Skip to main content

Despite pageantry for revamped Nassau Coliseum, some uncomfortable truths (and a deceptive name)

Newsday/Randi Marshall on Twitter
The ribbon-cutting Friday, March 31 of "NYCB LIVE, home of the Nassau Veterans Memorial Coliseum Presented By New York Community Bank," garnered much press coverage and buzz.

After all, the revamped arena has a classier and more accessible interior, new wi-fi and Long Island Taste concessions (a la Brooklyn taste), and an exterior encased in a shiny metal skin from SHoP, the firm that wrapped the Barclays Center in a rusty metal skin.

Developer Bruce Ratner, of Forest City Ratner, and Brett Yormark, the chief marketer, surely basked in a ceremony reminiscent of successful launch, in September 2012, of the Barclays Center. Yes, the branding also looks similar, as Newsday's Randi Marshall pointed out.

And County Executive Ed Mangano (R-indicted) will deliver his State of the County Address at the Coliseum tonight.

But the hype got huge. In October 2013, Ratner claimed, "As the Eiffel Tower is to Paris, this will be to Nassau" and, on Friday, according to Newsday, he called it an “iconic” venue that “would rival the Eiffel Tower." Understandable scorn ensued on Twitter.

Moreover, just as the plaudits for the Brooklyn arena have distracted people from its lagging profits, the pageantry for the downsized arena in Nassau obscured some uncomfortable truths or complicating facts.
Looking at the promises

Consider: before construction Mangano promised the arena would be "employing 2,700 people," "host over 250 events annually, including six NY Islanders games... minor league hockey," and be upgraded thanks to "$260 million in private investment from Bruce Ratner’s Nassau Events Center (NEC)."

Will 2,700 people work full time at the arena? No way. Actually, the arena has hired about 1,500 part-timers, more than the claimed 1,300 when hiring began last November. Whatever the number, the limited schedule surely means that the full-time equivalent (FTE) jobs are far fewer. Salaries went unmentioned.

And if the arena created "more than 1,035 direct construction jobs, and more than 570 additional indirect and induced jobs in Nassau," as stated in a press release, well, we shouldn't count indirect jobs. Moreover, construction jobs are counted in job-years.

Will the arena host over 250 events? There will be “north of 200 events a year” at the Coliseum, Yormark told Newsday. One reason for the discrepancy is that Yormark habitually blows smoke. Another is that minor league hockey is not coming, after all, though Yormark said the arena is in negotiations to add a second team to the Long Island Nets. 

The EB-5 pitch in China used hockey
Another is that the six Islanders games are by no means certain and observers reported the Islanders' history is nearly erased. (Newsday quoted some sports industry experts, including the ubiquitous professor Andrew Zimbalist, as saying that the Coliseum still might be successful. Of course Zimbalist's work for Ratner on Atlantic Yards went unmentioned.)

Was there "$260 million in private investment from Bruce Ratner’s Nassau Events Center (NEC)"? Well, the renovation cost $165 million, according to the official press release. (The rest of the money, apparently, would go the yet-unbuilt entertainment complex on the 77-acre site.)

Of the money spent, $90 million was expected in a low-interest loan from 180 immigrant investors--most or all from China--seeking green cards under the questionable EB-5 program. The rationale for EB-5 is that it creates jobs, but the renovation was already on its way, so that's dubious. 

And while the money is not direct taxpayer funds, it's the equivalent of a subsidy, as noted by NYU's Jeanne Calderon. After all, if we sell our green cards, an alternative program might serve the public interest far more.

Who was missing?

Not only were the Chinese absent from the Coliseum pageant, so too--mostly--were the Russians. 

Though in October 2015 we learned that Mikhail Prokhorov's Onexim Sports & Entertainment would take over 85% of NEC, Prokhorov and colleagues barely got a mention. (The press release did quote his deputy, Dmitry Razumov, Onexim CEO and Chairman of Brooklyn Sports & Entertainment, Prokhorov's umbrella vehicle.)

That means that, while Ratner's company may have managed the renovation, it did so on behalf of Prokhorov, whose company claims NYCB Live among its venues.

What's in a name?

As the logo suggests, NYCB Live takes precedence over "Nassau Veterans Memorial Coliseum." Look at the map below of the Ford Parking Lot for another example.

But there's a problem with the name "NYCB LIVE, home of the Nassau Veterans Memorial Coliseum Presented By New York Community Bank."

NYCB LIVE doesn't yet exist beyond the Coliseum. Yormark told Newsday in December 2014 that the Coliseum would keep its name while he sold naming rights to the sports and entertainment complex.

"We wanted to be respectful of the community," Yormark said. "Keeping the existing name is the right thing to do."

Yeah, sure. They've clearly blurred it.

As one Newsday commenter, Phil Insardi, wrote:
The name was supposed to be changed to "The Nassau Veterans Memorial Coliseum presented by New York Community Bank". Suddenly the name changes again so NYCB can get top billing. The taxpayers of Nassau own the building. We should get top billing. It is not owned ny NYCB. It is incorrect and morally wrong to change the name to "NYCB Live's Nassau Veterans Memorial Coliseum". It's also time for the taxpayers to learn how much Ratner got paid for the renaming rights and how much Nassau County gets from that amount. 
We don't know the value of the deal, though 8% of gross revenue goes to Nassau.

Going forward

The Coliseum does look to have a busy opening, with Billy Joel, Stevie Nicks, Marc Anthony, Barbara Streisand, Metallica, The Weeknd, and Bruno Mars, plus the circus. (By the way, parking for Billy Joel is $40, Stevie Nicks, $30, and Idina Menzel $20-$30.) 

The question is what kind of deals they made to sign the acts, and whether they can sustain arena-filling shows. After all, Barclays started with a bang too.

Newsday noted delays in the announced plan to redevelop the 77-acre Hub around the Coliseum, and a lawsuit between Forest City Ratner and a former partner, Blumenfeld Development Group.

And when Yormark suggested that the Sprint Center in Kansas City and The Forum in Los Angeles do well without an anchor major league team, Newsday noted that those venues are in entertainment districts, not surrounded by a parking lot.

Will Nassau (with help from the state) lure the Islanders back to the downsized Coliseum, as Nassau County Legislature Presiding Officer Norma Gonsalves expressed? We'll see.

The Islanders owners want to keep the team in New York City for TV revenue. Building a new arena would be enormously costly. My best guess is they'll try to renegotiate the deal with Barclays.


Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…