A Tale of 2 Headlines (Plus, More Reports and What We Can Do)

Dave knocked it out of the park with a fantastic review of the lease between Nassau County and Charles Wang's Arenaco LLC, but right now we have a few other things to get to.

First - What We Can Do

The areener referendum is vastly different from the Lighthouse process because the special election affords us knowledge of exactly what we can do and how to do it.

Letters to the Editor are a great way to get our opinions out into a more general audience (everyone remembers my very famous letter to the editor from 2 years ago....), and the Islanders have taken the liberty of putting together an easy primer to help you get your letter to the right person.  As always, feel free to shoot an email if you'd like a proofread of your letter.

In addition, I've talked to a few people, and I want to get your opinion on this.  Would you be willing to phone bank and make calls to people in Nassau who've purchased tickets at Nassau Coliseum to drive up yes votes?  I mentioned it to some people but want to gauge interest.

Don't Fear the Areener

This coming Wednesday, July 27, at 4 PM, there is a big outdoor rally at Nassau Coliseum to support the areener.  Blue Oyster Cult will be playing a free concert, though it's unclear who will be playing cowbell (I'd like to volunteer).

In fact, I had a Twitter discussion on Friday...we should bring a sea of cowbells to support the referendum.  Cowbell up!

A Tale of Two Headlines


On Thursday, County Comptroller George Maragos released his report (separate from the OLBR report, which had another interesting tidbit in there that I'll get to later) on the areener situation.

Maragos' report is overall positive, and he makes common-sense requests that, if done, would make it "a good deal" in his estimation.

First, Maragos wants Charles Wang to be responsible for any cost overruns, as he fears the areener will cost more than the allotted $350 million (as Dave pointed out, this is already written into the lease, and people I've spoken to who are close to Charles Wang see no issue with doing this).

Second, George Maragos expressed concerns that "Arenaco LLC," which Charles Wang recently incorporated to manage the new areener, is a shell corporation with no assets of its own.  Maragos believes it is important for Wang and the Islanders to guarantee the payments for which Arenaco is responsible, in order to provide the highest level of protection for taxpayers.

Third, Maragos noted that the current lease deal gives Charles Wang development rights on the property and suggests an RFP (again).

In addition, Maragos mentioned the Camoin report and the OLBR report, both of which were highly positive on the areener, saying the numbers were optimistic but not unrealistic at all.  That's an important step as it once again validates the studies we've seen.  In fact, the OLBR report, which suggested that the areener could cost taxpayers $13.80 a year, also suggested the maximum exposure (if there is no lockbox and revenues are not used to offset new taxes) is $51.50, not the originally-calculated $58.

It's important to realize 2 major things about the Maragos report: He is not asking for anything unreasonable, and many of the changes he suggests are actively being negotiated.  For the first time since the Democrats launched their anti-areener campaign (and don't kid yourselves - Jay Jacobs penned the "Vote No" op-ed in the Herald this week), I see a path to this being built (assuming passage).

Quick Aside


2 more very fascinating numbers came out of the Camoin Associates report that was prepared for Nassau County.  The report was more optimistic than the OLBR report, stating that if the revenue projections, which Maragos has called "optimistic but not unreasonable," pan out, residents could see a tax SAVINGS of $26.81 per household per year.

In addition, we finally have a quantification on the cost of doing nothing: $16 per household per year.

It's important to note that this report only looks at tax revenue, and not the overall impact on jobs and the economy (which was already pegged at 2,660 jobs lost and $243 million lost from the economy every year).  Residents are faced with a truly stark decision:

$13.80 (assuming a lockbox), or tax savings....for something.

or

$16 for nothing.

Let's get the word out and make sure Long Island makes the right choice.

Fun With Headlines

Now, here's where the fun starts.  Newsday originally posted an article about the Maragos report with this headline:

Both Dave and I had been ratcheting up criticism on Twitter, and we were heartened to see the $13.80 was finally covered.  This seemed like an even better step forward in terms of framing of the issue.

Then, later in the night, the headline was changed:

And to make matters more interesting, the article itself was re-written to sound more negative, including quotes from Desmond Ryan (who finally exposed himself as wanting the development rights for his cronies, which I've been saying all along was the source of his vicious opposition to this project that he didn't have the guts to declare to Chris Botta back in May).

I and many others were naturally outraged, and we started hammering with more criticism of the framing of this issue.  That's where this gets interesting...

They changed it back.

Either way, we have had a good few days for the areener, including major endorsements from unions.  I don't blame the County workers' union for endorsing but not explicitly instructing members to vote yes because the County recently cut jobs and he's in a tough position between management and the rank and file workers.  I'm fine to give that a pass.

Let this be a lesson: pressure does work if it's coordinated and based on fact.

