Wang's Interest in Nets Revives Talk of New Coliseum
By Monte R. Young
November 19, 2003
For years, Neal Lewis has participated in the on-again, off-again
plans of two consecutive Nassau County administrations on plans for
building a new coliseum and developing the Nassau hub near Roosevelt
"It's been stuck, moving nowhere for years," said Lewis, executive
director of Long Island Neighborhood Network, which represents 49
environment and civic advocacy groups.
That all began to change this summer, however, when former Computer
Associates owner Charles Wang announced a bid to buy the New Jersey
Nets, and to create a new home for them at the Nassau Veterans
But while Wang's proposal has given new urgency to efforts by Nassau
County Executive Thomas Suozzi to develop a plan for a new coliseum,
the project would also face major hurdles.
The cash-strapped county would have to borrow hundreds of millions of
dollars not only for a new building for the Nets and the Islanders,
but also build transportation lines, including railways and roadways,
that experts say are needed to attract a solid fan base.
"This is a huge project, the biggest since Levittown," said Morton
Certilman, chairman of the Long Island Regional Planning Board. "The
task won't be easy -- there are transportation and residential issues
that have to be addressed."
"I would love for the Nets to come back to Long Island," said State
Sen. Dean Skelos (R-Rockville Centre). "But the county is broke and
they are looking at huge deficits in 2006 and 2007. The state has its
own deficit problems."
Suozzi officials agree that for the Nets to make a financial go of it
on Long Island, a new state-of-the art facility would have to be
built. A new arena could be ready within three years, Suozzi has said.
Depending on its size, a new coliseum could cost between $250 million
and $400 million, according to county officials and experts in such
projects. The new arena would be expected to seat about 20,000
people, county officials say.
But the project would require massive borrowing: The debt service
alone on a facility costing $300 million would be about $10 million a
year at current interest rates for 30-year bonds, administration
County officials said that whatever debt is incurred would have to be
offset by new revenues. Nassau would use a portion of revenues from
the expected increased use of the coliseum for concerts and NBA
basketball games, with proceeds coming from sales taxes and a ticket
surcharge, officials said.
Administration sources say Nassau could earn $10 million to $14
million a year in event revenues, though they declined to specify the
portion that would go toward the bond debt.
Brian Donlon, branch administrator for Advest, an investment
brokerage firm in Garden City, characterized Nassau's plan for
financing the new facility as "feasible."
"You are talking about the Nets and Islanders -- both for the last
two years have brought in postseason dollars," during playoffs,
Donlon said. "That's extra money you're looking at. Depending on how
aggressive my client wants to be, I'd recommend those bonds."
Yaffa Rattner, a senior vice president with Moody's, a Wall Street
bond rating firm, said the county's plan to float construction bonds
appears sound. However, Rattner noted that "Nassau would be trying to
do this in an environment where it is fighting to regain its fiscal
Rattner's comments reflected a common concern. While an upgrade
Tuesday in Nassau's bond rating highlighted the slow improvement in
Nassau's fiscal picture, the county still is nearly $3 billion in
debt, and that could give lawmakers and Wall Street analysts pause
about signing off on hundreds of millions of dollars in new debt.
"I'm not optimistic about a new arena in the future because there are
so many economic ," said former Republican Presiding Officer Bruce
Blakeman, who considered a new coliseum and hub development when the
GOP held the majority in the county legislature.
But Blakeman, an attorney in Valley Stream, said that "if Mr. Wang
acquires an NBA franchise, that would change the dynamics and
significantly improve the prospects of successfully building a new
Meanwhile, officials said a major transportation system would have to
be developed along with additional hotel rooms, office space,
restaurants and other sports related entertainment, to make the hub
area attractive to visitors.
Using $700,000 in federal funds, the adminstration has begun a
transportation study for the hub area and has hired STV Inc., an
architectural and engineering firm in Manhattan, as the lead agency.
Officials hope to have a plan in place by the spring.
"We have to be prepared should Mr. Wang be a successful bidder, with
a plan that the bond rating agencies will buy into," said Peter
Sylver, deputy county executive for economic development. "We are
going to be ready."
Finally, Nassau faces the problem of getting out of the contract with
the company that runs the coliseum.
SMG, of Philadelphia, manages the coliseum under a lease that runs
until 2015. The company receives the bulk of revenues from concession
stands and luxury boxes and has the right to manage any facility
built on the 70-acre parcel around the coliseum.
While it is unclear how much SMG earns overall from the deal, county
officials say it could cost as much as $20 million to renegotiate the
contract or to buy out the lease.
In meetings during the past year, Suozzi officials essentially have
threatened to cancel the lease through government action unless SMG
agrees to a new management contract giving the county sole rights to
develop the property around the Coliseum. Talks are currently stalled.
"We've had ongoing meetings with Islanders and the county as part of
a task force for the hub area, and there aren't any easy solutions
for anybody," SMG president Wes Westly said. "Our position is, we
don't want to stand in the way, but we want a fair business