Thursday, April 1, 2010

Special Report: Questioning the Status of the Lighthouse Project

This is a collaboration with B.D. Gallof.  The same piece will also appear on Hockey Independent.  

(This is not an April Fools)

April 1st, 2010

What began with a song and greeting: "Meet Me at the Lighthouse!", which even blared from a holiday card they sent us at the end of 2008, has turned into a whimper. As the lights have gone dark from some shake-up, more is coming clear...

The Lighthouse Project’s status is in question.

Rumors are swirling over financials, an issue the Town of Hempstead has been pushing for the better part of a year, even though any developer in the same position would likely have the same issues they were trying to pin on Charles Wang.  Some sources have begun to whisper behind the scenes that, given the state of the economy and reportedly high vacancy rates in many properties, Scott Rechler may be having financial problems. Others have wondered aloud about Charles Wang's financial viability since back in November. Another rumor being bounced around is that Charles Wang will be indicted for something.

Lots of rumors, yet nothing of substance. The rumors are allowed and take shape simply due to the fact the Lighthouse Project have had their mouths clamped shut since mid-October.

Other sources are going even further, suggesting something far grimmer.  Per these sources, Charles Wang and Scott Rechler may be taking steps to dissolve their partnership in the Lighthouse Development Group. This is an especially interesting situation, because Messrs. Wang and Rechler pooled their assets in and around Nassau Coliseum to form collateral for the Lighthouse group, making Mr. Rechler the de facto co-owner of the New York Islanders. If they are disengaging themselves, and while we have not heard either confirmation or denial from the Islanders or the Lighthouse despite attempts to reach out, the rumored "divorce" would explain many of the strange behavior over the past nearly six months.

This new rumor sadly coincides with what we've heard but not been able to get anything further on...where the project might be dead. Or Charles Wang will stare in the mirror and finally blink.

To make a very long story short: If Charles Wang and Scott Rechler are ending their business partnership, there might not be a Lighthouse Project.  Losing Rechler's millions in collateral around the proposed Lighthouse site would cripple the ability to land financing.  Even the Designated Developer Agreement (DDA) signed with Nassau County  could be invalid, since it would be signed with a company that no longer existed. 

However, per a Town of Hempstead source that has also heard many of the rumors we cited: "If they divorce, it does not kill the deal unless they say the deal is dead." 

This might be due to the concept if Rechler steps out, the Lighthouse Project name and status could be saved or retained by one of them.

We agonized over whether to publish this report, given the lack of response from other sources to our inquiries. We’ve had this for days now. We've received not one denial. Instead...silence. We feel strongly that fans should have a right to know the true state of the Islanders ownership. Moreover, after being rallied about, asked to show up and more to validate Mr. Wang and Mr. Rechler's vision, shouldn't we fans been given more than just the silent treatment?

Has the Lighthouse going dark just been public relations tact to let things peter out quietly instead of facing some well-earned questions?

Now word is starting to reach some people of a separation between Charles Wang and Scott Rechler. If true, is it the end of the Lighthouse Project, which fades into the murk without serious questions and attentions?  While we have not heard an official response from the Islanders or the Lighthouse Project at this hour, we believe the following questions need to be immediately addressed:

Question #1: What exactly happened when the Lighthouse first went dark after denying meetings between the ToH and themselves in their press release (which was not true)?

Question #2: What was that train wreck of an interview between Howie Rose and Charles Wang where Rose was clearly looking for an announcement of some sort? Once again, denial became a bald-faced lie about meetings between them and the ToH.

Question #3: Coinciding with "going dark" seemed to also stop the Lighthouse Project's paying of FP Clark. What kind of group that has, by its own admission, spent tens of millions in studies and proposals, just stops paying the consultant needed to go forward unless it is truly over?

Question #4: The reassignment of almost all LHP staff, most of whom now have visible roles within the Islanders organization. I mean, has the LHP development group done much of anything since November except now do team duties and events?

Question #5: Brooklyn, Queens and ToH Plans. Since the car crash of a re-zoning hearing back in September, and especially since the October 3 deadline came and went, we have heard more and more Brooklyn and Queens supposition. Meanwhile, since the LHP stopped paying FP Clark, the Town of Hempstead has picked up on it to put forward their own plans that doesn't infringe on the donor and influence patrons in Garden City, the republican leadership and others, despite that they were the minority opinion.

