County Executive Edward Mangano released the details of the lease agreement he negotiated with Islanders owner Charles Wang on June 22, five and a half weeks before residents’ Aug. 1 vote on a $350 million bond referendum to finance the development of a new Coliseum.
The plan, outlined by Mangano and Wang, would finance the construction of the new arena and payment of the debt service — a total of $783 million — by giving the county 11.5 percent of the gross revenue generated by the new complex, with the exception of television contracts. The agreement would begin when the Islanders’ current lease expires, in 2015, and be in effect until 2045. Currently, the only real revenue the county receives from the Coliseum is a $1.50 entertainment tax on each ticket sold.
“This is a giant step forward for Nassau’s economy,” Mangano said. “Instead of historical back steps Nassau County has endured with the loss of businesses and corporations such as Canon USA, Grumman, Avis and OSI Pharmaceuticals and the Nets — and now recently, the Jets’ spring training — this lease agreement … moves us forward. We’re once again becoming job-generating, and maintaining the quality of life we’ve become accustomed to by having a Coliseum here in Nassau County.”
According to Mangano, over the 30 years of the agreement, the new arena would generate $1.2 billion in revenue for the county. The revenue-sharing would pay the estimated $26 million-per-year debt service that would come with voters’ approval of the bond. By the end, Mangano said, the project should generate $403 million in surplus revenue for the county. The numbers come from an independent report compiled by Camoin Associates on behalf of the Nassau County Industrial Development Agency. According to the same report, the arena would be a catalyst for job creation in the county. It estimates that the construction would create 1,515 temporary jobs during the two years of construction, which would in turn create more than $848,000 in tax revenue. When the facility opens, it is expected to create 3,040 jobs — 2,111 direct jobs at the arena and nearby businesses and 929 indirect jobs created through spending by those with new jobs.
The agreement stipulates that the Islanders must pay the county a minimum of $14 million per year if the revenue-sharing should be less than that. The arena is also expected to bring in about $4 million annually in county taxes, meaning the county will receive a minimum of about $18 million a year in revenue. While that is not enough to cover the estimated annual payment of $26 million in debt service, it would dramatically reduce the cost to taxpayers.
If the plan is not approved, Wang is expected to relocate the Islanders in four years, when the team’s lease expires. The Camoin Associates report estimates that if the Islanders were to leave, the Coliseum would have to close for most of the year and draw only 100,500 visitors a year for a dozen or so special events — as opposed to 1.37 million estimated visitors to the new facility.
“Our home is Long Island. We want to be here,” Wang said. “We’re trying to work the best way we can. I know other attempts at doing this have failed. Not just during my tenure, by the way, but through all the years. I think we need to do this.”
The lease agreement would also allow the remaining 77 acres of the site — which is now parking — to be developed. This would make it possible for the Coliseum to be built now and for mixed-use development to come later.
“Originally the Lighthouse plan married the two issues. There is a logic to separation,” said Eric Alexander, executive director of Vision Long Island. “We recognize that you can end with the same result by taking a different path. So we’re very open to that. We’re pleased to see this initiative moving forward.
“We don’t want to see a 77-acre parking lot and the Coliseum solely,” Alexander added. “We want to see mixed-use development on that site, and that’s something that we’ve said. I’ve not met anybody who wants to see the Coliseum as a stand-alone.”
Many of the plan’s supporters see this not only as the last chance for the Islanders to stay on Long Island, but as a harbinger of Nassau County’s future. “This will not solve all the problems that we as Nassau County residents face today,” Wang said. “There are so many other issues. But what we hope is that this becomes a catalyst so we can get started and rebuild. All of the things that we find objectionable — whether it’s too many strip malls, whether it’s the taxes being too high — we have to take a step. We cannot accept the status quo. To do nothing now means we fail.”