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As Ratner's Nassau Coliseum plan moves ahead, analyst predicts developer will try to renegotiate deal with county

In Developer Wins Approval to Renovate Nassau Coliseum, the New York Times reports that the Nassau County Legislature approved the $229 million plan by "the developer Bruce Ratner, the mastermind of the Barclays Center in Brooklyn," to "restore the utilitarian and increasingly outdated 41-year-old Coliseum, in Uniondale, N.Y."

And the article raises a question: though the deal is supposed to save county taxpayers money--they rejected a plan to pay off $400 million in bonds for a new arena--the Coliseum, without the Islanders but likely with a minor league hockey team, may have trouble surviving:
Dennis Coates, a professor at the University of Maryland, Baltimore County, who specializes in sports economics, said he doubted that the arena could generate the revenue it needed without the draw of a big sports team that can fill seats for roughly 40 home games a year, forcing the arena to rely mainly on concerts.
While it can attract big-name entertainers, he said, it will have at least three competing sites: Barclays, Madison Square Garden and the Izod Center, at the Meadowlands in New Jersey.
“The bottom line is,” Professor Coates said, “are they going to have to back out of the deal at some point and come back to the county and say we need more money, and the county will be on the hook.”
Wouldn't this have been the perfect time for writer Joseph Berger to quote an article he co-wrote last September with Charles Bagli, that Ratner has a "reputation for promising anything to get a deal, only to renegotiate relentlessly for more favorable terms"?

A spokesman for county executive Edward P. Mangano said the Islanders make up less than one-third of Coliseum events, still a big chunk.

Financing questions

The Times reports:
Forest City Ratner has offered to finance the entire $229 million cost of refurbishing the Coliseum and pay the county, which owns the building, 8 percent of gross revenue and 12.75 percent of parking revenue, with a minimum guaranteed payment of $4 million a year — a rental amount that would rise 10 percent every five years during the 34 years stipulated by the lease. The county in theory will not have to pay anything, but Mr. Ratner has indicated that he will ask the county’s Industrial Development Agency for some tax exemptions.
Finally, a tad of skepticism about what it means to privately finance an arena. There may be no direct subsidies, but there will be tax exemptions. Also unmentioned is the option to sell naming rights:
In closing

The Times article concludes:
In his pitch, Mr. Ratner predicted the transformed Coliseum would generate $9.6 billion in county economic activity over 30 years and more than 2,700 jobs.
Is this responsible journalism? Not in the slightest. What's "county economic activity"? It sure doesn't sound like a cost-benefit analysis. What kind of jobs, and at what wages? We don't know.

The Times shouldn't print such self-serving verbiage without a second analysis from a more neutral source.

Comments

  1. It should be noted the naming rights issues came up recently and Ratner said the name Veterans Memorial Coliseum will always be included in the name. Ratner flat out dazzled live on video for over two hours standing while being grilled by Nassau legislatures and a body that never goes 19-0 on anything and is cheering by the end.

    He can walk away from deal. He was grilled on financing, securing minor league hockey. Hiring minorities, women, pay scale. The timetable of when construction could begin 8/2015.

    Loser James Dolan's Newsday did everything possible in coverage from Randi Marshall to raise doubts, and hold out hope for NIFA denial or zoning from town of Hempstead, even publishing the full agreement.

    The Long Island Press called out Dolan's paper ignoring it's ties/contributions to Tom Suozzi who could sink the deal if not done by election day.

    ReplyDelete
  2. The issue isn't whether the official name will stay the same. The issue is whether the county ever counted the naming rights giveaway as a subsidy. Apparently, it didn't.

    ReplyDelete
  3. The only thing brought yesterday up along these lines was that Ratner is obligated to build a better memorial. Wang was willing to offer the veterans a million dollars for the name change during the Lighthouse and secured a deal which left open option for naming rights deal for the Lighthouse.

    This is a very small RFP, only 89 million for Coliseum renovations, the rest of 229m for restaurants, movies, bowling all around the tiny Coliseum footprint. The rest of the vast 77 acre land is to for Master Developer Don Monti.

    The Coliseum area will be closed from August 2015 to Sept 2017.

    ReplyDelete

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