Moving Forward


Expect a formal endorsement of a voting position on Sunday morning, and an announcement of my plans for Election Day on Monday.  I'm also planning a look at 3 huge logical fallacies underpinning reports that the Islanders leaving and Nassau Coliseum shutting its doors will not have that bad an effect on the economy.  Dave will continue his amazing series of deep dives into the documents and reports, and we hope to have some great information for you.

Bottom Line


The vote is 9 days away.

Last stand at the OK Corral.

As Chris Botta reported, the "concerned citizens" of the Association for a Better Long Island are sharpening their knives, ready to release a media barrage blasting this plan to high heaven (Ironically - go look at their web site....there's still a Lighthouse Project rendering in the flash montage at the beginning of the site).  Polls are due to come out over the next several days (also according to Botta), and despite my previous insistence that polls are untrustworthy, they will show the vote to be close.  I wouldn't at all be surprised if one poll said the No votes were in the lead.  We've seen vandalism of Vote Yes signs (reader Scott says signs he put up in Levittown were vandalized, and I had a Vote Yes sign stolen off my lawn), so please do not kid yourselves.  The opposition exists.

However, there's a bigger truth, like my friends at The Community Alliance love to say: The only poll that matters is the one on Election Day.

As I've said before, let's leave it all on the ice and let everyone know that we will fight to the end.  We can't take this or anything for granted in terms of the vote.

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Updated Numbers, Criticisms, and a Big Retraction (Al Gore Weeps)

Hey everyone, a few things to go over, and the post frequency is going way up through the referendum date (as you'll see).

EDIT 7/20/11 1:30 PM: Apparently we misunderstood yesterday.  The Office of Legislative and Budget Review released its report, but it's different from the Maragos report, which will supposedly come out tomorrow.  Correction made.

Retraction and Sincere Apology

After re-reading the referendum language, I need to retract the part about the lockbox, because it is apparently not created under the referendum.  I apologize deeply for this misunderstanding, and in the meantime I want to re-iterate my call that there should be a lockbox.  Assuming the referendum passes, there will probably need to be some changes in the agreement to get it through, and I hope this is one of those changes.

Somewhere, Al Gore is crying..and continuing his fruitless quest for Manbearpig.  I'm super, duper serial.

(Blogger's Note: If you didn't get that, I promise I'm just referencing something.  I haven't gone insane....at least not in that way)

Introducing Dave

Dave, known as DP'sknee(andhipandflubugandotherknee) on Lighthouse Hockey, is joining as another writer.  He has a ton of great insight and viscerally gets all the factors going into this.  He'll probably post something tomorrow, but until then you should follow him on Twitter for his fantastic tweets.

2 Anti-Areener Reports

Recently, 2 different groups have publicly released their reports questioning the areener plan, making Wet Hot Areener Summer a little wetter and hotter in the process.  

First, NIFA, which is ratcheting up its criticism of the referendum (despite not reviewing all details so far), released a report available online detailing its concerns with the process.  They will continue to be a tough nut to crack moving forward.

Second, the Association for a Better Long Island continues to embarrass itself and prove what a misnomer its name is.  An independent consultant released a barely-intelligible report criticizing the referendum, but that didn't stop News 12 from breathlessly reporting it as proof that the areener deal is a bad one for taxpayers.  Seriously, stop reading this post and go read that report....It would be funny if someone wasn't paid hundreds of dollars an hour to write it.

Met a No Voter Yesterday

Yesterday, at the post office, I encountered my first No voter.  He was one of the postal workers, and I happened to walk in there to mail a package while they were arguing.  The one postal worker couldn't believe it, and kept saying there was nothing not to like about the project.  The other one parroted the same lines we've heard for decades, so much that we could practically record them in advance.

"Let Wang pay for it!" (Yea, he wanted to....Kate Murray murdered that plan.  It's either that or this; can't have it both ways)

"There will be cost overruns!" (Wang is contractually obligated to pay those)

"TRAFFIC!" (Can someone please explain to me how replacing an arena with another arena creates gobs of new traffic?  Anyone?  Anyone?  Bueller?)

I had an interesting back and forth with the guy, and I hope he didn't send my package to Timbuktu as punishment, but this is what we're up against.  No voters are out there, and they refuse to let logic or facts interfere with things they know to be true, dammit!  As I've said from day 1, it's dangerous to take this for granted.

What's Truly At Stake

While NIFER was registering its objections to the areener (stick tap to Dave on that one - BRILLIANT), and Desmond Ryan was making himself look like a fool (though the medier is trying desperately to make him sound like a dispassionate and concerned citizen - don't fall for it), 2 other reports have come out showing what's truly at stake here.

First, Camoin Associates completed its assessment of the Coliseum referendum for the county (not Charles Wang, or some guy named Wong that the ABLI report cites) on the economic impact of the Islanders potentially leaving Nassau County.  According to this report, $243.4 MILLION A YEAR and 2,660 JOBS would disappear from the local economy.  

