NY Gov. Cuomo: Yeah I’m giving the Islanders owners $75m for a train station, but they’ll repay some of it eventually, so shut yer yaps

Well, that was confusing. After conflicting reports last week that New York Gov. Andrew Cuomo was set to announce the construction of a commuter rail station for a new New York Islanders arena which was going to either cost $300 million and mostly be paid for by the public, or cost $100 million and mostly be paid for by the arena developers, the answer turned out to be … neither! Instead, Cuomo canceled his own event, and substituted an emailed press release.

The press release, at least, spelled out the finances at last:

Constructing the new full-time station on the LIRR’s Main Line and upgrading the existing spur is estimated to cost $105 million. The arena developers will cover $97 million – 92 percent of the total cost – and the State will invest $8 million.

Nice and clear! Except that the governor’s statement came with an accompanying economic impact statement by the state-run Empire State Development corporation, and that contained a different set of numbers:

The total investment in the LIRR Improvements is anticipated to be $104 million, of which $30 million is to be funded by [New York Arena Partners, the Islanders owners’ development group] and $74 million is to be funded by the State of New York.

At this point, what the actual hell, man?

State officials were tied up all afternoon with a board meeting to approve the arena plan’s final environmental impact statement — an event that drew nearly three hours of public testimony, despite only having been announced late on Friday afternoon — but thankfully, someone at Newsday finally tracked down the explanation:

To build the LIRR station, state officials said the developers will initially contribute $30 million and the state will cover the remaining $75 million. The developers will then pay back the state $67 million of that figure over time, officials said. Details of that arrangement are not yet available.

Let’s ignore for the moment the missing comma that makes it appear that state officials are building a train station with their words. In terms of who’s paying for what, the upshot appears to be that the deal for the train station — which will benefit pretty much only the privately run arena, as there’s already another existing train station just a quarter-mile away — will include an $8 million grant and a $67 million loan. And that’s a “no-interest, multidecade” loan, according to the New York Post, meaning the present value of the repayment will only be worth … well, it depends on what “multidecade” means, but if it’s a 30-year loan with evenly spaced payments, for example, the Islanders owner stand to save about $33 million from the state loan deal.

(And that’s assuming, of course, that the repayment is in actual cash, not in, say, future tax revenues that anyone would normally pay, a dodge that’s been tried in other cities before.)

That $41 million gift would then need to be added to: the land discount Cuomo has given the Islanders owners (tough to calculate because comparable giant plots of land are so hard to come by, but $74-300 million is the best guesstimate so far); any tax breaks the arena will be getting (as it’ll be on leased public land, it won’t pay property taxes, but rather payments in lieu of taxes, amounting to a $10,000 per event fee for the arena with a minimum of $1 million per year, plus payments equivalent to regular taxes for the accompanying hotel and retail project that don’t kick in for 20 and 15 years, respectively, which I have no idea how much all that adds up to); any cost overruns the state may be on the hook for (your guess is as good as mine, since nothing was specified about who’d pay these); plus the “cost of additional services that may be required to support new economic activity in the local area (e.g. police, fire, water, sewer infrastructure),” which the state study specifially noted it didn’t even try to calculate.

That is a big pile of dunno, but it’s certainly worth asking questions about. Whether those questions will be asked is another story — state senators Leroy Comrie and Anna Kaplan, the two main previous critics of the arena deal, were both quoted in Cuomo’s press release as applauding the new train station plan — but they’re the kind of thing that somebody with better data and more processing power than me should be crunching the numbers on. Also, speaking of data, did anyone try to figure whether it would be more cost-effective to just run shuttle buses from the existing Bellerose Long Island Railroad station, instead of building a whole new one a quarter-mile away that will still require shuttle buses to the arena? And who’s going to pay to run those shuttle buses, anyway?

I’m starting to see why Gov. Cuomo decided not to subject himself to a press conference. More news hopefully later today, once I hear back from all the sources who didn’t return my calls yesterday afternoon. In the meantime, let’s all just enjoy the fresh vaportecture the governor’s office dropped on us, complete with a woman walking her child dangerously close to the edge of the tracks and what looks like an ad for what would have to be Billy Joel’s 73rd birthday tour, or maybe a show by Belly Jolie, the Angelina Jolie-Tanya Donnelly supergroup:

UPDATE: I’ve now talked to some state officials for this Gothamist article, and can answer a few of the above questions, and confirm that others have no answer as of yet:

