Islanders to pay one-tenth as much per acre for Belmont arena as Aqueduct land goes for

When I tried to do some quick-and-dirty estimates last week of how much of a sweetheart deal the New York Islanders owners will be getting on state-owned land at Belmont Park for a new arena, I came up with a discount of anywhere from 52-87%. (Or, put another way, the land is likely worth anywhere from double to eight times what the Islanders are paying for it.) Now, Norman Oder’s Atlantic Yards Report has come up with another comparable to use as a basis for estimating the land’s true value: a 67-acre parcel at nearby (sort of) Aqueduct Park that was leased to a video lottery terminal company starting in 2010. Oder shows all his math in his own post, but let’s cut to the final numbers that count here:

Aqueduct: $189,055 per acre each year

Belmont: $18,984 per acre each year

So the Islanders owners’ consortium will be pay almost precisely one-tenth per acre what racetrack land on the other side of Queens went for seven years ago. That’s not enough to definitively say “Islanders should be paying ten times as much for arena land as they are” or anything, but the more data points we get here, the more we can say that this proposed lease looks real bad for taxpayers, man. And that’s before even getting to those Long Island Railroad costs.

7 comments on “Islanders to pay one-tenth as much per acre for Belmont arena as Aqueduct land goes for

  1. It’s public land. Charging a casino 10x as much as a sports venue operator sounds about right.

    • Why? They are both private businesses.

      The only difference between them is that one is a giant waste of money that continually sucks in more and more good dollars in the endless chase for a dream that will almost certainly never happen. The other is a casino where the public got a deal on the land.

  2. When the dust settles, this will be the biggest giveaway to a NHL team in history. Thanks governor Mario.

    • Oh, it’s going to have a hard time coming close to the Coyotes deal in awfulness. Though Andrew Cuomo (not Mario) does seem to be giving it his best shot.

  3. You can’t compare a license fee to a lease. I know both are upfront payments, but that is where the similarities start and end.

    This is, by no stretch, a sweetheart deal. Sure, the state is giving the islanders use of their land, but every single person in the country had a right to bid on the property. Only 2 companies followed through, and both were of the same ilk. If this deal is as wonderful and amazing as you make it sound, why didn’t dozens or hundreds bid?

    The partners will be spending $1 billion of their own privately financed money. There is no fake part about that. Compared to some other areans and stadiums that have been built (see Suntrust Park), this is a sweetheart deal for the state.

    What are the “good dollars” that are being lost here? The improved LIRR service (that enhances infrastructure)?

    You are making it seem like the state is kicking in all this money, which is a complete and utter lie.

    Also, any land at Aqueduct should be worth more, apples to apples, than land at Belmont. Aqueduct has a fully functioning subway stop, direct from Penn Station, as well as being across the street from JFK airport, a major hub in the country.

    • I don’t know what you mean that “you can’t compare a license fee to a lease” — both the Belmont deal and the Aqueduct deal were leases.

      There were actually three bidders initially: The Islanders, NYCFC, and the Blumenfeld Development Group, the last of which pulled out at the last minute because they said they felt the bidding was rigged to preclude bids like theirs. This could just be blowing smoke because they knew they were going to lose, but since the state won’t release details of the other bids, we can’t know for sure, and also can’t know whether the Islanders were offering the best lease payments.

      The Islanders group spending $1 billion on a private development is not a $1 billion benefit for the state. In pure revenue terms, for example, while the development will generate some more hotel taxes and such from additional visitor stays (though maybe not much in property taxes, depending in what the development pays in PILOTs), it’ll also cost money for police and fire and other services. Which is the government’s job, sure, but new development is pretty close to a wash in fiscal terms.

      The problem here is opportunity cost: The Islanders are being given steeply discounted land and free rail service upgrades, and the state is getting nothing in return. If the state had put those things on the table up front, would there have been more bidders? We’ll never know, but it’s clearly a subsidy — maybe not as egregious as Suntrust Park, no, but they can’t all be world-historic disasters.