May 12, 2010
Mets "talking" with Islanders, MLS about Queens move
More rumors of rumors, but: New York Mets owner Fred Wilpon tells Newsday (via its new sister publication Gothamist, since Newsday has hidden all its articles behind a $5/week paywall) that he's "had conversations with Islanders owner Charles [Wang] and we've talked about Queens," and that he's also talked to MLS commissioner Don Garber about a soccer stadium, though "we probably can't do both."
Any hockey or soccer venue would presumably be built in the Citi Field parking lot, though Willets Point is always a possibility as well if New York City follows through with its redevelopment plans. The bigger question — who would pay for it — Wilpon and Newsday left undiscussed.
If nothing else, anyway, this gives Wang some added leverage on his move threats to kick Nassau County into approving his plans there. And who knows, maybe Wilpon is just doing his fellow owner a favor by tossing out some red meat to the tabloids — though right now it's not like his team doesn't have its own ways to get itself into the paper.
December 04, 2009
Nets naming-rights deal cut in half
Remember that record-breaking $20 million a year naming-rights deal that Barclays Bank signed for the New Jersey Nets' new Brooklyn arena almost three years ago? Turns out the real number is only a little over $10 million. The New York Observer's Eliot Brown, who pored over the 772-page arena financing document released last week by Goldman Sachs, reports:
According to documents related to the arena's financing that were released Thursday, Barclays will pay $10 million a year to the arena's owner for the 20-year deal. Looking solely at this, it would seem to make it a half-off discount, but there are a number of other untold fees paid directly to the Nets as part of the naming rights, according to the documents. Forest City Ratner declined to provide those numbers, and a spokesman for Barclays declined to comment. ...
Whatever the fees paid directly to the team, it's hard to think that they're twice $10 million a year. After all, a consultant's study attached to the documents refers repeatedly to the transaction as a $200 million naming rights deal, and uses that number as a basis of comparison for other naming rights deals.
If there was indeed a revision, it came either at the end of 2008 or earlier this year. The original 2007 contract expired at the end of 2008, but was extended after Barclays and Mr. Ratner's firm, Forest City Ratner, renegotiated. At that time, new terms were not released, though Barclays released a statement saying it was "unwavering in its commitment" to the project. The financial documents released now say the deal was again amended in August 2009.
This only makes the Brooklyn arena deal look worse for developer and Nets owner Bruce Ratner, who's already had to agree to sell off a large share of the team and arena to raise capital, and is looking at possibly $60 million a year in bond payments, plus up-front cash costs.
The Goldman Sachs documents (downloadable here after an annoying registration requirement also reveal that using the arena for hockey is still on the table, notwithstanding that the latest arena design would be too small for the NHL: "The New York Islanders could potentially become a tenant of the proposed arena as well... If built as planned, the arena would need to be retrofitted to accommodate the ice-making abilities the NHL requires for its franchises." In other words, more money to add to the arena's already $1.1 billion price tag.
Meanwhile, Ratner got more bad news yesterday, albeit in an oblique form: A New York state court yesterday ruled that the state can't use eminent domain to take property for an expansion of Columbia University, stating the declaration that the land was blighted was unconstitutional because the state had "failed to adopt, retain or promulgate any regulation or written standard for the finding of blight." While it's unlikely this will be enough to overturn last month's eminent domain approval for Atlantic Yards, it certainly casts some uncertainty on the project right when Ratner and friends are trying to obtain bond insurance, set interest rates, and sell bonds, all processes that shudder at uncertainty. You know that's what Matthew Brinkerhoff, lawyer for the Atlantic Yards opponents, was thinking when he declared yesterday, "If I was involved in the bond sale, I would be looking at this decision and it would concern me, in a way that is very unexpected." Was that the sound of a few extra basis points I just heard?
October 05, 2009
Wang unleashes Islanders move threat
Sure enough, the New York Islanders arena situation blew up big-time over the weekend, with team owner Charles Wang announcing that since no deal was in place by the time of Saturday's season opener, management planned to "explore all our options," including moving the team out of Long Island.
The center of the dispute is over getting zoning approval from the tiny town of Hempstead for Wang's multi-billion-dollar Lighthouse development project, which would include a rebuilt Nassau Coliseum for the Islanders. Wang contends that Hempstead officials are dragging their feet on giving approvals for the project, which has been in the works for years; Hempstead supervisors retort that they're still waiting for answers from Wang about what exactly the project would entail. In the latest twist, supervisor Kate Murray called Wang on Friday asking for a meeting to discuss the project, Wang told her it was too late for discussions, Murray passed this on to Newsday, and Wang declared that now he felt he couldn't trust Murray: "I don't want to say you can't, but it's difficult."
As to where else the Islanders might go, that's an excellent question: You may recall that the NHL is already looking at having one franchise in search of a home. A league source insisted to Fanhouse that six suitors were ready to woo the Islanders, but named only two: Kansas City and the New York City borough of Queens. Queens doesn't have an arena, though, and as we've discussed here, Kansas City's arena is run by AEG, which has an incentive not to offer a sweetheart deal to get a team to relocate.
And before anyone asks: The Atlantic Yards arena in Brooklyn has been "value engineered" to have too small a floor for a hockey rink. So that ain't happening either, not without Bruce Ratner finding more money under the sofa cushions.
October 02, 2009
Islanders sign long-term lease, immediately threaten to move
The New York Islanders' long-simmering Lighthouse project (no actual lighthouses included) looks ready to blow up again. Yesterday, Isles owner Charles Wang and Nassau County Executive Tom Suozzi agreed to a long-term lease that would keep the team at a renovated Nassau Coliseum through 2030 — then Wang turned around and said he was cutting off talks unless the development project was immediately approved: "This is not the point to start negotiating anything. It's yes or no."