  • The 30-year no-interest loan is confirmed by ESD officials, though they deny that it should be considered a no-interest loan, saying it’s just the state fronting $67 million and then the developers paying the state $67 million over 30 years with no interest, which is obviously a different thing entirely. So my $41 million subsidy estimate above stands, though state officials would clearly complain that they don’t consider it a subsidy.
  • The land lease is now for $50 million, not $40 million, and would go partly to cover some of the state’s LIRR station costs ($30 million) and partly for other unspecified infrastructure ($20 million). ESD argues that this means the state would come out ahead, which only works if 1) $30 million is more than $41 million and 2) you’re okay with the fair-market value of the land being $0.
  • Speaking of which, that appraisal that ESD was supposed to do by now? They’re checking to see if it’s still happening.
  • Also unknown, according to ESD: whether anyone looked at running shuttle buses from the existing Bellerose station as an alternative to building a whole new one 1300 feet away.
  • The developer will pay for the shuttle buses, hooray!
  • Nobody knows yet who’ll pay for cost overruns, boo!
  • The state doesn’t know how much the PILOT tax breaks will be worth, but also doesn’t agree that they’re tax breaks!

I think that’s it. I’ll try to calculate the total subsidy value of this at some point, but right now all the known unknowns are making my head a splode. Hand it to Cuomo for this: He learned from Atlantic Yards that the best way to stop people from talking about your spendthrift ways is to make the money trail too confusing to sum up in a single number.


20 comments on “NY Gov. Cuomo: Yeah I’m giving the Islanders owners $75m for a train station, but they’ll repay some of it eventually, so shut yer yaps

  1. It’s seems more about the campaign money going to Cuomo than anything else.

    https://nypost.com/2019/07/08/cuomo-promises-new-railroad-station-at-belmont-park

  2. You’re a fucking moron. The arena is happening you bum, learn to read full reports and articles before fabricating lies.

    • Well, that convinced me!

      I’m in agreement that the arena is probably happening, though — as I noted above, Comrie and Kaplan were the two most prominent holdouts, and they both seem to be on board now. (I’ve reached out to their offices to confirm that they’re satisfied with the plan as it stands, but haven’t heard back yet.)

      • Kaplan’s office got back to me, essentially said this was the last major hurdle for the project. See quote at the end of the above-linked Gothamist article.

    • This really is a powerful and cogent argument, and one that certainly illuminates the logic that underlies public funding for private sports projects.

      Although, one point of usage: I believe the phrasing is not “you bum,” but “ya bum.”

      • The part I liked was the improper use of syntax which suggested that it would be ok to fabricate lies but only AFTER reading all reports and articles.

        • I especially liked “this website will never succeed” in the name field, when it’s probably been around since before the poster started losing his baby teeth.

  3. Please correct me if I am wrong but to get to Bellerose station, doesn’t someone from Nassau or Suffolk county (where the Islanders fan base is) have to go take a train to Woodside first? As I understand it, if you use the northern or Ronkonhoma (but not Babylon) lines, the new station will have direct train station service. Would the times be significantly different with the new station versus the Woodside to Bellerose commute?

    Of course there should be full disclosure on who is paying for what and cross-check of economic benefits vs quality of life in Bellerose (it would be nice if the Islanders owners move there).

    Regarding whether Cuomo is a cheap date, isn’t there a character in “All the King’s Men” who says the more Willie Stark squarks about how clean he is, the higher his price?

    • Bellerose is on the Main line. But it only services the Hempstead branch. You would need to go into Queens and change at Jamaica coming from the Main line LIRR.

      Or the LIRR could just stop at Bellerose on event days.

      • I am all for the Arena ( as an Islander fan). But to be honest, the train station is not needed. If Cuomo wanted the most economic method, Islander owners and Long Island Bus could have ran shuttle busses from Floral Park. Why Floral Park? During rush hours, the Main Line stops at Floral Park ( the Station before Bellerose) so all they have to do is add extra stops there. Not to mention that because of it’s layout, Floral Park does not affect local homeowners as much as Bellerose. But the extra train station was not done for economic reasons, it was done to get Comrie and Kaplan “On Board” and make sure anorher Amazon Long Island City debacle is not repeated.

        • When I commuted I never remember stopping at Floral Park but a good point you have — the platform is already in the right configuration. At Bellerose they would need a new platform or a better switch while a new station is needed at Elmont.

          But I would like tickets to that Billy Joel concert.

          • Floral Park Station is open for the Huntington Branch ( NOT the Ronkonkoma part if the Main Line) AM & PM rush hours. I have made many a trip to and from Westbury Station and trains do stop there at those times.

