Today’s Daily News features an editorial on next Monday’s New York Islanders arena vote, which is notable for a couple of reasons: One, it’s a rare acknowledgment by the New York media that there is, indeed, a sport known as hockey; and two, it’s an even rarer admission that there’s another hockey team in the area in addition to the Rangers and that one in New Jersey that wins Stanley Cups every so often, a team that otherwise survives in New York sports lingo only in the archaic expression “Potvin sucks!”
The Islanders arena saga has dragged on even longer than the Islanders’ playoff drought, and has until now been just about as fruitless. Way back in 2004, Islanders owner Charles Wang was proposing a $200 million of the Nassau Coliseum — which opened even wayer back in 1972, with a basketball game between the New York Nets and the Pittsburgh Condors — surrounded by a development called the Lighthouse Project, which was to include hotels, housing, offices, and a 60-story lighthouse modeled on the Great Lighthouse at Alexandria. After many twists, turns, and rumors that the Islanders would move to Kansas City, that plan was torpedoed by local officials last summer, leading Wang to go back to the drawing board.
What he came up with this May was a new mega-development plan, this one with no lighthouse, and no Nassau Coliseum either. Instead, there would be a new arena, a minor-league baseball stadium (presumably for an Atlantic League team to compete with the Long Island Ducks), and housing, all paid for by $400 million in county bonds. In exchange, Nassau County would get a cut of the arena proceeds — 11.5% worth, to be exact — assuming voters in the all-but-bankrupt county approved the plan at the ballot box in a special election on August 1.
It’s an unusual deal by modern arena standards, in that while taxpayers would be fronting the construction budget, the team would actually pay annual rent on the building. (Compare, for example, with the Indiana Pacers’ arena deal, where the team owners pay only $1 a year rent and no property tax — and subsequently convinced the city of Indianapolis to pay them $10 million a year for their own operating expenses.) On the other hand, the rent would rise and fall with the team’s fortunes at the box office, which given recent history can’t be very reassuring to voters.
Which brings us to the other oddity about today’s Daily News item, which is that it took the rare step of outright slagging a plan that has the support of Nassau’s political and business leadership. (A bit too much support on the political front, in fact: Nassau County executive Ed Mangano has been accused of running an illegal vote-yes campaign out of his public office.) As the editors write:
Sunnily, the Islanders foresee an astonishing 73% rise in attendance, producing $229 million in annual gross revenue.
Multiply that $229 million figure by the 30-year life of the bond issue that Mangano is proposing, and you get a stupefying $6.9 billion. Just the .9 part is more – actually, a lot more – than the $768 million in total debt service the county expects to incur on the arena.
That being the case, the county would be much better off passing on Wang’s promise of a cut of the action and requiring him to raise private financing – assuming private lenders would give him money at a reasonable rate. If not, why should the public?
The legislative office is far less optimistic than Wang. It projects, perhaps, a 14% jump in attendance, an amount that would require the Islanders to pay the county only $14 million a year – which is, oh, just $12 million a year less than the county would have to pay on the bonds.
The News goes on to note, rightly, that much of the $3 million in sales tax revenue projected to accrue from the arena project would be cannibalized from elsewhere in the county; and concludes, somewhat less rightly, that “every taxpayer would have the privilege of spending $20 or so a year in order to enable Wang to enjoy gross annual revenues, by his own calculation, of $229 million.” (If Wang grosses $229 million a year, taxpayers will get their $20 apiece back; if not, taxpayers take a bath, but Wang doesn’t do nearly as well either.)
In short, Nassau County voters are being asked less for a giveaway than to stake Wang to a gamble: Put up $400 million in tax money, and end up with somewhere between clearing a profit and posting a $12 million a year loss. And, of course, guarantee the right to keep watching the Islanders for decades to come — which could be the biggest gamble of all.