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From the archive: Sorry he bought the team

Islanders owner upset with pace of approval for project to redevelop Coliseum and declares he's out $300M since taking over the franchise

An artist's rendering of a renovated Nassau Coliseum

An artist's rendering of a renovated Nassau Coliseum that would have been part of the Lighthouse Project proposed by Islanders owner Charles Wang and RXR Realty chief Scott Rechler. Photo Credit: New York Islanders

This story originally appeared in Newsday on May 3, 2009.

Frustrated with the pace of his Lighthouse Project and sick of sinking more than $20 million a year to keep the Islanders afloat, Charles Wang has a case of buyer's remorse nine years after purchasing Long Island's hockey team.

"If I had the chance," Wang said, "I wouldn't do it again."

One of Long Island's wealthiest residents, Wang says he has been taking a financial beating ever since he purchased the Islanders along with former Computer Associates executive Sanjay Kumar in June 2000. (Wang bought out Kumar in 2004.)

According to the team's annual audited financial reports that were viewed by a Newsday reporter last month, Wang has spent $208.8 million - an average of $23 million per year - to keep the NHL franchise operating since his purchase. That's after spending $74.2 million to buy the team and assuming $97 million in existing liabilities. 

The reports were audited by the accounting firm of Ernst and Young. It was not possible to have an independent auditor or firm examine the reports to confirm the numbers.

This year alone, Wang has provided $33.5 million in 12 payments, said a document provided by Islanders chief financial officer Art McCarthy. There's still two months left on their July 1 to June 30 calendar, but McCarthy hopes the incoming season ticket deposits for next season are enough to push back Wang's next payment until the fall.

"It's ugly," McCarthy said. "Plain and simple, it's ugly."

Wang: Wanted to save team

Still, Wang says he is proud that he was able to save the Islanders from leaving Long Island nine years ago, and that it was important to him that the Island's only professional sports team got a legitimate shot to succeed. Before Wang's purchase of the team, many area public figures asked him to step in - an action that the financial documents show has cost him close to $300 million.

"I knew going in," Wang said, "that I was going to lose money."

National Hockey League Deputy Commissioner William Daly said the league is aware of Wang's losses on the team. "His numbers are real," Daly said. "Yes, we're aware the Islanders lose money, a significant amount of money. And it goes back to the team's need for a new arena."

After buying the Islanders, Wang said he assumed - wrongly, it turned out - that Nassau Coliseum would either be refurbished or replaced within a few years. He says he wouldn't ever have envisioned entering his second decade as the Islanders owner with home games still taking place at the aging arena on Hempstead Turnpike.

"Never in my life," he said, "would I have anticipated this thing could be dragged out for seven, eight years."

Wang initially thought Nassau County government would subsidize the redeveloped arena. But after County Executive Thomas Suozzi told him that wasn't possible because of the county's financial state, Wang said they came up with the plan to privately develop the 70 acres of land surrounding the arena.

The Lighthouse Project - a $3.7 billion joint venture with RXR Realty chief Scott Rechler - has Suozzi's backing and is currently under review by the Town of Hempstead, where Wang says it is being held up.

Wang chooses his words carefully regarding Town Supervisor Kate Murray, but it's clear he's at his wit's end with what he says is a lengthy period of waiting for feedback so that he can get started. Meanwhile, town officials have said the review process under way is normal, particularly for so large a project.

"The worst thing I really get upset about, I'll tell you, is she's never come to a briefing on the project," Wang said, referring to Murray. "Never."

Town: Project on fast track

Murray said the town has fast-tracked the project. Last week, environmental consultants hired by the town to review the developer's 6,500-page impact statement called for revisions, which they described as routine. The consultants say the developers hadn't adequately addressed some concerns outlined by the town, including garbage, tax revenue, traffic and noise.

"We've moved the state mandated reviews on this project as quickly as the law allows," she said. "If we were to violate the law, the Lighthouse Group would be held up in litigation for years to come."

Beyond its need for subsidies, the Islanders' value also has fallen during Wang's tenure. Forbes magazine recently said the team was worth $154 million; Wang bought it for about $170 million.

"I don't like to lose the money, so therefore that's why I've said, 'This is it. I'm not going to play. Just tell me where I stand by the beginning of the next hockey season,'" Wang said.

If Wang does not have an answer by then, he said, "I'm not saying I'll move. I'm saying I'll explore all my options."

Potential landing spots include Kansas City, where a new arena awaits an anchor tenant, and Willets Point, Queens, where officials have expressed interest in having the Islanders.

The reason the Islanders currently lose so much money - they're $95.2 million in the red the past three years, McCarthy said - is because their lease with SMG, which manages the arena, does not entitle them to revenue from concessions and parking and the Coliseum has limited suite possibilities. Their lease expires in 2015.

If Wang were to up and leave, he would be breaking that lease.

Officials with SMG did not return a call asking for comment.

Staff writers Eden Laikin and Bill Murphy contributed to this story.

WANG'S OPTIONS

SELL THE TEAM Wang said in February that without the Lighthouse project, he'd be forced to consider selling the Islanders hockey team.

BREAK THE CURRENT LEASE According to the lease, the Islanders can't play any home game during the regular season anywhere but the Nassau Coliseum, which is owned by the county, until 2015. If the owner attempted to move the team, Nassau County Attorney Lorna Goodman said earlier this year, Wang could be held in contempt and face the possibility of jail time, high fines and the payment of any damages incurred by the county.

GET COUNTY TO END LEASE Nassau officials have said they won't allow Wang out of the agreement.

THE NEXT STEPS

1 Developers must address Hempstead Town engineers' concerns.

2 Once a final environmental report is submitted, other agencies, including the state departments of Transportation and Environmental Conservation and LIPA, have 30 days to comment. The developers must then respond to all of their concerns.

3 The town board will hold hearings to create new zoning for the project. This is when the town will say what can and can't be built on the site.

4 Nassau County must approve a subdivision plan.

5 Town and county must approve site plan, which includes roadway, water and sewer infrastructure.

6 A lease agreement between developers and county legislature must be executed.

THE ISLANDERS' OUT CLAUSE

The contract that binds the New York Islanders hockey franchise to the Nassau Veterans Memorial Coliseum is in effect until 2015. However, the 2007 agreement between Wang and the county to renovate the Coliseum and develop the area around it includes language that gives the team an out. Once the county executive submits a lease for the 150 acres of county-owned property, the county legislature has 120 days to approve it. If it doesn't, the team can leave.

Compiled by Eden Laikin

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