Loss of NYCB Live's Nassau Coliseum revenue adds further strain on county finances
Millions of dollars in lost revenues from concessions, utility payments and sales taxes due to closure of NYCB Live's Nassau Coliseum will boost pressure on Nassau County's budget, which already is expected to suffer a $384 million deficit this year because of the coronavirus pandemic, county officials said.
The administration of Nassau County Executive Laura Curran already is weighing the arena operator's request for deferral of $4.4 million in annual rent payments. Onexim hasn't made a rent payment since January, county officials said.
The company also makes utility payments, which last year exceeded $1.8 million, according to the county comptroller's office.
In 2019, the Coliseum made a total of $6.32 million in payments for rent, utilities, entertainment taxes and other expenses, according to comptroller records.
Records for sales tax revenues were not available from Onexim or the county on Thursday.
In 2013, when the Coliseum lease began, the arena was expected to generate a minimum of $2 million to $3 million in annual sales tax revenue for the county, according to a memo from the Nassau Office of Legislative Budget Review.
“There’s a minimum amount of rent that the county expects, and beyond that, the county’s revenue … is tied to the amount of activities," at the arena, said Comptroller Jack Schnirman.
"The county gets additional potential revenue from things like parking and event related costs,” Schnirman said. “The simple way to put it is the county has skin in the game of the success of the Coliseum.”
County Legis. Richard Nicolello (R-New Hyde Park), the presiding officer, said the annual rent payment, “doesn’t include the ripple effect of the events and people spending money there."
The fallout from the arena closure represents "a large scale problem — a more immediate problem in the midst of the pandemic, and loss of sales tax," Nicolello said. "The last thing we can afford is another hole in our budget."
Onexim, owned by billionaire Mikhail Prokhorov, announced Tuesday it was closing the 13,000-seat arena temporarily as it seeks investors to take over the Coliseum lease and assume the remaining $100 million in debt.
The move is expected to send the Islanders back to Brooklyn's Barclays Center instead of playing their final season at the Coliseum, before their expected move to a new $1.3 billion arena at Belmont Park.
Onexim's announcement also raised questions about the future of the $1.5 billion Nassau Hub redevelopment on the 77-acre property that surrounds the Coliseum.
Evlyn Tsimis, Deputy County Executive for Economic Development minimized the immediate impact of the delayed rent payments, in comparison with the overall revenue losses from the economic shutdown.
“The administration is obviously facing a significant budget impact that’s more than the current rent obligation tied to the Coliseum … ," said Tsimis, who described the rent issue as "fairly negligible.”
Tsimis said Onexim is trying to work out a rent payment plan. She described the company as a, “long term tenant who pays their bills and this is a highly unusual circumstance.”
But several officials expressed concern about the ripple effect of the Coliseum closure — particularly from the loss of future sales tax revenues from purchases made by fans at the Coliseum and in surrounding communities before and after events.
"More importantly, you’re talking about the sales tax impact — that’s the bigger impact,” said Minority Leader Kevan Abrahams (D-Freeport).
Abrahams also said he and others in the minority caucus believe Onexim doesn't, “have the right to just start withholding payments because of the economic damage from the pandemic.
Nicolello said he and other county legislators hope Curran administration officials can find another operator for the Coliseum.
However, Nicolello questioned whether that will be possible given the new arena for the Islanders and an adjacent entertainment complex under construction on state land at Belmont Park.
"You’re going to have a competing arena 15 miles away … ," Nicolello said. "Hopefully, they’ll find somebody to run it, but it’s kind of questionable at this point."
But Tsimis said: “We’re very optimistic that there will be investment … There’ll be another chapter here."
Correction: An earlier version of this story misidentified the Nassau County legislator who represents the district where NYCB Live's Nassau Coliseum is located. Legis. Siela Bynoe (D-Westbury) represents the district.
In 2019, the Nassau Coliseum generated $6.32 million in revenue for Nassau County, according to records from the county comptroller‘s office
*Coliseum utility bill, $1.8 million
*Coliseum rental fees, $3.49 million
*Coliseum entertainment tax, $705,502.50
*NY Islanders entertainment tax, $246,642
*Nassau Events Center, $68,881.50