This ToH effort to develop that land might be their attempt to save face since the ToH has been questioning Wang's intent, inability to adjust size and scope, and questioning his fianaces since summer.  It is an interesting change from the Town, which steadfastly refused to meet with Mr. Wang or former County Executive Tom Suozzi to share their vision for the site since 2003, citing phony "conflict of interest" concerns.  Kate Murray has made many missteps, but she appears to realize full well that she will be blamed if the Nassau Coliseum site is not developed in a way that benefits the community.

Meanwhile, the only words from Queens and Brooklyn are from inconsequential mouthpieces in each district, such as Brooklyn Borough President Marty Markowitz and the Queens Chamber of Commerce President. Not one word has come from the horse's mouths except when Bruce Ratner said that it was "unlikely" when citing the Isles to Brooklyn scenario. That could be a clear indication that Wang and company have no interest there and might have shutdown shop until Queens begins in earnest down the road.  However, even though Brooklyn has many natural disadvantages, it has one major advantage: the arena is financed and currently under construction.  After the painful Lighthouse process, with a better-funded opposition beginning to sharpen its knives in Queens, would Mr. Wang really want to go back to that well?

Question #6: Charles Wang citing he hasn't heard from anyone, when he never called back inquiries from Mangano's group. Sources with Mangano have cited that Wang "has really backed off this thing". Meanwhile, after the interview with Howie Rose with the fibbery, sources cited that Mangano people had tried to contact Wang twice...both leading to no response. 

Per a source, Charles Wang and Ed Mangano current status might be one of friction. Evidently things have soured more between the two sides, even alluding to that there has been a falling out.

Question #7: What happens to the land around the Coliseum, much of which is owned by Rechler?

Question #8: Some have cited over a month or two ago that there would be a sit down telling "their side" of the story by Wang and Rechler. Since then there has been nothing of the sort. When will we hear something of substance, which Howie Rose clearly expected to hear on the Islanders broadcast last month?

We are at a critical juncture in the Lighthouse Project, and those who have asked so much of us over the years now owe us that most basic courtesy: honesty.

We deserve to know the true state of this project as citizens who supported it in record numbers.

We deserve to know the true health of our team ownership group as Islanders fans.

We deserve to be spoken to.

The ball is now in your court, Messrs. Wang and Rechler.  Please return the shot.


B.D. Gallof and Nick Giglia 

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  1. good job guys i hope they listen

  2. Folks, the Brooklyn arena is NOT under construction. Several properties needed to allow construction are NOT in Ratner's possession. It's highly likely that they will be in his possession within a few months, but they aren't yet.

    The bigger issue is that the way the arena is designed, pro hockey can't be accommodated. And since Ratner only cares about getting the Nets and their losses off his books, he's not going to do a retrofit. Read up:

    Wherever the Islanders end up, it's NOT going to be the Barclays Center.

  3. I'm not sure why you guys don't get is not in CW's best interest to do anything and it is absolutely in their best interest to wait and see what "best options" evolve...yes yes yes, the LH project is dead, that is obvious...but I would bet there are no clear plans. It makes sense that CH and Rechler disentangle if there will be no LH project. They will not speak because bloggers want them to...why should they (I know, they owe it to you/us). But they really don't...if true that CW has dumped millions into the Islanders, then he SHOULD now do what's in his best interest, which is to wait and see what evolves over the next couple of years. Just one mans's over, now we have a long long wait i'm afraid.

  4. Hi Nick, thanks for the article. From what I heard from Ratner's interview with WFan radio in New York a few weeks back Ratner said Islanders moving into Brooklyn "is not necessarily likely" and the Islanders are "certainly an option". "Not necessarily likely" probably means there is no guarantee that the Isles move into Brooklyn. Unlikely means there's less than 50% chance moving.

  5. Nick.

    Thank you for doing your best to keep us in the loop. Since the "Silence of October 3" happened you seem to be the only one trying to get a handle on excactly what is happening.

    If this thing (at it appears) is in crash and burn mode, I think that it may be time for Mr Wang to seriously consider selling the team. Hopefully to someone who can work with the TOH, or is willing to talk to Ratner to move the team to Brooklyn.

    You are absolutely correct though, it is time for Mr Wang to honestly and publicly make a statement on the *actual* state of the project and the Islanders.

