $100 million loan for the Coliseum’s renovation from 200 Chinese investors through a federal program that provides visas in exchange for financing job-creating projects.
U.S. Immigration Fund is not affiliated with the federal government.
As the Coliseum’s new leaseholder, Mastroianni inherits the contractually obligated partnership rights on the proposed $1.5 billion Nassau Hub development with Scott Rechler’s RXR Realty.
Mastroianni said in a text message Wednesday night, “Our plans are to take control, further the development plans with RXR and work with the county to reactivate the arena.”
The deal for Mastroianni to become the new Coliseum leaseholder does not require the approval of the Nassau County Legislature because the existing Coliseum lease allows for the lender — in this case Mastroianni — to step into the shoes of the leaseholder in the event of a default.
The county was in this predicament because Prokhorov’s Onexim Sports and Entertainment announced in June it was shutting the building indefinitely amid the COVID-19 pandemic and walking away from the $100 million in debt owed to Mastroianni’s investors.
As a result, the county’s options were either to allow for Onexim to enter into bankruptcy, thereby risking years of litigation over the property, or issue a notice of default and cut a deal with Mastroianni to take Onexim’s place as leaseholder.
The county issued the notice of default last month and negotiations with Mastroianni concluded Wednesday.
The county said in a news release that Mastroianni has agreed to honor the contract with the New York Islanders to play their final season at the Coliseum as well as the deal that calls for the Long Island Nets to play their future NBA G-League schedules in Uniondale.
The county, in turn, has agreed to not issue another notice of default for any unpaid rent for 60 days, citing the pandemic’s ongoing economic impact, while Mastroianni prepares "a plan for sustained operations at the Coliseum." The county also is open to renegotiating the financial terms of the lease, originally signed by Brooklyn developer Bruce Ratner in 2013.
The current Coliseum lease calls for at least $4 million in rent to the county. Any such change to the lease would require approval by the Nassau Legislature.
Mastroianni also agreed to retain ASM as the arena operator on a "month-to-month" basis, so that a plan is in place for when the arena will be allowed to be open again. The county expects that the Florida developer will seek a new long-term operator of the arena.
Oak View Group, the arena development company that will co-own and operate the Islanders’ new UBS Arena at Belmont Park, has expressed interest in downsizing the Coliseum into a more intimate musical concert venue and creating synergy with UBS Arena.
Gov. Andrew M. Cuomo lauded the county’s deal with Mastroianni, saying in a statement that the arrangement “makes it increasingly likely the Islanders will be able to play at the Coliseum before the Belmont Arena is complete. This announcement reminds us that the Islanders — and the Barn — are part of Long Island's DNA, and will be for years to come.”
But the county also is entering a long-term arrangement with a developer currently embroiled in lawsuits over the same financing arrangement used to help pay for the Coliseum’s $180 million renovation completed in 2017.
Mastroianni’s company has been accused in lawsuits of failing to pay investors of prior projects funded by the same foreign visa program that paid for the Coliseum’s face-lift and his proposed takeover, court documents show.
In federal lawsuits filed chiefly in Florida, investors have sued Mastroianni, his lawyer and development companies, charging they failed to make promised interest payments to Chinese investors who spent $500,000 on his projects.
None of them are related to the Coliseum’s renovation financing and Mastroianni has denied the claims.
With Mark Harrington