Betting on Failure? A Let There Be Light(house) Investigative Report

Ladies and gentlemen, hang on to your hats.  This is a Let There Be Light(house) world exclusive. 

Follow the Money

The oldest cliche in the book when it comes to politics is "follow the money," and I have been doing just that over the past several months after both a tip and a hunch.  It is fairly easy to do this since New York State maintains a surprisingly intuitive online search engine for political contributions.  We used Ed Mangano's campaign as a test bed because he represents the incoming administration, and, not surprisingly, we found many large donations from individuals and Political Action Committees (PAC's) connected to large real estate developers. 

However, the surprising part is this: a large portion of these donations came after Election Day, when it became fairly clear Mangano would win.

The Players

We discovered an interesting array of donors since Election Day to the Mangano campaign, whom I have contacted for comment and which, at the time of writing, has not responded. 

Our first interesting hit came from a group called the Long Island Prosperity PAC, which donated $3,500 on November 10.  This was a day after a $5,000 donation to the same PAC from a man named David Mack, whose name should be familiar to anyone who has attended or visited Hofstra University.  Mr. Mack served as Vice Chairman of the Metropolitan Transportation Authority (MTA) from 1993 until his term expired on June 30, 2009 (I have not been able to find whether he was re-appointed).  Mr. Mack is also a Director of the publicly-held Mack-Cali Corporation, a provider of class A office space with many properties in the region.  The interesting part? None of Mack-Cali's properties are in Nassau County - in fact, none of them are on Long Island.  (A Mack-Cali representative declined comment for this piece)

Case #2: Bruce Blakeman, former Nassau County Legislature and current Trustee of the MTA (along with David Mack).  Mr. Blakeman has donated over $5,000 to the Mangano campaign since Election Day between himself and numerous affiliated PAC's.

Case #3: Association for a Better Long Island, a local PAC which donated $7,500.  The Association's President and Chairman is Mr. Ed Blumenfeld, a prominent real-estate developer who submitted a joint bid on the Coliseum property with Sterling Equities, a group headed by New York Mets owner Fred Wilpon.

There are also the usual suspects, including $10,000 from the Renew New York PAC, a group heavily funded by former Sen. Al D'Amato, who has long been rumored to be working behind the scenes against the Lighthouse Project due to a falling-out with old friend Charles Wang.

Together, these 4 donations count for a little more than 1/3 of the total Post-General funds Mr. Mangano has received.  The identities could be telling.

Disclaimer and Background

Before anything else, I need to make a very large disclaimer: I am not accusing Ed Mangano, anyone in his incoming administration, or even the donors mentioned of any wrongdoing.  I am pointing out some developments that clearly present potential issues for the Lighthouse Project should the plan falter.

As I have said many times, the Lighthouse Project is, at its heart, a business deal, and, more particularly, a real estate deal.  This is a project that is, in my view, 100% correct for Long Island and its future economic viability, but it sits on a patch of land that has not fulfilled its major promise since it was ceded to Nassau County in 1962, a piece of land that may be the most valuable on Long Island.

Major developers have wanted a piece of the pie for years, and they have taken interesting tactics to get it.  For example, as I reported previously, some sources close to the negotiations have claimed other developers were the main reason soon-to-be-former County Executive Tom Suozzi was forced to revoke his original Memorandum of Understanding (MOU) with Charles Wang and put the property up for competitive bid.  The issue, as usual, was money, namely, that they would not be the ones standing to receive it.  Luckily, Scott Rechler became a partner in the new Lighthouse Development Group, the overall proposal became stronger, and Mr. Wang, who was really the only person who could have won such a bidding process, re-won the right to be named developer of the Lighthouse site.  It was confirmed by the Legislature by a vote of 16-2, with then-Legis. Ed Mangano among the Yes votes.

As we all know, we are now in a period of radio silence, with a complete blackout by the Lighthouse and not much coming from the Town of Hempstead, either.  However, with a new sheriff coming to town, and Newsday previously reporting their obvious interest in the crown jewel of Long Island, some are beginning to jockey for position behind the scenes.

Moving Forward

This clearly signals the beginning of a full-court press from other developers who wish to curry favor with the incoming Mangano administration and remind the County that, yes, they are here in case the current plan falls through. For example, Mr. Blumenfeld already bid on the property once, and he has issued a willingness to do it again should this proposal fall through.  Mr. Mack is director of a firm that does not have any properties currently on Long Island, and you know he would like a foothold into such a lucrative marketplace.  Mr. D'Amato is heavily connected to the real estate industry as well, and he may also be attempting to curry favor along these lines.

A bigger issue is what would actually be done with the site should the Lighthouse Project not succeed.  The Town of Hempstead has questioned the ability of the Uniondale School District to handle the children from the proposed Lighthouse Project, so it is highly doubtful that a purely residential community would be proposed.  Mack-Cali is purely a commercial real estate company, so there is a chance an office park could be proposed, but with vacancy rates being so high that may be too much of a gamble.

Therefore, what would these organizations likely provide? A dense, mixed-use development, one that may not have as many community amenities (Coliseum, Convention Center, Celebration Plaza, Performing Arts Center, etc.) because, as many developers admit, they are simply not cost effective.

The people do not win if this project does not succeed - and it is becoming more clear who would.

Bottom Line

We will likely be re-visiting this, because it's clear that some people who could gain financially from the failure of the Lighthouse Project are attempting to curry favor with the new County Executive (who has, let's not forget, repeatedly endorsed the Lighthouse Project).

It is now put up or shut up time for the Lighthouse Project.  While the two sides are apparently now negotiating on changes to the size and scope (more on this later), the wolves are gathering at the door, ready to pounce should there be the slightest bit of vulnerability.

This is the right project for Long Island.  Mr. Wang and Mr. Rechler are the right developers for Long Island.  We must take a stand and make sure this is not thrown away for an uncertain future.

Also, I'd like to extend a sincere thanks for the help both given and offered for the research - you (and you know who you are) made this much easier for me.

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