    Thanks again for all of your diligent work


  6. Nick, you're absolutely right, we deserve an answer. But, the way things are unfolding, here's what I'm thinking is going on.

    Wang didn't get 'certainty', fine, FU TOH. The Lighthouse has created such a stir of emotions that something needs to be put there. Wang decided that he's not going to put another dollar into this until he's told what he can build. Thanks to Suozzi, he was given a lifeline, and may actually start to make a little bit of money, or at least dampen the bleeding. Now that he has helped create a stir around this thing, everyone wants something to be put there. The TOH can't just let this sit so they take the ball, and 'jumpstart' the project. Now they are paying for Clark Associates to finish, not Wang. In a couple months, Wang will know what can be put there, something he's been asking for since the blackout. The TOH, on their own dime, will put together a new plan, which Wang still has the rights to accept. Minimally, he should get a refurbished Coli out of this, which will make it easier to sell the team, if he so desires. In addition, if he doesn't like the plan, the refurbished Coli might not even come out of his own pocket.

    IMO, the LH was his dream which has become his nightmare. He knows that's not going to happen anymore. At this point, he just wants to make some money. He'll accept their proposal, save a ton of dough, and start to recuperate some of his losses.

  7. Sorry, I didn't give my point, which is that we're not going to hear anything from Wang until the TOH provides the Plan. Charles B. Wang is not going to publicly state that he's playing the system.

  8. - kate murray (or the kabal that pulls her strings) is a lot smarter than any of us thought. She has managed to basically kill the project, keep her base and work it in a way that at the end of the day wang will be portrayed as the bad guy/guy who gave up/guy who couldn't get the financing together.

    - wang - wow. I have my eyes wide open, and consider myself to be pretty on top of the whole situation, and he is turning into a big zero right in front of my eyes. Unless they really can't get financing and are closing up shop to save face he has turned out to be just as big of an impediment as murray herself. Ever hear of negotiation chuckie? Did you really think that the town would roll over? What a disgrace. Fight the good fight. Get your position out there in the public. Fight the good pr fight. Who is advising this guy? Can anyone? Is he such a meglomaniac that he won't listen to anyone? He didn't get his way and now he is out? After all the support he got from his fanbase and the unions he owes more. He is making himself into walter o'malley right in front of our eyes - again, well played republicans.

    It's just sad and pathetic at this point. I loved the piece - just wish that we could get some answers - unfortunately it had the feel of someone yelling into the abyss. It's sad...if it's over wang should just be transparent and end it...put us all out of our misery. Doesn't seem like that's his endgame. Almost like BOTH sides are trying to run the clock out at this point.

  9. If this project dies, it will be because of Kate Murray and the Town, no ifs ands or buts about it. Perhaps if this thing had gotten started when it should have, things like financing and the economy would not have been as big an issue. It sickens me to think that a bunch of politicians may cost Nassau its only professional sports franchise.

  10. Not just a sports franchise mtrico, but the economic future of Long Island!!! I have seen in posts here and elsewhere where people are leaving the Island because it is becoming financially unlivable. Going for greener pastures as it were.

    The Lighthouse Debate (debacle?) looks not only like it is dying but corporate America is looking at this high profile project and its woes and saying "Long Island is not a place where my business can grow" Is that the reality, I don't know but that is the message I feel that is being sent.


  11. Great conversation here, and very interesting that the guy who writes this "No Land Grab" site doesn't have a link to email him anywhere on his site. You know where to find me if you'd like to chat about's addressing a question that some people here seem to have. I've personally never been sold on Brooklyn, but not addressing it would have resulted in people screaming about it left and right in the comments.

    Anyway, to some responses:

    Anon (Comment 3): To me, this is the same thing as when a politician gets involved in a sex scandal. It doesn't mean the politician is unfit for office, UNLESS their whole platform for office is based on "family values." Charles Wang objectively doesn't have to say anything, but when he built the entire project from the ground-up as an inclusive thing that engaged the community, you bet your ass he needs to talk to us.

    Jae - you're correct. The Brooklyn Borough President, who has about as much power as I do in this situation, is the only one who's actually talking about Barclays Center, but as long as it's out there and the Islanders situation is unresolved there will be people talking about it.

    Derek - it's a really interesting theory and one of the better-thought-out things I've seen on this whole issue in a while. Thanks for sharing it here.

