With Islanders heading for Belmont, some question marks for Barclays (and others)

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The New York Islanders have won the bid for a new 18,000-seat arena (plus retail and a hotel) at Belmont Park, according to reports (Newsday, Bloomberg), presaging an end to a mutually disappointing stint--with low attendance (last in the league, currently 11,567), and low revenues, as I detailed for The Bridge--at the Barclays Center in Brooklyn.

Gov. Andrew Cuomo is expected to make the announcement at 11 am today, presumably with Islanders' owners and players in attendance. (The Islanders' bid is in partnership with developer Sterling Equities, led by the Wilpons, owners of the New York Mets, and the investment advisory firm Oak View Group.

Long Island fans are cheering at the opportunity to bring their team "home" and the chances of retaining star John Tavares--NY1 appparently reported that fans chanted “Belmont! Belmont! Belmont!” at last night’s Islanders game at Barclays.

But managers at Barclays likely are wary, given that a new arena could cannibalize dates from the recently revamped Nassau Coliseum that they operate. (Newsday Editorial Board member Randi Marshall thinks both can thrive, though Newsday yesterday quoted a sports economist predicting just that cannibalization.)

A good move for Barclays?

Would the Brooklyn arena do better after shedding a deal with the Islanders that has proven onerous, with arena operators unable to grow the fan base? Though the New York Post cited "sources" saying the arena operator, Brooklyn Sports & Entertainment, believes it could increase profits by substituting concerts and other events, that contrasts with a 2015 statement by arena CEO Brett Yormark that booking 44 hockey games represented an "insurance policy," given "the volatility of the concert business." 

In October, ratings agency Moody's expressed caution:

We further understand that, if the agreement with the Islanders is terminated, the arena's management would plan to replace as many as possible of the 44 dates now dedicated to the Islanders with more profitable events, such as concerts and shows. While this incremental revenue and margin accretion would improve coverage ratios, in Moody's view, future revenues streams may be less predictable that the original expectations under the arrangement with the Islanders.

Local impact

A few bars and eateries close to the arena are dismayed at losing party-hearty hockey fans, as noted by amNewYork, while some near neighbors might say good riddance to sometimes rowdy fans.

A boon for the Islanders owners

For the Islanders owners, who've tried unsuccessfully to sell a 15% stake in the team at a $500 million valuation--though Forbes values the team at well below the $485 million payment price--this should help, notes Mike Ozanian of Forbes.

Some pending questions

Today's news conference should answer how much the Islanders bid for the state-owned site. As I wrote, money's not the main criterion: it makes up just 20% of the weighting set by Empire State Development (ESD), the state economic development authority that oversees the land (and also Atlantic Yards/Pacific Park/Barclays Center).

See p. 15 of the RFP, excerpted at right, which also weights, at 30%, both the project design/timing and the "extent to which proposed Projects strengthens Belmont as a premier destination for entertainment, sports, recreation, retail and hospitality on Long Island."

Perhaps we'll learn some important unknowns, like projected new tax revenues and other public benefits.

One lesson of the Barclays Center and Atlantic Yards/Pacific Park is that such projections should best be delivered with a cautionary range of potential outcomes, not just best-case scenarios.

Oh, and construction jobs are calculated in job-years, and arena jobs are mostly part-time. Still, the Islanders' proposal, according to Newsday, has 5,000 temporary construction jobs (over two years, that's 2,500 people employed; over three years, that's fewer than 1,700) and and 2,000 permanent jobs (surely many are part-time).

We also don't know how much direct or indirect public assistance (like a revamp to Belmont's Long Island Rail Road station) is expected. 

Nor do we know whether Empire State Development has tried to assess the impact of this new arena on the Nassau Coliseum (county-owned) or the Barclays Center (nominally state-owned, with subsidies justified in part on projected new revenues).

In other words, is this announcement--a platform for Cuomo and some other officials--a prudent decision by New York State? The only rival bidder was New York City FC, for a soccer stadium.

Where will Islanders play in interim?

We may not know until January 1, when Barclays and Islanders' management finish negotiations, where the lame-duck Islanders will play during arena construction. They've already committed to Brooklyn for a fourth season, but they need a home for a fifth season--and possibly longer, if construction hits snags. 

While Barclays, perhaps plus some dates at the undersized Nassau Coliseum, may be the most logical outcome, Barclays managers, according to Bloomberg, have pushed Nassau (which could use the business) as a temporary venue, and the National Hockey League may be amenable to it, as Nassau might help Long Islanders re-embrace the team.

Indeed, Brooklyn Borough President Eric Adams, seemingly taking marching orders from Barclays (which is not permitted to comment publicly on negotiations), tweeted that "they should consider Nassau Coliseum in the interim period." 

His additional statement that "There's only one #Brooklyn team for @BarclaysCenter and that's the @BrooklynNets" antagonized some Islanders fans who noted that they'll be going to Barclays for at least a season and a half (and live/work in Brooklyn), and that the Islanders, not the Nets, are likely to make the playoffs. How much more frosty can the relationship between Barclays and the Islanders get?