Town Councilman Touts Nassau Coliseum Deal

In a perfect world, Charles Wang would pay to build a new Nassau Coliseum himself and the New York Islanders hockey team would stay put no matter, says Town of Hempstead Councilman Ed Ambrosino.

"That's not happening though," Ambrosino told about 30 residents gathered at Thursday's meeting of the West Hempstead Rotary club. "By agreement the New York Islanders are leaving the Coliseum in 2015 if they don't get a new facility...[and] without a major sports team the Coliseum is not sustainable."

The club had been expecting Chris Melvin, a lawyer with the firm of Nixon Peabody, who negotiated the deal for Nassau County to redevelop and lease the Coliseum, but a "very last minute emergency," according to the Rotary, prevented him from attending.

Ambrosino explained that he too was on the legal team that worked on the building's lease and knows Melvin, who he considers a "sports stadium expert."

"The reason we hired Chris Melvin is that before he was at Nixon Peabody, he was the banker who financed Disney and he's done the last 30 stadium deals in the country," Ambrosino said. "Is this a perfect deal? Absolutely not, but it's the best [Chris] has seen on the municipal level."

Ambrosino then went into the details of the plan, explaining that the County would own the Coliseum but lease it to Wang. He said Nassau County residents (if they pass the bond referendum on Aug. 1) would invest in the new Coliseum initially to cover the debt service for the first two years while the facility is being constructed. Once it opens though it will start making money (about $470 million the first year and increasing 3 to 7 percent each year after.) and residents should expect to make the money back, plus more, overtime. So while the initial cost to the average taxpayer may start at $58 per year, Ambrosino said, it would gradually diminish and eventually lower the tax burden.

"Is it a leap of faith? It absolutely is...but our consultants said over the lifetime of the [30-year] bond, $403 million will be generated," Ambrosino said.

Where will this come from? He explained that under the deal, the County receives 11.5 percent of the gross revenue from every event held at the Coliseum, a minimum of $14 million a year, plus additional revenue from ticket and sales tax. 

"That bucket of revenue will be used to pay the debt service," he said.

Wang would get the remaining 88.5 percent but must pay the County first.

"Charles Wang doesn't get a dime unless we get 11.5 percent of the top dollar," Ambrosino said. "The bonds are going to be repaid so in essence, he's paying for it."

Under the deal, the County retains all the development rights to the property - a major change from the Lighthouse Project Wang proposed three years ago, which was ultimately determined to be "not finance-able," Ambrosino said.

Another difference between the two plans is that the Lighthouse Project had the potential to cannobalize local businesses, according to Ambrosino, possibly hurting Mom and Pop shops if chain outlets were brought into the area. Under the Coliseum deal, "Mr. Wang can't build anything except a parking facility without consent of the community," he added.

Wang would also be responsible for any increases in cost due to scope changes. If the project goes over $350 million - the amount of the bond - Wang will have to cover it, but he does have the option early on to opt out if the price exceeds $375 million.

One group that has come out against the bond referendum is the Association for a Better Long Island (ABLI) which has demanded that the Nassau County Finance Authority (NIFA) block the Coliseum project from affecting Nassau County taxpayers. ( for the full story.)

"I renamed them the Association for a Barren Long Island," Ambrosino said, accusing the group of opposing the deal for personal gains. "They want to develop this site."

Ambrosino also pointed out that in addition to creating 3,200 construction jobs (with a preference for local, union workers), the deal would also attract new business to the area and help existing ones, which feed off of events held at the Coliseum. Using Borrelli's restaurant on Hempstead Turnpike as an example, he said 90 percent of its business comes from the Coliseum.

"It's a ripple effect," he said.

Ambrosino predicts that if the deal fails and the Islanders leave, the County will not find a major sports team to replace them and the facility will remain empty for many years. "No revenue would be generated and no jobs created," he added.

"If we want a venue that improve the quality of life in the area this seems like a good deal, West Hempstead Rotary Secretary Leo Monahan said. "It's a win-win for everybody."

Others in attendance questioned why the County did not secure a personal guarantee from Wang, but Ambrosino said it tried but Wang's lawyer refused. Instead, they obtained letters of credit and a UCC pledge agreement.

One woman also asked if the County would be able to attract major concerts once Madison Square Garden completes its rennovations. Ambrosino said the County is predicting 220 new events will come to the more high-tech Coliseum and said they have already received soft commitments from some of the top music promoters. He also reminded people that despite the economy, Long Island is still considered an "incredible wealthy market for disposable income...people want to come here."

Ambrosino concluded his presentation by telling those in attendance that he, along with his wife, would be voting "Yes" on Aug. 1.

"If you had a gut of 'No,' give it some thought," he said. "Vote your conscience and do what you have to do for the best of your self and your family. We really worked hard on this, it's the best deal we could negotiate and we have the seal of Chris Melvin...so it's worth your consideration."

He then jokingly added, "If you're going to vote 'No,' it's supposed to be sunny, so go to the beach on Monday."