The decision by Onexim Sports and Entertainment to close the Coliseum indefinitely might have been a shocker, but sources tell The Point it's not expected to derail the development there that is critical to Nassau County's future.
Those sources say they expect efforts to develop the land known as the Nassau Hub will move forward, with RXR Realty continuing to take the lead.
What’s more, while the Coliseum’s short-term future remains uncertain, in part because of the pandemic, Nassau officials expect the county’s financial arrangements and the terms of its lease with Onexim, a company owned by Russian billionaire Mikhail Prokhorov, to be upheld, by Onexim’s lenders if not by the company itself. The lease includes a minimum annual rent payment to the county of $4 million. Ultimately, Onexim hopes to find investors who will take on the lease.
Ever since billionaire Joseph Tsai bought the Brooklyn Nets and Barclays Center last year but left the Coliseum behind, Onexim’s future seemed uncertain, sources said, because there was little value in the Coliseum on its own. The money-maker, sources said, was always in the land, and before the coronavirus pandemic, Onexim was willing to wait to get that value.
But Onexim said the pandemic “has had a devastating effect on the operations of the Coliseum and its finances, and delayed the planned development.” No incoming revenue, combined with Coliseum’s $100 million in debt, meant that Onexim didn’t see a way forward financially. So, now the company hopes to find investors to take on the debt.
Sources note that Onexim hasn’t paid rent since February, and that the county has worked on a rent forbearance program with Onexim, as it has with other vendors.
Playing a key role in that process: RXR, led by developer Scott Rechler. So far, Onexim has included and is expected to continue to include RXR as any deal moves forward, according to sources. Onexim, sources told The Point, could find a deal and come to a resolution “quickly” – possibly in months.
“It may be to the county and Scott’s advantage to have a new operator of their own choosing as opposed to the shotgun marriage that they had,” said Long Island Association chief executive Kevin Law. “If they find a new operator … I don’t think it’s something that can’t be overcome. There’s an opportunity now for the county and Scott to rethink their plans.”
No matter what that deal looks like, the value to whoever takes on the Coliseum lease is in the surrounding development. It’s likely, sources said, that future investors would take a similar role to Onexim, and allow RXR to take the lead on development planning.
“RXR remains committed to the project and has been spending a significant amount of time reimagining what the site will look like in this post-pandemic world to help Long Island reignite its economy,” Rechler told The Point.
Hempstead Town Supervisor Don Clavin told The Point Tuesday he had already spoken with County Executive Laura Curran and Rechler, and had “no concerns whatsoever.”
But plenty of questions remain. Even if investors come on in the coming months, it’s unclear when the arena would reopen, or whether large-scale events will be held – much of which depends on the progress of reopening in the wake of the pandemic. At this point, anything’s possible, including the notion that the Coliseum could be used for very different purposes going forward.
And it’s unclear what all of this means for the New York Islanders, which are supposed to play the 2020-2021 season at the Coliseum.
Meanwhile, the construction of a new Islanders’ arena at Belmont Park continues.