Thursday, February 18, 2010

The Dirty Little Secret


This Lighthouse process is turning into more of a theater of the absurd by the day.  You have the Town of Hempstead, who steadfastly refused to meet with Charles Wang for 7 years, suddenly congratulating itself for jump-starting the process.  At the same time, you have Charles Wang's tight-lipped Lighthouse Project, which begged for meetings for years and is now suddenly not making any of them.  There has been acrimony on both sides, and with the process having been dark for over 4 months people's imaginations are taking over to a greater degree.  

This came into perfect focus when, on Monday morning, NHL commissioner Gary Bettman was a guest on Boomer Esiason's WFAN radio show.  He criticized the Town of Hempstead for not being able to "get this together," and seemed to throw cold water on the idea of Brooklyn as a relocation point for the New York Islanders should the Lighthouse Project go awry.

This led to Newsday, our favorite local paper, doing a two-page spread saying that this "opened the door for Queens" and listed all potential relocation points, including, I can't believe it, Kansas City.  Naturally, this prompted more hysterical blog posts and emails from nervous fans who have been caught in the crossfire o this piss-for-distance contest.

Everyone, take a breath.

There was no news in anything Gary Bettman said.

You could wonder if Charles Wang is feeding the commissioner this information, but let's not forget that Bettman spent months bashing Nassau County for a process that is wholly controlled by the Town of Hempstead, so it's fair to ask whether the commissioner is actually helping or just thought he was.

Let's take a quick detour into the three main options, again, because to me this illustrates the dirty little secret of the Lighthouse saga:

Brooklyn

The Atlantic Yards Project cleared its last major hurdle, and Brooklyn Borough President Marty Markowitz (a figurehead in this whole process) has made no secret of his desire to lure the Islanders to the soon to be built Barclays Center in downtown Brooklyn.

Seems like smooth sailing, right?

Wrong.

There is heavy, organized, and well-funded community opposition, and they have spent years filing every lawsuit known to man in an attempt to stop Atlantic Yards based on an alleged illegal use of eminent domain.  This will not stand, as the key legal precedent, Kelo v. New London, is firmly in favor of the government's right to seize private property for private use.  Some want to challenge Atlantic Yards based on the recent decision against Columbia's attempts to have blocks of Morningside Heights condemned, but as my friend "Brooklyn Law Student" pointed out, it's not a solid legal argument.  The courts ruled that Columbia cannot profit off the blight in Morningside because they were found to have contributed to it.  You can say what you will about Bruce Ratner, but you cannot say he is the reason the area was in its condition at the time of the eminent domain.

This is another dirty little secret: the opposition knows they have no solid legal footing.  

They're not trying to win.

They're trying to run out the clock.

They are hoping that a continuous flood of lawsuits will deflate Ratner, cause him to refund the bonds he sold for arena construction, and move on from the project.  With the New Jersey Nets moving "temporarily" to the brand-new Prudential Center in Newark, one wonders if Russian billionaire Mikhail Prokhorov would be tolerant of any delays.

Brooklyn may well happen, the courts and city are on Ratner's side, but it's not quite there yet.

Queens

Not surprisingly, the statement from Bettman touched off another round of Queens hysteria, but this too is a bit premature.  As I've said previously, Queens merely issued a Request for Qualifications, to which 29 developers responded, and we don't even know whether Charles Wang and Scott Rechler were included, because nobody is talking.

In addition, calls from the Queens Chamber of Commerce President (a man about as useful to that process as Marty Markowitz is to Atlantic Yard) have not been returned by Charles Wang or anyone in the Lighthouse offices.

First off, there is another organized opposition in Queens that will almost certainly fight the Willets Point development as rabidly as those in Brooklyn have stood against Atlantic Yards.

Further complicating things, Queens is only planning to issue a Request for Proposals (RFP) later this year.  It's over 5 years since the Lighthouse Project was first unveiled, and 4 since it won the competitive bidding process that Nassau County set up after the fact.  Even if Charles Wang were to go all-in on Queens (something that would completely end the Lighthouse, because the Town of Hempstead would not accept it) and get the buy-in from Mike Bloomberg and the city, it would still take years to get off the ground, as this does.

I have yet to hear a cogent reason why starting from square 1 is inherently a better idea than continuing a process that is far along, despite obstacles.

Lighthouse

I've said repeatedly that political will was the one key ingredient missing from the Lighthouse Project, and despite the fabrications from its enablers, the Town of Hempstead has finally developed this through its decision to put forward a zoning plan.  It guarantees that something will eventually be done at the Lighthouse site.

