Drawing a Line in the Sand

Earlier this afternoon, County Executive Tom Suozzi (pictured, flanked by Legislators Diane Yatauro and Wayne Wink, and Lighthouse principals Charles Wang and Scott Rechler), announced the signing of a 99-year ground lease on the 77-acre County-owned Coliseum property with the Lighthouse Development Group. The announcement was filled with a lot of drama, a firm line in the sand, and even a little news.

Other people can mention direct quotes, and I don't want to re-do their work. I'll just share some key themes and take-aways.

Lease Terms

The Town of Hempstead, which, as you remember, made some requests of the County and the developer, did not get all it wanted, but there were pieces in there that satisfied many of the Town's wishes. The terms are as follows:

• 99-year ground lease between the Lighthouse Development Group and Nassau County. This covers the 77 acres of County-owned land on which the Coliseum sits, not the other 73 acres of Rexcorp-owned land that Scott Rechler added to the project.
• The Lighthouse commits $50 million to improve area infrastructure
• The Lighthouse will pay Nassau County $1.5 million per year as part of the ground lease
• The Lighthouse will assume maintenance costs on Nassau Coliseum, on which the County currently loses $1.5 million a year. Before sales and income tax, this comes out to a net positive of $3 million for Nassau County taxpayers.
• The Lighthouse commits to a Project Labor Agreement with local labor unions that will pay a prevailing wage
• The Islanders commit to remain in a renovated Nassau Coliseum through 2030, 5 years later than the original plan.

The Town of Hempstead is not a third-party beneficiary of the lease. Marilyn Gottlieb, Deputy County Executive who has overseen this process for Mr. Suozzi, told me that the County, as policy, does not do this for anybody.

The "Out Clause"

County Executive Suozzi said that he would submit the lease to the County Legislature immediately, and this could become an issue should environmental review continue to drag on. As previously reproted, the Islanders are able to void the lease and leave the area if it is not approved by the legislature within 120 days - let's hope it doesn't come to that.

Vision for "New Suburbia"

The County Executive touted the Lighthouse Project as his centerpiece for "new suburbia," which he unveiled last week as part of the 90/10 solution. The solution calls for 90% of Nassau County to stay exactly as it is, with the other 10% re-imagined in ways that address very real problems such as property taxes, traffic, pockets of poverty, and the flight of young people. The Lighthouse would be a great first step in realizing that vision.

Empire Zone

In a surprise development, especially since Gov David Paterson refused to make the commitment in August, Tom Suozzi announced that the proposed Lighthouse site has been designated an Empire Zone by the State. This makes the Lighthouse developers eligible for tax credits at the State level, while ensuring that the local tax obligations are met in full. This is not unheard of; the State routinely designates sites of large developments (or large skyscrapers in the city) Empire Zones because they encourage organizations to do business within the state.

The County Executive also mentioned that the Lighthouse is eligible for tax credits through the Nassau County Industrial Development Agency, a group that routinely provides incentives for companies to do business in Nassau County.

These announcements fly in the face of the Town of Hempstead's prior request that the Lighthouse not seek any tax abatements, a suggestion that left both Suozzi and Gottlieb incredulous. Gottlieb told me it would be foolish for the Lighthouse to not seek to participate in a program that is open to everyone. Suozzi raised his voice and practically screamed his disbelief that, given the real problems we face, the opportunity presented by the Lighthouse, and the time and money spent getting us to this point, that anyone would take offense to the government giving tax breaks.

Hard Line on Negotiations

The rhetoric against the Town of Hempstead was as sharp as it has ever been. Suozzi, Wang, and Rechler all criticized the Town, specifically Kate Murray, for refusing to come to the table at any point during the process to describe what she would like to be done at the Coliseum site. Mr. Rechler told me after the press conference that this is unique among all the projects in his career, in that the Town did not show an interest in coming to the table at any point throughout the negotiations.

Neither the developers nor the County Executive showed a willingness to negotiate, saying it would slow down the process. I do not claim to be an expert, but many people I have asked disputed the idea that a new environmental review would need to be conducted if the project changes in size. Despite the harsh language, Mr. Wang repeatedly shared his desire to make it work on Long Island, sharing his desire to keep the Islanders in their rightful home for many successful years to come. Mr. Wang said, at the end of the day, it came down to a single question: "Yes or no?"

I pressed a few of the parties on this after the formal part of the press conference was over - "If the Town of Hempstead returns with a reasonable offer, would you refuse to negotiate?" All parties denied to make the commitment, even though it is currently a hypothetical. I hope, at the end of the day, all sides will come together and put Long Island first.

Next Steps

Obviously, the ultimate goal is for re-zoning approval, but (as the chart states) other things must be done as well, and they all depend on the Town of Hempstead.

The Nassau County Planning Commission must approve the sub-divisions of the property, but they by law cannot do so until the SEQR process is over and the Town of Hempstead adopts the Final Generic Environmental Impact Statement (FGEIS). The next scheduled meeting of the Planning Commission is October 15, but they indicated a willingness to schedule a meeting in the meantime if it meant moving the process along in a more timely fashion.

In the same vein, the Legislature cannot vote on the lease until the Planning Commission acts, and they will likely not be able to vote until after re-zoning has been approved.

One thing is clear: at this point, it all comes down to the Town of Hempstead.

Bottom Line

This move, especially given the timing, is clearly meant to put pressure on the Town of Hempstead, as the Town is now the only government body standing between us and ground-breaking for the Lighthouse Project.

I have said before, and I will say it again: both sides will need to give on this in order for the vision to become reality. The Town cannot act like it does not have a duty to negotiate and meet with the developers, but in the same vein the developers cannot play a hard line. It is necessary now, because, as I've said, you don't negotiate against yourself, and it is up to the Town to make the next move. However, at the end of the day, this is Charles Wang's legacy, and both he and Scott Rechler are both smart and successful businessmen. They would all, I'm sure, rather have 80% of something than 100% of nothing.

I think Patrick, The Sign Man (who is now a fixture at these meetings), summed it up perfectly, since the next move is now on the Town of Hempstead:


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