    Anon (Comment 9) - it's amazing how quickly we went from Amateur Hour in Hempstead to shrewd political moves. Charles Wang has made almost exclusively wrong moves since the "deadline" passed in October.

    mtrico - you're right. The arena could have been finished had the Town cooperated when they were first approached 7 YEARS AGO. They are banking on low-information voters who keep returning them to office year after year.

    Islanderbill - that's the big issue here. I'm starting a business and I will never, ever, ever, EVER consider locating an office on Long Island. They're sending a message that big ideas are not welcome, and that they're comfortable just sitting around telling each other how great the place is...while Rome burns all around them.

  12. Nick, good read, do you think having the Isles play in China during the 2010-2011 pre-season has anything to do with attracting investors to finance the Lighthouse project? Also what bank or financial institutions would be willing to finance the lighthouse project? Long Island is really not the place to sink billions of dollars on a project of this magnitude. Even if the project moved forward, property taxes in both Nassau and Suffolk will be ridiculously high in the future and keep going up.

  13. a wang/rechler split in the works would explain some things, and if it led to wang accepting an arena-only deal (with maybe a carrot or two) it might seem to be a pretty good outcome.

    the writer up there who categorically dismisses a brooklyn move writes as if he or she KNOWS. from this I would assume he or she is WITHIN the small group running either camp. otherwise, he or she DOES NOT KNOW.

    as jae deftly pointed out, the take in this piece on ratner's comments seems tilted or possibly mistaken. what he said just as easily could be seen a nod toward the islanders than as a stop sign. in fact, even more so when you consider why in the world he would refer to brooklyn as "always an option" if it weren’t.

    further, i'm not sure of the architectural or engineering credentials of the writer up there, but a "retrofit" at the brooklyn arena to accommodate an nhl team is of course still possible at this early stage. that would seem to be the easy part in all this.

    i have suspected for some time that charles wang decided on a course a while ago but still needs time for necessary ancillaries to be final before proceeding. the wang/rech split scenario is a component I had not really considered before now, and it might be driving this whole thing. still, the longer this goes on I see as more and more as an X factor, mr. prokhorov. he still hasn’t been fully cleared for nba ownership, there’s even a possibility certain things could still happen. something tells me though that he figures into this intrigue somehow and has for some time.

  14. I live in Jersey, but have been an Islander fan all my life. Been to all the great games at the Coliseum and cannot believe how sad the Islander saga has been for so many years. Despite all the great memories, the Coliseum is a dump and there hasnt been a memorable game at the coliseum since that Toronto series. I used to spend alot of $$ in Nassau, but havent been to a game all year. Why bother. If I were smart, I would have become a fan of the team in my backyard, the Devils. But I still cant help but love the Isles and I hope the current young generation can experience something postive soon like I did way back when.It would be a travesty if the Isles left the Island.

  15. nice job but lots of rumor and speculation. if this were a newspaper with an editor he'd say we need facts for this before printing it. in the end it's still wait and see. are you right? wrong? partially right? i'm so exhausted from this season of losing when we want them to win and winning when we want them to lose... that i just don't care much right now. whatever happens happens.

  16. Is this what you were referring to when you mentioned Wang might get indicted?

    The article is 3 months old but under these bad times for the Islanders it still seems very relevant.

  17. Let's say that around Memorial Day the TOH reveals their new zoning plan. Charles reviews it and says and does nothing. He just waits and waits and waits. Does his winning bid have a time limit to be acted upon before it's rendered void? Can the County unilaterally void the bid and send the project out for open bidding again? I have a feeling that this stalemate will last until 2015 when the lease is up.

  18. Wang is not moving this team to Brooklyn, or Queens for that matter. The Islander fan base is right here on Long Island. And sadly as it is, Islander fans aren't showing up to see this team in Uniondale, so what makes anyone think fans are going to trek out to Brooklyn, or Queens to see them? Come on! Plus any hockey fans in either borough are already Rangers fans. Your not going to get any Rags fans to jump ship no matter how bad they get. And as far as the LHP no one is saying anything about it which makes me think the bottom has fallen out. When Wang finally comes out of hiding to say something, it won't be good news..