We of course don't know what will come out of it, and I and others have repeatedly pushed the idea of the Town making a proposal bigger than it may be comfortable with in order to prove it is negotiating in good faith.  We do, however, know that Ed Mangano, the new Republican County Executive, is eager to present an image as a uniter, separate from the hyper-partisan Tom Suozzi, and he controls the keys to any future promotion Kate Murray may want in the future.

It will not be better immediately, but the seeds have been planted for an agreement if both sides want it badly enough.

Bottom Line

From a hockey perspective, there has never been a team in the modern NHL to leave a location where it won a championship, and given the recent fiasco with the Phoenix Coyotes I can't imagine the league wants to risk a nightmare with the Islanders.  

In the same vein, you have two main relocation offers full of issues that have never happened with the Lighthouse Project, and sudden political will at the Town and County level to get something done at the Coliseum site.

If Charles Wang were to walk, it would take years to choose another developer who would wind up producing...the exact same project as the Town of Hempstead chooses in its zoning plan.

When you look at all these issues, this becomes the Dirty Little Secret: The easiest thing for all parties to do is make a deal with each other.

Whether or not that happens is a story in and of itself.

Coming soon: What we and the Lighthouse opponents can learn from St. Vincent's Hospital in Manhattan.

Please share your thoughts in 
comments. 
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13 comments:

  1. Hi Nick, thanks for the article. What do you mean Queens Chamber of Commerce President is ' a man about as useful to that process as Marty Markowitz is to Atlantic Yard' ? Do you mean that that the QCC President is very important to the Willets Point project or the other way?

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  2. Charles Wang, when he was on the air about a week ago, said that he only wanted to focus on hockey! now that the Olympic Break is here, i believe that this is the perfect opportunity to open up negotiations with the Town and end the media blackout! There is no Islanders news and the fans are looking for a story... why not give it to them in the form of Lighthouse negotiations?

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  3. You guys don't have to worry about losing the Islanders to Brooklyn. The way it's designed, the arena can't accommodate an NHL-sized rink.

    http://noticingnewyork.blogspot.com/2009/12/craftily-negative-promise-offered-for.html

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  4. Nick, home sick today, nice job breaking it down. Can you comment on how the last minute re-negotiating of the lease with Suozzi and Nassau factors in Wangs decision to accept a scaled down LH project? Wang will start making some money on concessions and parking, Or is this just another option to exit and relocate for Wang? As an Isle fan, I am still a little confused whether the new lease was a good thing for us or not. Also Mangano seemed upset that took place under his nose. Understandably but If Mangano wanted to broker a deal between the TOH and Wang and step up, why would he be upset?

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  5. couple of comments about your piece:

    "The Atlantic Yards Project cleared its last major hurdle, ... There is heavy, organized, and well-funded community opposition ..."

    the opposition to AY is "well-organized" for sure, but i would not describe it as "heavy" or "community" based. early on - perhaps, but i've been in the immediate neighborhood since '93 and get around pretty well. in the last 2 years i have not heard or seen a real discussion, argument or even serious mention of the issue. my impression is that most everyone here is either resolved AY is going to happen or is largely detached (as some seem to be in nassau/toh with respect to the LH). the opposition (ie. mr. goldstein) is a concentrated core of extremely committed and efffective citizens and their legal support, but as a whole it is no longer "community" based, if it ever really was.

    " ...every lawsuit known to man in an attempt to stop Atlantic Yards based on an alleged illegal use of eminent domain. This will not stand, ..."
    to my knowledge there are 2 significant legal situations still outstanding. first, the plaintiffs that lost the original nys court of appeals challenge to the use eminent domain have requested reconsideration, based on the columbia univ matter you site, and have asked the court not to rule on their request until the other matter is finally heard in the spring. second, an attempt is pending in nys supreme court to stop AY based on a challenge of the empire state development commission's "failure" to re-study the AY's impact on the local community after the design etc. had been changed. it's easy to see both of these challenges as 'long shots' and as attempts to delay AY as much as to flat out kill it. but the columbia/eminent domain issue in particular (which - holy mackeral! - also just happens to involve that shadowy agency ESDC)has become a potential political atom bomb (see george will/washington post), and, nys judges have been known to be ...quirky, if not goofy at times. i wouldn't bet on anything when it comes to final resolution on those matters.

    regarding the prospects of LH in TOH still happening, and the suppositions that "political will was the one key ingredient missing from the Lighthouse Project ..." and that THAT "guarantees that something will eventually be done at the Lighthouse site."
    i have believed all along and still do that the "political will" of those officeholders or politics in general has very little to do with how the LH issue will turn out. also, i think that when it comes to things related to $$$ and influence in nassau/toh - nothing is guaranteed - except that it will be a dirty mess.
    as far as the queens option is concerned, i know very little about it, but it does seem like the most unlikely by far based on time frame alone. but then maybe that's precisely why it will happen.
    sorry to take up so much space, nick. this issue has me more engaged and actually on-edge on a daily basis and for a longer period than almost anything i can think of. i guess how important the islanders are to me is why, and my levittown/LI roots. in fact, much as i'd love to be able to walk to islander games here in brooklyn, maybe a bigger part of me still hopes the LH works out. good luck.