Second, Nassau County's Office of Legislative and Budget Review completed its report (which News 12 immediately distorted and Newsday has so far ignored).  This report claims that 74% of borrowing costs will be covered by projected revenues, leading to a maximum tax exposure (if nothing else is done) of $13.80 per household per year.

These numbers illustrate the danger in not truly understanding what's at stake and not having goals aligned.  For instance, ABLI, NIFER, and the media have breathlessly claimed the borrowing is $800 million, not $400 million, but this isn't true.  As I've pointed out in previous posts, there is a concept in finance called Time Value of Money, because money does not intrinsically hold the same value in perpetuity.  If I offered you $100 now or $100 in a year, you'd take it now, because $100 in a year has a present value of less than $100.

In the same vein, yes, the debt service is scheduled at $26 million a year, for 30 years, which in pure numbers totals $780 million.  However, due to interest rates and the time period, that cost in current dollars is lower....actually, around $400 million, the initial cost of the borrowing.  Let's not allow voters to be scared about this.

In addition, the recent saber-rattling from NIFER makes me concerned that their interests are not necessarily in line with the county as a whole.  As we know, NIFER is meant to guard the county's finances, so it must take those into consideration rather than pure economics.  It's possible that NIFER could be doing its job too narrowly and simply considering the costs of borrowing without considering the cost of losing the arena and the team to the economy at large.  This tension might become a flash point if the referendum passes, and I genuinely hope we can do something to stop it.

We have to fight the misinformation, including NIFER's scare-tactics over "Arenaco LLC" (a company set up by Charles Wang to manage the areener).  We can't get caught in nonsense like the fact that Charles Wang would be free to sell the Islanders after 2 years in the new building - the man is pushing 70, and as the owner he has the right to sell his asset when he decides he wants to sell!

At the end of the day, people are faced with a choice:

Do I want to provide a catalyst for restoring the can-do mentality to Long Island and hopefully leading to more good decisions?

OR

Would I rather have that 26 cents a week?

Honestly, abuse of the take-a-penny/leave-a-penny tray could cover that!  Our future is worth an investment.

Bottom Line

The areener process had its worst week since the roll-out back in May, and I wouldn't blame you for wondering if the media was suddenly out to kill the referendum.  However, as I've said from day 1, we have the power to fix this.

We can educate our neighbors (those willing to hear it, of course).

We can get out and vote.

We can get all our neighbors and friends who are yes votes to join us.

That's all we can do - we have to keep pushing back.

We're 13 days out now, let's leave it all on the ice.

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Legality < Margin

Hey everyone - I worked a brutal week last week, so I didn't have the time I thought I would to write.  I'm back, to the best of my ability.

We had a recent mini-controversy about the "areener" referendum, as some suddenly questioned whether holding the referendum was legal.  I find this pretty amusing on first blush, for 2 reasons.  First of all, as my last Underpants Gnomes themed post says, there are no details of the referendum, and the text hasn't yet been written by the clerk of the legislature.  It makes no sense to say that something which doesn't even exist yet could be illegal.  I'll defer to Legis. Denenberg on this one: the referendum vote is to determine whether or not to create a tax line to be used for paying the debt service, and it's still valid even if the bonding then fails.  Nothing to see here, folks....though I do find it interesting that Desmond Ryan, head of the hilariously named Association for a Better Long Island, is again in the middle of this.  After playing nice-nice with Chris Botta, he's then turned around and blasted these plans up and down....and nobody mentions that he is affiliated with major developers who would want the rights to the land themselves!  As a consulting client I've worked for says, that's not a believable source.  Reserve judgment until the details come, and they should be due any time.

However, when you consider the referendum, there is something much more important that we need to consider: turnout is key.

We've mentioned before that the referendum is not the be-all and end-all of whether or not a new arena is built.  There are still 2 steps after: the county legislature has to approve the bond issue with a supermajority, and NIFA needs to provide final sign-off on the bonding.

I've already mentioned that the details are important, the numbers must work, and there are politics at play as to whether Democrats would give Ed Mangano his super-majority in light of the serious questions raised 2 weeks ago.

Some say the bonding is a slam dunk if the referendum passes.

Not so fast.

Turnout on non-election days is notorious for being pathetically low on Long Island.  How many people do you know that vote for the school budgets that are stashed during the week in May or June every year?  In the same vein, turnout for the primary elections is usually very low, and some believe the referendum was scheduled on August 1 for a similar reason.

If the referendum passes, but turnout is below 10,000, could that really be seen as the "will of the people?"

If the referendum passes with less than 60% of the vote in favor, can this be considered a slam dunk?  Will NIFA have to accept it?

Not at all.

The truth remains: if people truly want this to pass, they need to drum up turnout and make this pass overwhelmingly.  This is the only thing that can't be explained away or rationalized.  That is the only thing those with final authority will listen to.

(Blogger's Note: This is a new idea - smaller posts to keep the flow going in between larger pieces, which is reflective of my reduced levels of free time.  Please let me know what you think)

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