The threat was levied at the Hempstead town board, which has yet to agree to zoning changes to allow Wang and partner Scott Rechler to build the $3.8 billion Lighthouse project, which would include a hotel, office buildings, and a convention center, on what's currently public land around the arena. (Under the new lease, Wang would spend $320 million of his own money to renovate Nassau Coliseum, plus pay $1.5 million in rent, but would get to lease 77 acres of county-owned land for $1.) Wang has given the town board until tomorrow to approve the zoning, and fumed that if the board didn't vote by then — something that seems all but certain, since it doesn't have any meetings scheduled today or tomorrow — he "would construe that as a no." This could be a very interesting weekend.
September 29, 2009
Is the Sprint Center really making money?
The Wichita Eagle looks at a report in the Kansas City Star (by our old friend Kevin Collison) that that city's new Sprint Center is making money, and wonders whether that might be good news for Wichita's soon-to-open Intrust Bank Arena, NCAAs or no NCAAs.
Only one problem: While the Sprint Center is indeed turning a profit, that's only an operational profit — in other words, it doesn't count the cost of paying for building it in the first place. Kansas City essentially handed over the building to arena managers AEG after it was complete, and told them to deal with the expense of running the place and allowed them to keep most of the proceeds; the fact that K.C. will see any money at all, in fact (estimated at $1.8 million this year), is an indication that AEG is doing a good job, since according to its lease it doesn't need to share any profits at all with the city until it's making a 16% return itself. Given that K.C. is on the hook for $10-15 million a year in arena bond payments (guesstimating here — that information doesn't seem to be online anywhere [UPDATE: It is now, and I was — ahem — on the money]), there's almost no way it will actually turn a profit on building the Sprint Center.
That said, it's still better for AEG to be running a profit than running a loss, especially since the Sprint Center still doesn't have a major-league sports tenant. And AEG seems to be intent on using its success with concerts to drive a hard bargain with any sports teams looking to move to Kansas City: AEG president Tim Leiweke told the Star, "The economic model of this building is quite successful. The last thing we or the city want to do is throw away that model and make the arena a loss leader with another tenant. It's a tougher scenario with a professional team. I'm sure we wouldn't be able to write a check to the city for $1.8 million." In other words: As predicted, they're not going to be no pushovers for, say, the Islanders.
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."
February 12, 2009
KC official: My niece knows a guy who knows a guy who knows the Islanders
The alt-weekly Pitch in Kansas City has video of city manager Wayne Cauthen being asked about when KC's almost-two-year-old Sprint Center might get an NBA or NHL team to play in it. Cauthen, after first quipping that he "niece works for the New Jersey Nets" (at least, the audience laughs like it's a quip), says that "there is some discussion going on with the Islanders - they have a little situation with their facility. I don't see any city building new arenas right now." Cue the 72-point type!
Also featured in the Pitch article: a bunch of quotes from yours truly, including, "You don't leave New York for Kansas City"; discussion of the fact that AEG, which controls the arena rights, won't be eager to give a team a sweetheart lease deal the same way a city might; and speculation that the New Orleans Hornets are one team for which a move to Kansas City might actually represent an upgrade: "You can say, OK, we have an arena and you'd have to pay us some rent but at least you wouldn't be in a city that's lost half of its population." I only hope I didn't give anybody any ideas...
January 19, 2009
Newsday writer: I love the smell of move threats in the morning
I don't even know what to say about this:
Good for the Islanders for finally standing up for themselves and taking a public stand... At a time when NHL commissioner Gary Bettman had no problem playing the role of the bad guy, urging the Town of Hempstead to move this along, owner Charles Wang sat on the sideline, remaining quiet.
Some praised him for refusing to play the game of public threats, of refusing to scare Islanders fans by threatening to move, but at the same time there's something to be said about saying enough is enough. We all know the Islanders have no future here if something isn't done about Nassau Coliseum. So remaining quiet while nothing was happening with his submitted plans could only last for so long.
That's Newsday sports columnist Jim Baumbach, weighing in on how the Islanders scheduling an exhibition game in Kansas City to get everyone freaked that the team will move there is refreshingly direct. You'd almost think he worked for an NHL owner - oh, wait....
January 16, 2009
Islanders next contestant on "Who's Threatening to Move to K.C.?"
It's now been almost five years since Kansas City announced plans to build a hockey arena without an actual hockey team to play in it. As I wrote at the time:
That sound you just heard was the ka-ching! of cash registers in the souls of NHL owners, smelling a move threat to wave in the faces of local elected officials come August.
The Pittsburgh Penguins already cashed in on that threat, and now it looks like it's the New York Islanders' turn. From TSN:
The Islanders have agreed in principle with the Los Angeles Kings to play an exhibition game in Kansas City in September.
This may not seem like that big of a deal in light of the fact other NHL teams have used Kansas City in recent years as a neutral cite for preseason games.
However, according to league sources this game could be perceived as a veiled threat of potential relocation if plans for a new arena on Long Island aren't soon finalized.
According to "league sources," huh? You mean the same league that has a vested interest in getting teams' hometowns to build them new arenas, by dropping hints that the team will move without one, if necessary? The same league whose commissioner, Gary Bettman, said on the radio Thursday of the Islanders' home, Nassau Coliseum, "That building has to be replaced. And if I were [Isles owner] Charles Wang, I wouldn't sign an extension on that building for a new lease under any circumstances"?
But I'm sure that's all just a coincidence.