Thursday, December 10, 2009

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.

Please share your thoughts in comments. Petition. Email Me. Follow me on Twitter. Become a fan on Facebook.

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  1. Wow. Eye opening stuff.

  2. EXCELLENT JOB. Outstanding, even.
    It is great to know, but its sickening to hear.

  3. Eden Larkin might get some kind of award if she wrote this for Newsday.
    But she didn' she won't.

    And to think people have to pay money to get Newsday online now...and you offer this little tidbit for free.

    Follow the money? DUH!!

    The scary thing Nick?
    There are even MORE powerful forces working against the LH Project now. (I.E. Kiss Me Kate doan mean nuthin).

    Good job buddy.

  4. "Become a fan on Facebook."

    BTW...if you think I'm gonna "become" a fan of a vowel first Vanna.

  5. Nassau "politics" at its "finest".

  6. Get ready for the World biggest over 50 Condo complex, think about it, No school kids, A few 100,000.oo per unit. 77 acres can hold maybe a 1000 units, imagine the money to be made.
    of course, this is whats killing the rest of LI, but the big players here will be long gone before LI really feels the effects.

    Awesome site Nick

  7. Welcome to the world of New York politics. The best elected officials money can buy -- before and after the fact!

    Read The Community Alliance blog at

  8. Al D'Amato. He's the man that delivered Wang to Nassau, D'Amato will dispose of Wang & deliver several other developers. Nassau will have it's Hub and the Islanders will have a new arena in Brooklyn. Mangano will be a hero & so will Kate Murray. Seems like a win-win for the fans & the people of Nassau. From this entry seems like good news all around. A Happy Friday indeed!

  9. Oh yes, Anon, absolutely. The 3 outstanding lawsuits for Brooklyn are no big deal. The fierce and organized local opposition are nothing. The fact that a large part of Bruce Ratner's funding depends on breaking ground in the next 20 days is just a minor detail. The fact that Brooklyn Borough President Marty Markowitz has mentioned the Islanders means Bruce Ratner has already made the deal.

    In addition, the 5 years it's taken the Lighthouse to get to this point are irrelevant. We'll have everything taken care of in 6 months - and we'll have a farm in the country.

    Tell me again about the rabbits, George.

  10. The lawsuits have lost. The one remaining is simply a formality. The Brooklyn arena is done. The New York Nets christen the arena with their first home game in Novmeber 2012. It's in the newspapers, public knowledge. Your out of your sphere of knowledge on this, call Barry Baum of the New York Nets. Tell him Anon sent you. He'll educate you on all the stuff you don't know.

  11. See, here's the thing you don't seem to get. The fact that the Brooklyn Arena may be done (and by the way, all the people I've spoken to say it isn't) also doesn't change your central premise that the Islanders would automatically follow.

    Here's some things about Charles Wang, since you may be "out of your knowledge" on this as well. First of all, Bruce Ratner beat him in a very public battle for the Nets. If he had the Nets, Wang would have more leverage and would have probably gotten a deal done on the Coliseum by now. Second of all, everyone I've spoken to says Charles Wang's proclamations of wanting to build a legacy are 100% genuine, and not to underestimate how much he wants to get something done that he can call his own. After all this, he's going to walk, hat in hand, to the man who destroyed his dream of owning an NBA team and ask to play second fiddle in someone else's development in an arena not designed for hockey? (this is more than ice - look no further than Madison Square Garden for how bad the sight lines can be in a hockey rink built for basketball) Forgive me for not thinking things like that just happen.

    Nassau County is the top option here, and it always was. Whether or not you like that, it's the truth.

  12. "Your [sic] out of your sphere of knowledge on this..."

    You are saying that to NICK of all people? Oh THAT is rich lmao.

  13. This piece belongs in the LTBLH blog Hall of Fame! Great stuff...Not surprised in the least but this intel could come into question in the months ahead

  14. Oh so the reason Murray and Co. have issues with the project isn't that the are worried about the traffic and where the water well is going to be located?

  15. Islanders in Brooklyn will be sweet. Sorry Nick, but it has gotten to the point where Brooklyn has a solution for the Islanders and the TOH continues to go in circles. The lawsuits were not won by those opposing the development in Brooklyn and construction is going to start soon. Raftner has publically said he wants the Islanders in Brooklyn and there are no issues reconfiguring the building for the NHL and NBA. Nassau County has had their chances and continue to do nothing as far back as WW2 with this property. The Islanders will finally have a home where they are wanted, can succeed, and most importantly, have a home they can be proud of!

  16. Anon (Second) - we need to clear this up, because Bruce Ratner himself has never said he wanted the Islanders. Brooklyn Borough President Marty Markowitz has said it, and some financial analysis by Goldman Sachs has said "The New York Islanders COULD become a tenant."

    It just amuses me that you seem to suggest I'm hearing what I want to hear when that is exactly what you're doing. If they actually break ground, it becomes a potential option, but it's dangerously naive to assume this is a slam dunk.

    I'm not talking about this anymore - there will be a post on it in the future, and I'll save it for then.

  17. Anon (First): there are issues about size and scope, and numerous sources say the sides are far apart on how much of a reduction is fair (more on this in a forthcoming post). However, you have to wonder why these developers have suddenly come out of the woodwork since the election.

  18. One last word on Brooklyn: you don't seem to understand that I'm talking about this from a perspective that this is about more than hockey. Nassau County will suffer far more than the franchise ever could if this project doesn't go through - and I think it's silly to throw the whole thing away over hockey-related frustration.

  19. Did anybody bother to call Barry Baum? It's really wrong to say the Arena in Brooklyn is not going to happen when it is. People can say anything on blog, the real scoop happens when you pick-up a telephone & ask questions. And keep quiet chick-a-dee the fat mouth small brain act is boring me. I may not have a blog, but I know a thing or two about thing or two. Nassau County & Charles have not spoken in over a month. Charles has spoken to Ratner & the Russian several times in the last six weeks. Also, Ratner has said he wants the Isles. One statment was in the report the other statement was from right from Ratner's mouth. Stick with Nassau, again, the goings on Brooklyn is out of your sphere of knowledge.

  20. Hi Anonymous, How do you know that Charles has spoken to Ratner and the Russian in the last 6 weeks? It would be awesome if that was true. I also hope that the Islanders have submitted a bid for the Willets Point project. Do you know anything about this?