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February 26, 2009
Isles file arena paperwork, financing still hazy
It's been over a month now since the New York Islanders dropped hints they'd consider relocating if their stalled arena plan wasn't approved, and the status of owner Charles Wang's "Lighthouse Project" — so called because it used to feature a giant lighthouse in the middle of its condos-and-shopping development, though it's since replaced it with a terrible light-rock theme song — is as clear as mud. Wang issued a 6,000-page environmental report on the project on Tuesday, but told Newsday that he still hasn't figured out how he'll pay for it:
In an interview after the meeting, Wang said he has not yet obtained financing for the project. But he said he's optimistic about getting funding in increments over the 10 years the project would be built.
"How can I get funding until zoning is approved?" he said. "We are talking to a lot of banks obviously. ... If the project is good, we can get it done.
Wang said he could look to foreign countries, possibly China, for investment cash; local developer Ted Weiss called it a "virtually impossible" task, telling Newsday, "I can't imagine any bank, insurance company, pension plan or any traditional lender who's capable of doing a project of that size."
Newsday further reports that Wang is "keeping his options open" about a possible move (their words, not his). Nassau County spokesperson Bruce Nyman, asked whether Wang's scheduling of an exhibition game in Kansas City was a subtle threat to get the arena deal approved or else, replied: "I don't think it was that subtle."
The Islander situation is a total mess, and, I have long been of the opinion that they are leaving the Coliseum. I firmly believe that the one way they stay in the area, is at Atlantic Yards. Interesting enough, Al D'Amato is involved with BOTH Ratner and SMG (The managers of the Coliseum). The Coliseum situation, is not like Yankee Stadium, Citi Field, or the Orange Bowl site in Miami (In all three cases, the area around it is poor, so the land is not worth that much (Although Gateway Center will improve the value of Yankee Stadium's land)). The Coliseum, interesting enough, is the exact mid-point of Nassau County . And the real estate under it, could very much be worth billions to a future developer.
A possible plan of D'Amato's, could be to have Atlantic Yards be considered "Shovel Ready" to help with funding. Move the Nets temporarily to the Coliseum, until it is built, then move them and the Islanders to Brooklyn. Then when the economy improves, sell the Coliseum and the land to a developer (Say around 2015, when SMG's management contract expires, and the economy is better?).
Under this scenario, Wang gets Coliseum development rights in the future, Ratner gets Atlantic Yards built, and the Islanders keep their $15m a year in Cablevision money.
In my opinion, that is the only way they don't end up in Kansas City, Hamilton, Orlando, or somewhere else. Because they are not getting a new or refurbished facility in Uniondale.
The lack of a financing plan is not a problem at all. I have it on good authority that the proper way to conduct a billion dollar investment is to just approve it, then sort the payment out later.
It was esteemed financier and NHL Commissioner Gary Bettman that taught us all how these things are done:
"My guess is they'll get the financing. But let's get the approvals done so they can move forward. For anyone to suggest, 'We're not going to do the approvals; we're going to wait for the financing,' it doesn't work that way. Let's give them the green light..."
Sounds perfectly logical. The last thing you want on a project of this magnitude are details.
Posted by Thomas on February 26, 2009 12:20 PM