In routine vote, Nassau County approves amendments to support Coliseum reopening. Again, a misunderstanding: "So this lender... They aren't running the Coliseum, right?"

Nope, nobody cares about the Nassau Coliseum switcheroo, in which the middleman for the building's EB-5 loan, an affiliate of Nicholas Mastroianni's U.S. Immigration Fund, curiously became the leaseholder, after Mikhail Prokhorov's Nassau Events Center (NEC) withdrew.

Though I raised some significant questions about the candor of Nassau County officials and what County Legislators understood regarding the County-owned building, neither officials nor the press took it up.

So the Legislature on 2/22/21 unanimously approved lease amendments allowing rent relief for the tenant and also--as Newsday put it in a brief summary, protected "the county from potential lawsuits against the leaseholder."

And, as I describe below, the Legislature still doesn't understand the switcheroo, with the Presiding Officer confusing the lender and borrower--not surprising, given the convolutions.

The upshot

That means, as Patch reported 2/24/21, the New York Islanders will resume home games with fans on 3/18/21, at 10% capacity. And the end justifies the means:

"I'm thrilled that Islanders fans will be able to rock the Barn next month," said Nassau County Executive Laura Curran. "This is a big step towards our safe return to normal, and the reopening of the Coliseum means so much for Nassau. We know virus risk is dramatically reduced with precautions in place and rules being followed. I'm confident that we're ready to do this safely and smoothly, and hope we can soon further increase the number of fans in the stands."

The description

I watched the video of the session. Deputy County Executive Evlyn Tsimis stated:

The leasehold lender, Nassau Coliseum Funding 100 cured NEC's rent default to the county. Their designee Nassau Live Center LLC stepped into the shoes of NEC as Coliseum tenant by operation of the lease provision I mentioned before, schedule J. And Nassau Live took on all aspects of the restated Coliseum lease, as well as the borrower obligations under the EB-5 loan.

What she didn't say--nor was asked about--was how the lender made that decision. (We don't know, but we do know that the Manager of the lender is controlled by the same party who controls the designee, the new borrower.)

Nor did she note that the borrower obligations might have been diminished by Mastroianni's effort to have the immigrant investors shift their investment to another EB-5 project.

Tsimis stated:

Finally that amendment also includes indemnification to the county by the EB-5 lender in connection with any potential claims by investors associated with the EB-5 financing and the assignment and assumption of the lease by Nassau Live.

I guess that protects "the county from potential lawsuits against the leaseholder," but I'd be curious to see whether and how the "members" of the lender got to approve that, or whether that was done by the Manager--aka Mastroianni. And why the county needed to be protected--did someone recognize that the changes made a lawsuit more likely?

Going forward

Presiding Officer Richard J. Nicolello observed:

We've come a long way since Bruce Ratner was the party with whom the county contracted and he had vast experience in developing arenas, so this lender--and I spoke, I spoke to Nick Mastroianni... They aren't running the Coliseum, right? They bring in an entity that knows how to operate a facility of this kind, correct?

(Emphases added)

Again, a lack of understanding: Mastroianni is not the lender, but the "borrower"--he took over the lease and the (seemingly diminishing) loan obligation, but as Manager he controls the lender, according to the loan prospectus.

Tsimis's response focused on the actual operator:

That's correct, Presiding Officer. Right now as I mentioned they have a contract in place with ASM, which is an experienced company that that runs arenas that was in the building, even before under Onexim/NEC and I think there's like levels to this that, you know people, people forget and so ASM has been on the scene they're continuing to be on the scene, and they would likely be. And I think the good news is that Mr. Mastroianni sees the investment opportunity and the possibilities of the Hub site redevelopment and you know, we're discouraged that the former tenant chose to move in a different direction, but I think that the fact that someone stepped in as quickly as he did, sees the potential here, and is excited about and working collaboratively with our hub developer. This is all good news for the project.

Yes, there are "levels to this."

Unmentioned: of course Mastroianni sees the investment opportunity. He acquired the lease to both the Coliseum and the Hub project without, as far as has been announced, any investment, and he's already tried to diminish his obligation to repay the loan.

A downsized Coliseum?

Tsimis continued:

So, the development team and the current tenant are looking at all options for... reactivating the Coliseum in a way that's going to be successful. So we all know Belmont's [the new USB Arena, home to the Islanders] coming online at the end of the year, an 18,000 seat venue and we have an almost 14,000 seat venue here, Nassau Coliseum. And so what they're looking at is ways to ensure that the two venues complement each other, rather than compete. And talking to third parties and others who may have ideas in that regard about what kinds of programming would be good in that building. There does seem to be a hole in the market in Nassau County, on the island, for a six to eight thousand [seat] venue... But that's not to say that there's anything firm on that. They're just looking at it and we encourage them to, because I think those types of, I think, thoughtful discussions about what will be the most successful is what we would want to hear. But obviously if you're going to move seats out you'd have to make up the revenue in some other way, so more to come on that, Legislator, we're just not there yet.

Yes, the Coliseum might be downsized.