Lease faces review by county legislature, NIFA
Nassau County selected Nassau Events Center to redevelop Nassau Coliseum and the surrounding property, by offering the county a significantly sweeter deal.
Bruce Ratner, the developer of the Barclays Center in Brooklyn and NEC’s chief executive, beat out Hank Ratner (no relation) and the Madison Square Garden Company after the
county narrowed its choices to the two entertainment giants last month.
At a news conference in Mineola on Thursday, Aug. 15, Mangano noted revenue differences in the two proposals drove the final decision.
NEC agreed to pay 8 percent of the gross revenue each year to Nassau County and 12.75 percent of parking fees. The group guaranteed payment of $4 million per year, escalating 10 percent every five years during the lease. That would total at least $195 million over the life of the lease. [Both plans are based on a 34-year lease with an optional 15-year extension.] On top of that revenue, NEC offered an additional 8 percent of revenue generated by its entertainment facilities.
MSG would have paid $1.50 per ticket sold, rather than a percentage. It guaranteed $3 million in the first year, escalating 5 percent every five years. MSG payments would total $112 million over the life of the lease. What’s more, MSG wanted to retain development rights to the site. NEC’s plan allows the county to retain those rights.
Both companies agreed to shoulder the maintenance and utility costs of the property. County officials estimated that utilities costs $2 million alone each year.
Mangano said the selection committee was impressed by NEC’s willingness to accept immediate responsibility for the coliseum at its sole expense and pay a measurably higher annual minimum rent with higher escalations.
“With options exercised, the minimum lease payment grows to $334 million,” Mangano said of Ratner’s proposal.
NEC’s lease must be approved by the county legislature and the Nassau Interim Finance Authority. County Executive Edward Mangano said NIFA “sees no issue” with the NEC plan.
Bruce Ratner developed the Barclays Center, where the New York Islanders will move once their Nassau Coliseum lease expires on Aug. 1, 2015. He said he’s “grateful to be selected to revitalize” the 77-acre site here. Syosset-based developer Ed Blumenfeld joined forces with NEC in last month after his group’s proposal was rejected.
NEC’s $229 million plan calls for a 13,000-seat arena, a 2,500-seat indoor theater, an ampitheater, up to 10 restaurants, an ice skating rink and 50,000 square feet of retail space. The developer also plans to have the Islanders host at least six home games at the site.
Mangano said NEC’s proposal would create a “downtown-like” atmosphere at the site.
“We are ready to get to work to deliver a world-class coliseum and a thriving sports, entertainment and retail center that Long Island deserves,” Ratner said in a statement.
MSG’s $250 million plan offered a 14,500 seat stadium, with restaurants, bars and had the support of Donald Monti of Renaissance Downtown, the master developer of the hub. That group hoped to recruit an amateur hockey team to the site and get WNBA’s New York Liberty to play select home games.
“While we are disappointed with the county’s decision, we are not at all surprised given the history of this project, ” MSG said in a statement. “We will be watching closely as this process moves to the county legislature.”
Republican Legislator Rich Nicolello said the recent proposals were the most realistic going back to the failed Lighthouse plan of Islanders owner Charles Wang.
“We have to go through the details of the lease but my first impression is very positive,” he said. “It’s taken way too long for us to get to this point.”
