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Nassau County takes in $3.2 million from renovated Coliseum

NYCB Live's Nassau Veterans Memorial Coliseum, seen on

NYCB Live's Nassau Veterans Memorial Coliseum, seen on April 5, 2017. Photo Credit: ALL Island Aerial / Kevin P. Coughlin

The operator of the renovated Nassau Coliseum has paid the county more than $3.2 million in rent and other fees since taking control of the site in August 2015, according to data from the Nassau County attorney’s office.

Documents obtained through the Freedom of Information Law show Nassau Events Center paid nearly a total of $1.6 million in monthly rent during the 20 months when the arena was being prepared for renovation and later when it was under construction.

NEC, which is based in Brooklyn, has paid a total of $1.43 million in monthly rent to the county since April, when the building reopened, according to canceled checks and county invoices.

The payments included penalties due to the county after the New York Islanders declined to play a series of regular and preseason games at the Coliseum. The games were a central part of County Executive Edward Mangano’s 2013 lease with developer Bruce Ratner.

“The new lease generates a minimum of $4 million, inclusive of the entertainment tax, to the Nassau taxpayers; eliminates all expenses and presently includes up to an additional million dollars a year until the Islanders return to the Coliseum,” Mangano, a Republican, said in a statement.

Records show Nassau has received a steady stream of revenue since the lease began.

The revenue stream began during pre-construction, from August 2015 to November 2015, when NEC made four payments to Nassau of $50,000 each, documents show. The payments went to $90,000 per month during the arena’s 18-month, $165-million renovation.

The lease guarantees Nassau a minimum of $4 million in annual rent during NYCB Live’s Nassau Veterans Memorial Coliseum’s first year of operation or 8 percent of all annual revenue, including tickets and concessions, and 12.75 percent of parking — whichever is higher.

However, NEC, a subsidiary of Brooklyn Sports & Entertainment, which operates the Barclays Center in Brooklyn, has been able to cut its rent payments by deducting the $1.50-per-ticket “entertainment tax” paid by patrons on every ticket at the arena. The county, by law, keeps the tax revenue.

For instance, singer Billy Joel, who opened the renovated Coliseum April 5, sold 14,869 tickets, generating $22,002 in entertainment tax revenue for the county.

Nassau bills Nassau Events Center monthly rent payments of $333,333 but in April , when artists such as Marc Anthony also appeared, NEC deducted $124,890 in entertainment taxes, reducing its monthly rent payment to $152,887. In May, NEC deducted $225,642, bringing its rent payment down to $107,691.

Josh Meyer, a partner in the White Plains law firm of Pannone Lopes, who worked on the Coliseum lease on Nassau’s behalf, said, “the more tickets that are sold, the better the chance the county has in exceeding the $4 million in base annual rent.”

Joel Maxcy, vice president of the International Association of Sports Economists of Limoges, France, who analyzes sports financing deals nationwide, said the entertainment tax acts as an incentive for NEC to host more events, creating more economic activity for the county.

“So an incentive that encourages more events is good for both sides,” Maxcy said.

Nassau also billed NEC $81,000 when the arena reopened later than expected because of a dispute over the use of union labor to build the interior of a planned 188,000-square-foot retail and entertainment complex, documents show.

NEC Plaza, the lease holder for the plaza, has yet to break ground on the retail development, but has made monthly lease payments of $5,000 on the property, totaling $105,000, since May 2016.

The documents also show NEC has paid $400,000 of a $1 million penalty due to the fact that the NHL Islanders will not play four regular-season and two preseason games at the Coliseum in the 2017-18 season.

The lease stipulates that if the Islanders “are unable or unwilling” to play the games at the arena each year, Ratner must pay Nassau $1 million annually in each of the next five years. The penalty will be $1.1 million in years six through 10.

In a statement, NEC it was “committed to fulfilling our lease obligations, and remain hopeful that the Islanders current ownership will deliver on [former Islanders owner] Charles Wang’s commitment to bring games back to the Coliseum.”

In a June 2013 letter to Brooklyn Sports Chief Executive Brett Yormark, Wang said he was “committed” to playing the six games at the Coliseum.

But the next year Wang sold his majority stake in the team to Jonathan Ledecky and Scott Malkin. The new owners have made no requests with the NHL for permission to play regular season games at the Coliseum this season. The team will play a preseason game at the Uniondale arena Sept. 17.

The Islanders are considering whether to opt out of a 25-year license agreement to play in Brooklyn after only two seasons and plan to bid on a new arena at state-run Belmont Park in Elmont.

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