  4. I don’t understand why the Islanders would need a new arena. Now that it is commonly understood that teams create additional wealth by moving part time to other cities, clearly the Islanders only path to financial success is to split their home games between Brooklyn, Nassau County, Quebec and Tucson (Glendale still needs a local rival, Gary).

    The arena glut in what we outsiders laughingly refer to as “New York” is already a problem. Is Belmont far enough from all the others that this will not make the problem worse?

    Are concert performers likely to hit MSG, Atlantic Yards and other facilities? Do they go to Newark now? Or the old Coliseum?

    Who – if anyone – loses out when another arena pops into existence thanks to taxpayer largesse?

    • Elmont is not far from Uniondale ( Nassau Coliseum)), in fact BOTH are on Hempstead Turnpike. One thing that is not discussed about this deal is the effect on horse racing and land. 1: At Belmont there are gates that are only used one day a year ( Belmont Stakes Day), so at least the land can be better used then it is today. 2: Another aspect to this is renovating Belmont Park ( including winterizing the track so they can run winter racing there). Why is this important? It will allow NY State to eventually shut down Aquaduct ( Maybe within 5 years). Why is this important? Aquaduct is one of if( not the largest) piece if undeveloped land in NYC. I know they have the casino there, but 210 acres in NYC and near JFK airport? I can only imagine how much it would be worth to developers.

    • Islanders fans, who are largely based to the east in Nassau and Suffolk counties, HATE Barclays in Brooklyn. It was built only for basketball so there are many obstructed seats. The scoreboard isn’t centered over mid-ice and there is an SUV in one corner.
      While it is easily accessible by train and subway, many fans complain of the lack of parking. Why
      people on a mid-January night want to stand by a charcoal grill cooking hamburgers and drinking beer
      is beyond me but they do.
      Many fans love the Nassau Coliseum (NYCB Live or some such name). Great sightlines although very crowded in the concourse during intermission. But the NHL hates it because it is small (13,000 or so) and with very few luxury boxes.
      Concerts I wonder about since it seems there are relatively few in Nassau Coliseum and sure to drop with a larger arena a few miles west. The old Coliseum (it was remodeled and seats taken out a few years ago) wasn’t doing much concert business. I would guess Nassau loses out (they have minor league Nets basketball) although they are owned by the same people who own Barclays.
      Don’t really know much about concert business but I remember a few years ago in a rare sober moment Ozzy Osbourne commented you only play Madison Square Garden for prestige; labor cost and other things are high.
      Keep in mind while the Islanders are “New York” and the Devils are close, the media will almost exclusively concentrate on the Rangers as it is in Manhattan. All three hockey teams are broadcast on the network which is owned by the people who own the Rangers and Knicks so the Devils and Islanders are step-children on their own broadcast outlet.
      Do the Islanders “need” a new arena? Depends on what the lease is, I suppose. The story that pre-2015 when they were in the old Nassau Coliseum, they had such a poor lease they could go to the Stanley Cup final, sell out every game all season and still lose money. Which is why they tried so long to develop the mostly empty land around (an Air force base until 1962) but ran into opposition opposed to more development “skyscrapers casting shadows over three counties” from people in a highly developed suburban area with traffic jams.
      If anyone disagrees with this, please correct in a polite manner.

      • I suspect a lot of this arena plan has to do with the upcoming fight to the death among the few remaining concert promoters. Oak View Group, which Tim Leiweke started after leaving AEG, is one of the Islanders’ partners, and those two companies and Live Nation are competing to be the last promoter standing once this all shakes out. (Though more likely everyone involved will end up getting bought by Disney or Amazon.)

        This is actually kinda good news in one way, in that it means local governments can drive a harder bargain because arena managers are more desperate to stake a claim with more buildings of their own. It’s bad news in that we’re likely to end up with a lot of shuttered arenas in a decade or so, but at least that’ll be good news for Billy Joel when he goes to negotiate rates for his 80th birthday tour.

        • I’ve always found it odd that the gov’t (s) of Egypt didn’t destroy the two lesser pyramids in order to make the great one even greater, and infinitely more valuable.

          I guess they just don’t understand capitalism and supply management the way we do.

          • Egypt didn’t run into a surplus of pyramids for the number of mummies available.

Leave a Reply

Your email address will not be published. Required fields are marked *.
NOTE: Both personal attacks on other commenters and trolling (posting inflammatory remarks solely to start a fight) are not allowed in comments, and will be deleted. Any commenters who repeatedly ignore these rules may be placed on moderation, or banned.

HTML tags are not allowed.

786,537 Spambots Blocked by Simple Comments