New York state didn’t study value of arena land before selling it to Islanders at cut-rate price

Hey, remember back when I did some quick-and-dirty estimates that showed that the New York Islanders were getting a hugely discounted deal from New York state on land for their new arena, and then Norman Oder of Atlantic Yards Report did his own estimates that came up with similar numbers? I finally got my Freedom of Information Law request back from the state-run Empire State Development agency, and as I write for this morning’s Village Voice, it turns out that the state never bothered to even do as much as Norman and I did to see if $40 million was a reasonable price for the land or a massive public giveaway:

In response to a Voice Freedom of Information Law request for any land value assessments provided by or to ESD for either the Islanders plot or any neighboring parcels, the agency has replied: “Please be advised ESD has no record responsive to your request.” In other words, Cuomo’s development agency has agreed to lease a prime piece of development land to a consortium of sports developers — and didn’t even check to see how much it could charge in rent for the public property.

The best way to guess at land value, according to property experts, at least when you’re looking at a unique parcel like a giant chunk of state-owned (so not subject to local zoning) racetrack parking lot land, is to look at per-square-foot prices for other vacant land in the vicinity. That method currently comes up with a value of New York state’s giveaway to the Islanders of between $74 million to $300 million — this at a time when the state is grappling with a $4 billion budget deficit. State senator Liz Krueger, who has annually introduced a bill to require improved reporting on all state corporate subsidies, told me she finds it “disturbing” that the state “would go into a 49-year lease with no evaluation of equivalent land lease or sale deals in the same area/county.” I asked ESD for a reason why the agency didn’t do any due diligence in this case, and didn’t hear back; if I get a belated response, I’ll update both here and at the Voice site.

7 comments on “New York state didn’t study value of arena land before selling it to Islanders at cut-rate price

  1. I do not think that this was such a bad deal. Why? 1: The area that the Islanders are building on is a parking lot that with the exception of Belmont Stakes Day was essentially unused for half a century. The $$$$$$$$$$ that is spent by the Islanders can go into improving Belmont Park (lighting and winterizing the track come to mind). 2: It is very difficult to get major investment in Elmont. Basically the only areas in Nassau County worse then Elmont are Roosevelt and Freeport Area Code 11580 (North of Atlantic Ave). ps. I know Hempstead and Uniondale are not great but you still have Hofstra University.

  2. The problem is the people involved in development generally see there job as spending assets (land in this case) and putting up buildings, not getting a good bang for their buck.

    As long as something, anything happens, their stakeholders mostly don’t look too closely. It is a disgusting industry really.