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Nassau Coliseum operator owes county about $6M, audit shows

An aerial view taken April 18, 2015 shows

An aerial view taken April 18, 2015 shows Nassau Veterans Memorial Coliseum in Uniondale. Credit: Kevin P. Coughlin

The operator of the Nassau Coliseum, which is set to close for repairs in August, owes the county nearly $6 million in unpaid rent, utilities, parking and concessions, and an additional $176,000 in back ticket taxes, according to an audit by Nassau Comptroller George Maragos.

The review found SMG, a Pennsylvania-based venue management company whose lease to run the 43-year-old Coliseum expires July 31, owes the county money dating back to 2011.

Maragos is urging Nassau to file a lawsuit against SMG to collect the money that is owed, plus any penalties and interest. "SMG owes the county an awful lot of money and has been rather tardy in making payments," Maragos said. "The county really needs to follow-up on behalf of the taxpayers."

County Attorney Carnell Foskey declined to comment on the prospect of a lawsuit, but said Nassau is working with SMG to settle the bill.

"With a major renovation approaching and the decades-old Coliseum lease coming to an end, the county is managing a delicate situation to minimize taxpayer expenses while providing a safe facility for family entertainment," Foskey said. "The county has every intention to collect the dollars owed and has been actively pursuing a resolution to make the county whole."

In a statement, an SMG spokesman said the company is "working through the process" with the county and the New York Islanders -- who hold a sublease with SMG -- to settle the unpaid bills.

But SMG said it does not owe additional ticket tax revenue because the audit uses requirements that are "not consistent with past practices."

The county imposes an entertainment surcharge tax of $1.50 per ticket for events at venues with capacity of at least 2,500 seats. Tickets issued to groups operating for religious, charitable or education purposes are exempt from the surcharge tax.

The audit said SMG owes the county $176,523, including penalties and interest, for unpaid entertainment taxes on 66,704 tickets sold from Jan. 1, 2012, to March 31, 2014. The cost largely comes from SMG failing to verify the tax-exempt status, or maintain tax-exempt certificates, of organizations claiming tax exemptions, the audit said.

Dawn Culhane, the arena's director of finance, in a written statement said Maragos had created an "impracticable" process for determining an organization's tax-exempt status. Culhane said the comptroller's approach would "severely undermine the philanthropic purpose of the exemption."

A follow-up audit, Maragos said, would determine how much in ticket taxes is owed by SMG from April 1, 2014, through the end of the lease.

Brooklyn developer Bruce Ratner will spend $261 million to renovate and downsize the Coliseum and build an adjacent entertainment and recreation complex with restaurants and retail. Construction is to begin in August and be complete by December 2016.The Islanders will move to the Barclays Center in Brooklyn starting in the 2015-2016 season.

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