By Eden Laikin
A bipartisan group of Nassau Legislators yesterday preliminarily approved the lease between Nassau County and Forest City Ratner Companies to redevelop the Nassau Veterans Memorial Coliseum and surrounding plaza.
The lease will now be advanced to the full County Legislature for approval during the Sept. 23 session.
“With approval from three Nassau County legislative committees, redevelopment of the Nassau Veterans Memorial Coliseum into a world-class sports and entertainment destination is closer to commencement than ever before,” Nassau County Executive Edward P. Mangano said in a statement after the late day vote. “This road to redevelopment paves the way for thousands of new jobs, a broader tax base and a stronger local economy.”
Nassau Events Center – a Ratner subsidiary – won Nassau’s RFP last month to redevelop the dilapidated arena and transform the 77 barren acres around it, into a multi-use destination.
If the project gets the go-ahead, NEC will assume maintenance, utility and operation costs of the Coliseum as soon as the New York Islanders hockey team’s lease with arena manager MSG ends July 31, 2015. That will save Nassau County millions of dollars that it now loses each year funding capital improvements at and upkeep of the building.
Under the contract, NEC would begin paying the County $50,000 a month in rent for the arena during the time it goes for and receives its building and zoning approvals from the Town of Hempstead, and then $100,000 month during the 18-month construction period.
NEC will also pay the County $400,000 for plaza improvements.
In the first year of operation, Ratner’s group will pay in rent whichever is greater – 8% of the facility’s gross revenue plus 12.75% of parking fees, or $4.4 million a year. After five years, that minimum $4.4 million payment will increase 10% every 5 years, for a total of more than $300 million in direct revenue to the County over the 49 -year lease.
The County retains control of any future development on the leftover acres.
The gross revenue will include ticket fees, concessions, suite fees, sponsorship, naming rights, etc.
NEC’s lease provides for the Islanders to play 4 season and 2 preseason games; 4 training camp days over 10 years; a minor league hockey team for home games; preseason Brooklyn nets game; and a partnership with the NY Yankees, Dallas Cowboys and Legends.
It also includes an agreement that states all construction and operations of the Coliseum and outside development, will be done with all union labor.
The Coliseum’s anchor tenant will request standard IDA benefits. for sales and use taxes, mortgage recording tax, and the property tax exempt status the building enjoys now.
If asbestos – or any hazardous materials – is discovered in the Coliseum during the rebuilding, NEC will be responsible to remediate.
Nassau County can use the arena for up to 10 days per calendar year and will only be charged NEC’s out of pocket expenses for the use.
Ratner has said he will keep the Nassau Veterans Memorial Coliseum name, but sell additional naming rights to offset expenses. He would also sell sponsorships for inside the building. And, a $1 million veterans memorial will be erected on site.
Representatives said Ratner’s new Barclay’s Center in Brooklyn is #1 in ticket sales and gross revenues, in the country. They will use the same architects for the plaza area around the new arena, as well as for the design of the master plan of the surrounding retail.
NEC submitted a letter to the legislature today, from Goldman Sachs, vouching for its financing capability. And, they told those attending the meeting that the coliseum will have to close for some time during the rebuilding process.
NEC has planned 300 events for the new Coliseum, 200 of which have already been secured. They include circuses, Brooklyn boxing, college basketball and cirque de solei.
Surrounding the Coliseum will be 150,000 sq ft of retail with an open plaza; 60,000 sq ft of dining; bowling alley, movie theatre with 10-12 screens, and a smaller Filmore concert arena.
No taxpayer money will be used to fund the redevelopment, and it will create 2,700 jobs on an ongoing basis.
The more far reaching goal, county officials said, is to tie the new destination to rapid transit and the nearby colleges.
Before they can begin construction, NEC officials must have a Site plan approved by the TOH; design the coliseum and retail portion, and estimate the cost projections; hire a construction manager; arrange sale of the naming rights and sponsorships to secure the financing, etc.