NY state board to give final signoff to Islanders arena plan today, still has no idea how much state’s land is worth (UPDATED)

New York’s state-run Empire State Development corporation board is holding its final approval vote on an Islanders arena development plan at Belmont Park today at 3 pm, which reminds me of something:

An ESD spokesperson contacted the Voice after publication to say that in according with its guidelines and state law, the agency will conduct an appraisal of the Islanders arena project land before the project is presented to the ESD board of directors following the conclusion of the environmental review in 2019.

An ESD spokesperson confirmed to me two weeks ago that the appraisal “will be completed by the time the General Project Plan is approved by the ESD Board.” So, they have four hours left — hope the ESD board members can read complicated land value assessments really fast!

The appraisal is important because the Islanders owners are only paying $50 million for 43 acres of state land for the project, a figure that could be as much as a $300 million discount on the land’s actual value. Or it could not! Land appraisals are hard, which is why it’s important to hire trained professionals to conduct them, well before you have to decide on whether a sale of public land is a fair deal or a complete giveaway!

(It’s maybe worth noting that the state most recently has been saying that the $50 million is really the developers’ private contribution toward a new train station for the project, which would make the actual land sale price be $0. If “actual” has any meaning here anymore.)

I emailed my ESD contact again this morning to ask to see the appraisal, but haven’t heard back. It’s altogether possible the report will appear just in time for the hearing — but that certainly won’t give any time for anyone on the board to read the report before voting, let alone members of the public.

If so, it would be only the latest in a long line of, shall we say, not enthusiastically democratic steps taken by the state in its rush to approve the Islanders plan after a year and a half of mostly behind-closed-doors talks: The initial ESD board meeting last month was held on a Monday afternoon after public notice only went out late Friday; and the Public Authorities Control Board, which is supposed to vet actions by public authorities like ESD, went ahead and gave its approval to the plan last week, despite all the final details not being in yet. Whether the final Islanders deal turns out to be a massive public money pit or not too bad, it looks like we won’t know for sure until after the deal has been decided — the phrase “no way to run a railroad” comes to mind.

UPDATE: The ESD board meeting materials have been posted, and they include two separate appraisals — one dated December 3, 2018, the other July 3, 2019 — that estimate the public land value at between $35.9 million and $41 million. The first provides no information about its methodology at all; the second says it bases its figure on the future income that the site could produce, but says nothing about how it calculated that projected income. Lots of questions here, obviously, which will almost certainly take more than (checks clock) three hours and 10 minutes to answer.


12 comments on “NY state board to give final signoff to Islanders arena plan today, still has no idea how much state’s land is worth (UPDATED)

  1. What is the potential impact of any remaining Agent Orange in the soil at the proposed Elmont Long Island Rail Road station to be located in Bellrose Terrace for the future Belmont Islanders Arena? During the 1970’s Agent Orange was sprayed on LIRR right of ways. Was it used at this site? How many weeks or months would be needed to complete this research? Did the Empire State Development Corporation look into this issue as part of the New York State Environmental Quality Review Act (SEQRA) under the Environmental Impact Statement process? If not, will they issue an addendum to the proposed draft Belmont Arena EIS, which was previously released? What role will the federal Environmental Protection Agency, NYS Department of Environmental Conservation and any other regulatory or permitting agencies play? If so, how long will this process take? According to the ESDC spokesperson conducting a recent public outreach meeting with residents of Bellrose Terrace on July 31, he stated that “prior to start of construction at the Elmont LIRR station, test soil borings would be performed to check on the status of any Agent Orange.” Why would you not conduct test soil borings as part of the environmental review process, prior to issuing a formal environmental finding documenting no significant adverse project impacts rather than afterwards? Perhaps the spokesperson had an incorrect understanding of how a proper state or federal environmental review process is supposed to be conducted and concluded.
    If Agent Orange is found in the soil at the proposed Elmont LIRR Station site, there are new questions to deal with. How long will it take to safely remove any contaminated soil? Based upon my experience in the transit industry, this could take several weeks to months depending upon the levels and amounts of contaminated soil found. Could this impact delaying completion for the east bound south side platform of the station within the next 27 months as promised by EDC, MTA & LIRR in time to coincide with the Islanders Belmont Arena October 2021 opening? What about the overpass and west bound north side platform by 2023? Was the cost to deal with potential Agent Orange site contamination included within the proposed $105 million dollar budget? Remember neither Governor Cuomo, ESDC, MTA or LIRR have yet to make public details of the project budget, procurement strategy, LIRR force account plan (their own employees), track outage plan and detailed construction schedule to validate both the $105 million cost and project completion plans from start to finish to coincide with the Islanders Belmont Arena opening 27 months away. Who will pay for and how much will the cost be for soil remediation work, including test site soil borings be?
    In January 2018, former MTA Chairman Joe Lhota informed the Empire State Development Corporation that there is no current Penn Station capacity to support new Belmont Park service. He said that his agency must first perform a planning study. The study started in July with a promised completion date by end of September 2018. Why the eleven month delay in making it public? They have yet to even make a presentation to the monthly LIRR or full MTA Committee Board meetings. The MTA has never publically committed to a new schedule and date for release of the study. What happened to open transparency promised by Governor Cuomo for all state agencies and public authorities including ESDC, MTA and LIRR? Is there something within the study contents they want to continue to hide from commuters, taxpayers and elected officials? Governor Cuomo promised to conduct the most transparent and open administration in the history of state government. This should apply to any capital project, environmental review or planning study managed by ESDC, MTA or LIRR, Concerned residents, commuters, taxpayers and local elected officials deserve sufficient answers to these most reasonable concerns before any construction begins on the Belmont Islanders Arena and accompanying transportation projects, such as the new Elmont LIRR Station..