  19. Well, as I still await an answer to Comment 18, here's some news. Just before noon at RXR Plaza todat, there was some sort of ceremony or announcement regarding the Long Island Marathon. Together for the photo op were Ed Mangano and Scott Rechler (RXR is the major sponsor for the marathon). One would think that if Rechler were still involved with the LHP he would not miss an opportunity to chat up Mangano about the status, etc. Kate Murray was not present and I wouldn't be able to recognize any of the TOH Board. We shall see if any news comes out of this. But I thought that witnessing Mangano and Rechler at the same event was worth posting here.

  20. Hey everyone....yes, I know I've disappeared. A combination of tons of work to do and not much to write about, but that's a matter for a different day...

    Anon (China): It could have something to do with it, but the short answer is that Charles Wang has been very active in growing hockey in China and likely wants to keep moving in that regard. Also, since the franchise is losing money, it was probably an issue of making more money too. That having been said, he will probably seek financing from overseas, and I'll get something about financing done.

    Day1 - you could very well be right. However, nobody is talking.

    toontock - You aren't wrong, and if nothing else this is why we waited 4 days after the first tip before running the story. My most reliable sources gave me that tip, I brought it to B.D., and we tried to go through the normal channels to get something to post. We were hoping that publishing this as the rumor it was would motivate someone at the Lighthouse to break the silence. As I've said before, they don't in and of themselves owe it to us to be honest, but if they built their whole campaign on engaging us in the public, then it becomes an issue.

    Anon (Indictment) - It was a rumor....haven't seen any confirmation that anything will come of it.

    mrlbem - I have no idea what that would entail. Charles Wang's running out the clock would probably motivate Nassau County to revoke the DDA and throw it back, but I have no idea if there are specific provisions in the document.

  21. prokhorov's ownership of the nets is on hold, first pending technicalities over the state assuming ownership of AY parcels, but now more interestly, possible prokhorov/mugabe connections. under REAL scrutiny (absent in stern's initial "backround investigation"), this avenue of inquiry could lead to others and spell trouble for that deal.
    if my theory of a possible wang/prokhorov arrangement of some sort has merit, the continued silence makes sense. i think this is more likely than that charles wang has totally muted himself simply in wait of TOH's comeback plan.

  22. isles 67, the Islanders started with NO fans in political Long Island in 1972. If they move into Brooklyn or Queens, they will start with some fans already. Also with better public transportation they will be able to get more fans in the long run. Did anyone hear Bettman's interview on wfan? Apparently a "little birdie" for either Boomer and Carlin claimed that the Islanders have been talking with NYC for a possible relocation to Queens. Bettman said that the "birdie's way premature". This likely means that the birdie's revealing the discussions way too fast, but NOT a wrong fact. IF Bettman either knew that the discussions have not taken place or does not know about it, he could have said either "the birdie should consider his source" or " the discussions have not occurred to my knowledge".

  23. jae, not sure what you mean by the islanders started "with no fans in political long island in 1972." if you mean he local republican operatives and bullies didn't want them because it wasn't their franchise, i wasn't paying attention to that stuff at that age so i'm not sure about that. but in those days that machine was pretty much all-powerful. if they didn't get a piece of the pie and acquiesce, there would not have been the islanders. and they did. if you mean the new team simply didn't have a lot of fans, that's not quite right. it did take a while for average attendance to rise to league standards, and it took a competitive team to get them there - 1975. but there was always a rabid core base of islander fans adequate to support the team. it was not so different as now. this team needs to win in order to ensure big attendance figures. and i have always maintained that, while a new arena is obviously manditory, a team that competes for the cup would sell out if they played in dutch lane sump. this is why it bugs me how the owner went about seeking the arena before he had a consistent, solid franchise. they basked in the aftermath of isles-toronto, 2002, thinking that was good enough, and set about the project thereafter. more resources and better judgment in the way of team building FIRST and there would be no LH argument now. the thing would be done. but as they say, that's water under the damn bridge. your point about a ready-made fan base in brooklyn is right on though. i live in the AY hood. there are tons of people, young, not so young, local born and bred, transplants from all over, that would adopt this team the second it dropped anchor. i believe it's a potential gold mine, and imagine the islanders/rangers rivalry with the brooklyn/manhattan tag? whoa!

  24. if they dont ok the light house and they dont get this thing done , then i will no longer be a fan of long island because my life has revolved around the islanders , there basically taking my family from me. If they were to build a new arena i would become a season ticket holder , but no in that place , its so old , look at what mario did for the pensss. lets get the lighthouse up and keep our family close, thank you from your number one isles fan everrrr