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  6. we live in a society now that thinks we the people deserve to know everything about everyone at all times. (24 hour news channels, reality tv, gossip sites) and when someone actually keeps his mouth shut it freaks everyone out causing tons of speculation and panic etc. but it's all a waste of time. i know patience is no longer a virtue (and it doesn't help this website any) but we really just have to wait. wang obviously is not doing nothing. it's frustrating but we have to wait. i don't think we have the right to know what he plans to do in the future. it's his team. his land deal. his problems. his lost fortune from this drain of a team. i for one can wait... but the curiousity is killing me just a bit.

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  7. Said it before, and I'll say it again. CW just patiently waits..that's why he's saying nothing. Best offer that comes his way he'll take..LH, a local move to queens, bklyn, or suffolk, sale of team...who knows...why rush now, no point!! He won't push the ToH, been there done that...he has till 2015, there will be some offer by then. He isn't and won't negotiate I bet. Best offer wins.

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  8. CW just patiently waits..that's why he's saying nothing. Best offer that comes his way he'll take..LH, a local move to queens, bklyn, or suffolk, sale of team...who knows...why rush now, no point!! He won't push the ToH, been there done that...he has till 2015, there will be some offer by then. He isn't and won't negotiate I bet. Best offer wins.

    I have to say, he may be right.

    If I'm Charles Wang, and they don't give me anything close to what I would consider a reasonable scaledown, I wait and run out the clock. Everyone and their grandmother will know by 2015 that the Isles will be in danger of moving. It WILL be a big story then. Not now. Not yet. Way too early. They have less than 5 year left. As it gets closer and closer and Murray (though it may be her successor)and her people start to realize Wang isn't budging, the news story will start to be a big deal in the local papers. It will actually become a big deal all over. It will mirror the Pens situation as it will probably come down to the night before they will leave. THEN and ONLY then, will someone get a "deal" done.

    Scary thought to be sure, but as the months go by, and TOH continues with their buffoonery and stall tactics, what other choice (besides selling) does Wang have? And while I don't absolve him from blame, (with the inane "media blackout", which also blacks out his biggest supporters: US)if this 11th hour scenario comes to be reality, we will ALWAYS blame Kate Murray and the TOH and the rotten to the core politicians of Long Island for killing our beloved Islanders.


    Errr, or was that Mike Milbury?


    -Big Van Vader

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  9. Anon - the sub-lease will hopefully increase revenue streams, but it's not clear by how much. The post called "Back to Basics" lays it out as well as I can - the objective is to make enough money to cover the arena costs, and without the detailed models that the Lighthouse would have I can't speak in specifics beyond that.

    Jae - I think Charles Wang should return calls from the Queens CofC president, but he doesn't have any official power in this, nor does Marty Markowitz.

    DomInLA - We agree on this to a pretty big degree. People can be desperate for information because the blackout has cut off everything. That's largely why I wrote the post the way I did; Bettman touched off another round of Queens hysteria despite no actual news.

    Day1 - you're bringing up a lot of interesting points, and I want to respond to you when I have more time.

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  10. dominla - "it's frustrating but we have to wait. i don't think we have the right to know what he plans to do in the future. it's his team. his land deal. his problems. his lost fortune from this drain of a team. i for one can wait... but the curiousity is killing me just a bit."

    i agree that it's the owner's perogative to handle this as he sees fit for his purposes. the problem may be though that the disconnect turns off his own fan base, alienates the very people he relies on to make the team a success. it can't help but cost him fans and $$$. either it's a bad business decision, or he doesn't care, and if it's the latter, the question of why would seem to be answered pretty easily.
    nick, you've been getting insightful comments on here from some sharp people, especially lately. it's a really good outlet.

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  11. "Former Islanders owners Greenwood and Walsh arrested on securities ...Paul Greenwood and Stephen Walsh were busted for securities fraud,..."

    the bureau of prisons is gonna have to build a new facility specifically for former islander owners.
    it's creeping me out. a lot of people i'd bet.
    bizarre.

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  12. It's funny - all the people who bash Charles Wang forget how bad it's been.

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  13. QUEENS is as viable as Hempstead now that Murray is starting from square 1. 5 years until the lease ends is plenty of time to get things done in QUEENS. It's where NYI should be.

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