9/11/09

Provisions TOH wants in Nassau's lease

New York Islander Fan Central | 9/11/2009 12:14:00 AM
We really need another professional media source like LIBN or a Mark Harrington to verify Eden Laikin's reporting because there have been too many omissions in past articles but if all this is true in the above links that hundred foot wall preventing the LH from happening has finally come into view.

So I will work within the landscape provided by these articles and try not to make any mistakes in how I interpret what's being reported.

Sure I could get some of this wrong too nor do I know what's standard practice in such building agreements vs trying to drive away a development.
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For Kate Murray/TOH it begins not even with local town issues or environment but Nassau/Tom Suozzi's " 99 percent completed " lease with Charles Wang and Scott Rechler which TOH has no part of but will not prevent them for making their own demands while holding zoning approval for what they want included in any completed lease.

And that would be only the beginning, who knows what else TOH/FPC want before giving approval and none of this has anything to do with environment, water, garbage, schools or electrical or what their outside agency requires once billing issues are settled.

Even worse let's say for argument sake the TOH approves the LH, the next step is the Nassau lease where Kate Murray wants in writing the project will create thousands of construction jobs and generate millions of dollars in tax revenue and is essentially re-writing the lease at this late date.

In short this means TOH can approve the project, Suozzi/Nassau can negotiate lease they want and right at the end, TOH-Murray can reject the project at the building permits hearing or the final step because they don't like the lease Nassau negotiated and approved.

Some of the things asked for are positive but some on paper seem completely unrealistic and a deal breaker for Wang-Rechler or any developer as if it's done to force them to walk away.

And this is only one article.

" Mr Suozzi as usual played his no LH, no Islanders card after he comments. Murray played her, they already knew this card. Charles Wang played the frustration and disappointed card.

So let's dig into the article, I know ten items were listed but things like Coliseum comes first was all in the LH proposal so some of this would not be considered new as presented.
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The article reports the following so-called new provisions with even that aspect disputed by both sides:

1. The New York Islanders to play all home games at the coliseum for no less than 30 years after its completion.

NYIFC comments: Wang was only offering a ten year extension until 2025 of the existing Islanders lease. Murray, TOH had to know this so as much as we all want the Isles here long-term beyond 2025 that provision puts Wang-Rechler and Nassau on the hook to keep renovating to play at the Coliseum for at least the next thirty five plus years if current renovation happened. This is something Murray and Suozzi could have negotiated with Wang on for years now.

As an Islander fan you want the club here for the next thirty years so that's a good thing but we all know what Wang offered there and he's not going to own the club forever.

Part of the negotiating or compromise? Sure, nothing wrong there or that Wang must get everything he wants and he can still sell any time he wants but it seems this was put in at this late date to stall things when Nassau/TOH should have put that out day one. Ten years for a renovation of this size is not a long time but that should have been negotiated years ago, now it seems thrown in for leverage by TOH specifically to drive Wang away.

It's also been common knowledge the Coliseum renovation comes first as Wang has said on several occasions with a lease extension until 2025. I have no idea why Murray is quoted as saying the Isles can move after rezoning when they cannot move until 2025 as part of a new lease?

2. The developer cannot:

Apply for tax breaks

NYIFC comments: So apparently every baseball team can get tax credits or free bonds, full ownership of their new stadiums and who knows what plus NJ-Newark paid for part of Prudential Center but Wang-Rechler cannot get a tax break and to date no one has explained how Smg will have it's lease condemned without a lawsuit from their side?

Is this how TOH works with businesses or makes sure a project is killed?

3. Leave any building in mid-construction

NYIFC comments: That one seems reasonable if a building is under construction but designed to keep up the pressure on a developer to have all financing in place before any shovel goes in the ground to construct anything and this rezoning commits Wang-Rechler to build everything approved as per final plan where x building goes on x spot.

4. Sell the developer's rights to, or change ownership of, the property without town consent

NYIFC comments: That also seems unreasonable because Wang will have to co-own the property into his nineties with Mr Rechler approaching his seventies so ownership will change hands in the future or sold to an outside party. It's not unreasonable TOH is consented when a change is made.

5. The developer must:

Seek building permits from the town for any construction on the county-owned site.

NYIFC comments: This seems in line with current approval process because there will be building permits hearings as the final step before the shovel goes in the ground unless TOH wants to do that step a second time in some manner when it's time to begin actual construction.

This could also mean some buildings are altered in the future for whatever reasons but why have a final draft if that's the case?

6. Hire local residents for all construction jobs, pay prevailing wages and offer state-approved apprenticeships.

NYIFC comments: This from the same TOH that hires Frederick P. Clark from Rye New York to do county business for a project of this magnitude when they could have hired local businesses? I don't even want to touch the reports about Kate Murray's father beyond writing what was in the newspapers when they add in who must be hired for construction jobs?

7. Make the town a third party beneficiary of the lease - a move that would give the town the right to sue for any breaches of the agreement.

NYIFC comments: So basically TOH wants ownership of this lease in the future knowing Wang-Rechler will not be around forever and TOH has to approve anyone they may want/have to sell to so they can take control of the completed LH at some point and have rights to sue them for any breaches of the agreement?

I keep thinking of Tom Gulotta's infamous " Pigs at the trough " quote about Howard Milstein a decade ago applies to the TOH here.

All this basically means the TOH wants to re-write Nassau's lease agreement which is a step they have no vote in. Nassau county will approve or reject whatever lease Wang-Rechler-Suozzi negotiate which is the out in the current lease but TOH/Murray want their say in that as well to the point they will not approve the project?

Is TOH/Kate Murray ready to pay to renovate the Coliseum or buyout Smg's lease on the taxpayers dime because that's the alternative with or without the hockey team after 2015. She wants TOH to have a say in the lease they should also be on the hook to pay for the ramifications if this project is not approved or they force Wang-Rechler away.

Meanwhile Wang-Rechler still own the Marriott hotel on that property.

Bottom line: TOH does not trust Wang, Rechler to complete the project or come up with the financing and feel Wang or Rechler could sell development rights while Wang can also sell the hockey team which will happen some day whether the lease ends in 2025 or it's included the Islanders play at the Coliseum until 2045. TOH also wants some financial interest as a third party and the right to sue the developers with guarantees of local permanent jobs and long-term profits.


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