Wednesday morning, New York Islanders Owner Charles Wang and Nassau County Executive Edward P. Mangano announced the details of a lease agreement on the existing 77-acres at Nassau Coliseum, should the public referendum for a new state-of-the-art sports entertainment venue pass on Aug. 1.
“Today we take an important step forward in creating a state-of-the-art sports entertainment venue,” Mangano said. “I am proud to announce that the county has reached a lease and operating agreement that will retain Long Island’s only professional sports team here in Nassau County.”
Mangano continued, “This historic agreement requires the Islanders to share revenue from all events, not just Islanders games, with the tax payers of Nassau County. This public-private partnership, where the revenue generated by the Islanders arena will pay for construction costs, bonding and will provide over $400 million in profits to Nassau County tax payers.”
An independent economic impact analysis has been conducted by Camoin Associates, a private local economic development company. Their findings show the new venue is projected to generate $1.2 billion in gross revenue over the 30-year lease. With $350 million of that sum used to pay off the construction costs, $433 million will fund debt service payments, leaving $403 million of excess revenue generated, which will be used by the County to hold the line on property taxes.
Wang stressed that while the economic benefits of the project help alleviate the burden on taxpayers, the project also becomes a quality of life issue.
“I want to take today’s news to a higher level and talk about a bigger picture that affects our fundamental quality of life,” Wang said. “In order for us to grow here on Long Island and in Nassau County, we need to invest in our future. I’m not blind to our struggling economy and how it has affected everyone. I’m very cognizant of the substantial taxes paid by everyone, but the economy is not going to fix itself. We need to make decisions on opportunities that can be a catalyst for improving our businesses, our lives and especially our children’s lives.”
Wang continued, “The partnership that we are announcing today provides a road map to build a new sports and entertainment venue that will attract first-rate family concerts, family shows and sporting events. This arena will be a catalyst for Nassau County to grow and allow itself to grow and compete with all of the other new or relatively new arenas in the metropolitan area for these events.”
In order to pay back the borrowed money, the County and Charles Wang have agreed 11.5 percent of all gross revenue, net of taxes, generated at the new arena by the Islanders and all other events will be given back to County taxpayers.
“This transaction was structured where the tax payers will enjoy a percentage of gross revenue generated here in the arena that they will own,” Mangano said. “Every pretzel, hot dog, ticket, tax payers of Nassau County will receive a share of the gross revenue generated by the sale of those items here in this arena.”
Also heralded in the announcement was job creation. Mangano said the studies estimate 3,040 permanent jobs would be created in the first year that the arena would be operational. During construction 1,515 jobs would be created.
“Let me be clear, today’s lease agreement is much more than just retaining the Islanders,” Mangano said. “It’s an important step in creating a job-generating economic center for this generation and future generations as well as improving the quality of life here in Nassau County by providing a destination for our families to enjoy here in Nassau County.”
Since the taxpayers of Nassau County are being asked to support the new arena by passing the public referendum, residents and taxpayers of the county will own the new arena and the development rights to the surrounding 77-acres of ‘the Hub’. Therefore, prior to any additional development on the property, a Request for Proposal (RFP) would be required.
With a “yes” vote on Aug. 1, the taxpayers of Nassau County will give Wang and the County the authority to build the new arena, but it would still require a two-thirds majority vote in the County legislature before the project would be approved and allowed to break ground following the Stanley Cup Playoffs in 2012.