    Anyone in the transit industry knows that customers being asked to pay a premium fare always prefer a one seat ride. This is what is provided for most who attend events at Madison Square Garden or the Brooklyn Barclays Center. Why would any Islanders fan coming from Nassau or Suffolk County want to first drive to a local LIRR station, park their car, board the LIRR (and in some cases have to switch at Huntington. Mineola, Babylon or Ronkonkoma from a diesel to electric train) then board a shuttle bus from the new Elmont LIRR station west bound north platform which will not open until 2023. Who knows if the east bound south platform will be completed in time to coincide with the Islanders Arena October 2021 promised opening date.

    Babylon, Speonk, West Hempstead, Long Beach and Far Rockaway branch riders will always have to change at Jamaica (walk up the stairs, take an escalator or elevator from platform levels serving tracks one, two or three to the mezzanine level. Next walk across the mezzanine and down the stairs, escalator or elevator to tracks 7 or 8. Then they will have to wait for the next east bound train to reach the new Elmont Station followed by boarding a shuttle bus to reach the Arena. Port Jefferson, Huntington, Oyster Bay and Ronkonkoma branch riders will have to do the same until the Elmont Station west bound platform and overpass are completed. Port Washington branch riders have the added pleasure of an additional transfer at Woodside. As a result, I predict 95% or more of those attending Islanders games, rock concerts or other events will elect to drive or take a car service.

    (Larry Penner is a transportation historian, writer and advocate who previously worked 31 years for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island and Metro North Rail Roads, MTA Bus, NYC Department of Transportation along with 30 other transit agencies in NY & NJ).

    • Larry… why wouldn’t folks changing at Jamaica just take one of the two trains already slated to go to the existing Belmont Park station on event days?

  2. I admit to being an Islander Fan who does not want my team in Quebec City, Houston or anywhere but Long Island, but what is forgotten about this deal is how much land is currently wasted at Belmont Park ( especially the parking gates on the East Bound side of Hempstead Turnpike). Not to mention the planned upgrades at Belmont Park ( including winterizing the track so that Aquaduct can eventually be closed down, and either sold to developers, used for housing, parks or some other use that us better then today). This deal can not only keep the Islanders here, but be good for racing, but Nassau County and the City of New York.

  3. The appraisal of the land is important because ESD’s fee for the Project is a percentage (I believe 0.5%) of four items:

    1. The current fair market value of the land to be used for the project (based on current assessed valuation and considering the equalization rate);

    2. The cost of supplying or installing utility services such as sewer, water, gas and electricity;

    3. The cost for site preparation which includes clearing, grubbing, grading and drainage; and,

    4. The cost for labor and materials for construction of the facility, not including equipment costs.

    For fee calculation purposes, equipment is anything that is removable or not integrally part of the structure.

  4. I was about to post something along the lines of “reading the entire valuation report(s) might not be necessary assuming actual professional appraisers are retained to do the appraisal(s)”… the idea being that professional appraisers would list a range of completely defensible numbers for the property.

    But then this: ($36-41m based on potential income).

    Well, appraising a developed property based on it’s revenue generating ability is certainly reasonable. Hotels and apartment buildings are routinely assessed this way, as are some commercial structures.

    But it’s not a viable method of determining the FMV of largely vacant land (you will recall that several years ago Lew Wolff decided he could pay for an MLS stadium by purchasing land zoned industrial from San Jose and then having them rezone it for housing, then building and selling housing at a profit… so the value of unused land in an urban setting is highly variable, of course).

    It is more or less impossible to use the income method of assessment or valuation on vacant (non farm) land. You need to know what the zoning will be and what will be built there before you can estimate the land’s proper FMV. If you are basing the valuation on the intended use (arena), then you aren’t assessing the value of the land to it’s current owner in it’s current state, much less it’s value under highest and best use (which could be commercial, residential, etc).

    While tax assessments are different animal entirely, it is worth noting that undeveloped properties in metro centres are generally assessed based on their highest and best use, not their current status. So a surface parking lot in the middle of Manhattan would be assessed at the same land (but not building) value as the condo or office towers surrounding it.

    It is hard to imagine that that parcel of land at Belmont Park is worth ‘just’ $35m, isn’t it?

    Using this as a baseline, how little is central park worth? I mean, it makes very little income, right…

    • Right, the key question here is what use they projected for the land, since it could be used for all kinds of things. (An arena and surrounding hotel/retail development, for example!) But that wasn’t included in the board docs.

  5. This just in: I heard back from the ESD spokesperson, who said, “If you’re looking for additional docs you are always welcome to FOIL.”

    A Freedom of Information Law request is typically filled in around 2-3 months. The final vote is in an hour and 20 minutes.