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June 23, 2011

New plan to replace Nassau Coliseum touted as a win-win, must be approved by residents, but questions linger

Atlantic Yards Report

So, it looks like the Islanders--who couldn't fit into the Barclays Center, which can't accommodate major league hockey--might get a new arena, according to this press release:

Uniondale, NY - Nassau County Executive Edward P. Mangano today announced an important step in creating a state-of-the-art sports-entertainment destination center at the Hub in Nassau County. Joined by New York Islanders owner Charles Wang, County Executive Mangano announced that the County has reached a lease agreement that retains Long Island’s only major professional sports team in Nassau County through 2045 should residents approve building a new arena at the site of Nassau Veterans Memorial Coliseum. According to an independent economic impact analysis conducted by Camoin Associates, a nationally recognized firm in public and private sector economic development, the agreement will generate $1.2 billion. This revenue will be used to pay off the $350 million in construction costs associated with the new arena, $433 million in debt service payments and provide an additional $403 million for the County to hold the line on property taxes. Furthermore, Camoin Associates estimates the creation of 1,515 new jobs during the arena construction phase and the creation of 3,040 permanent jobs beginning in the first year the arena is operational.

Words of caution

Is this a good deal? Well, Neil deMause of Field of Schemes wrote about this 5/12/11:

So who exactly would be paying off the bonds? As noted above, Mangano wasn't exactly saying. "Revenue from the sales tax generated by the new arena" sure sounds like a STIF [Sales Tax Increment Financing], though, which is an extremely dangerous funding method given that 1) you could just end up cannibalizing existing sales tax receipts and 2) there's always the danger that if the economy slumps, sales tax receipts will go down, and then you end up having to dip into the general fund to make the bond payments. The Nassau Interim Finance Authority, which took over the county's finances in January, seems to agree, issuing a statement that it's "deeply concerned" about the arena plan and its "fiscal implications for the county."

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Posted by eric at June 23, 2011 11:27 AM