Islanders -- Lighthouse project

[kdb209]

The "deadline" was just for Wang to amp up pressure with.

If he had a Yes by Oct. 3, great. But he knew damned well there wouldn't be a "no." There won't be a no until the SMG lease expires. Nassau gave the Islanders an out... if he gets told he can't build, the county will void the SMG lease and they can leave before 2015.

I do not believe that this is the case.

The lease will not be voided - under the terms of the Lighthouse Development MOU it could be condemned and aquired by the County and all rights and obligations assigned to Lighthouse.

AIUI, without ToH approval the Lighthouse development agreement does not go into force - there would be no lease extension beyond 2015 and the County would have no obligation to condemn the lease.

And, even if they did condemn the lease under the MOU, Lighthouse/Wang/Rechler would assume all of the obligations for the remaining term of the lease - including the specific performance clause (upheld by the NY Supreme Court in 1998) which binds them to play at NVMC.

If the Lighthouse development dies because of ToH - the current lease binds Wang (or anyone else he sells to) to the Mausoleum thru 2015.

If the Lighthouse development is approved, the lease is extended, and either amended by SMG or condemned/assigned to Lighthouse.

There is no get-out-of-lease-free-card in play here.

 

[Macke*]

So is this going to get done or not?

I've been hearing Dooom for the longest time..can we get some good news here?

 

[KevFu]

I do not believe that this is the case.

The lease will not be voided - under the terms of the Lighthouse Development MOU it could be condemned and aquired by the County and all rights and obligations assigned to Lighthouse.

AIUI, without ToH approval the Lighthouse development agreement does not go into force - there would be no lease extension beyond 2015 and the County would have no obligation to condemn the lease.

And, even if they did condemn the lease under the MOU, Lighthouse/Wang/Rechler would assume all of the obligations for the remaining term of the lease - including the specific performance clause (upheld by the NY Supreme Court in 1998) which binds them to play at NVMC.

If the Lighthouse development dies because of ToH - the current lease binds Wang (or anyone else he sells to) to the Mausoleum thru 2015.

If the Lighthouse development is approved, the lease is extended, and either amended by SMG or condemned/assigned to Lighthouse.

There is no get-out-of-lease-free-card in play here.

That makes sense. But again, it's moot. Because even if there was one, they wouldn't be able to use it.

 

[CREW99AW]

How can you talk about Brooklyn when the shovel isn't even in the ground yet(and possibly won't be)?

If the legislature doesn't approve Wang's new lease,it means Wang can opt out at any point before the current lease expires in 2015.All he would have to do is wait until the Brooklyn/Queens/Suffolk arena is ready for the isles,then use his opt out clause.


About 2 weeks ago the NY Times reported that Ratner received final state approval to build his arena in Brooklyn,that he wants to sell majority ownership of the Nets to a Russian billionaire and he's still got some of the NIMBY crowd trying to throw up roadblocks.

Now Botta (and I think the NY Daily News), are saying Ratner's group wants the Isles to join them in Brooklyn.They think having two pro teams in the arena will help push the project through.

 

[CREW99AW]

I do not believe that this is the case.

The lease will not be voided - under the terms of the Lighthouse Development MOU it could be condemned and aquired by the County and all rights and obligations assigned to Lighthouse.

AIUI, without ToH approval the Lighthouse development agreement does not go into force - there would be no lease extension beyond 2015 and the County would have no obligation to condemn the lease.

And, even if they did condemn the lease under the MOU, Lighthouse/Wang/Rechler would assume all of the obligations for the remaining term of the lease - including the specific performance clause (upheld by the NY Supreme Court in 1998) which binds them to play at NVMC.

If the Lighthouse development dies because of ToH - the current lease binds Wang (or anyone else he sells to) to the Mausoleum thru 2015.

If the Lighthouse development is approved, the lease is extended, and either amended by SMG or condemned/assigned to Lighthouse.

There is no get-out-of-lease-free-card in play here.

kdb209 I believe you're wrong here.

On Oct. 2,2009 Wang and Souzzi signed a new lease agreement.The Nassau County legislature has 120 days to approve the new lease.If they don't,Wang has an opt out clause that he can exercise.He can move the team immediately if he wants.



http://www.allbusiness.com/government/government-bodies-offices-regional/11995156-1.html
Once the county executive submits a lease for the 150 acres of county-owned property, the legislature has 120 days to approve it. If it doesn't, the team can leave.

 

[kdb209]

kdb209 I believe you're wrong here.

On Oct. 2,2009 Wang and Souzzi signed a new lease agreement.The Nassau County legislature has 120 days to approve the new lease.If they don't,Wang has an opt out clause that he can exercise.He can move the team immediately if he wants.



http://www.allbusiness.com/government/government-bodies-offices-regional/11995156-1.html
Once the county executive submits a lease for the 150 acres of county-owned property, the legislature has 120 days to approve it. If it doesn't, the team can leave.

You are correct - the MOU seems to be trumped by an agreement signed between Wang and the County in 2007.

Here is a link to the original Newsday article referenced in the KC Star piece:

http://www.newsday.com/long-island/wang-options-open-on-islanders-relocation-1.213

Wang: Options open on Islanders' relocation

February 24, 2009 By EDEN LAIKIN; Staff writer Anthony Rieber contributed to this story.

...

Wang - speaking publicly for the first time since speculation emerged early this year about possible relocation of the team - said that an agreement he made with the county in 2007 to renovate the 36-year-old Coliseum and develop the area around it includes language that gives the team an out: Once the county executive submits a lease for the 150 acres of county-owned property, the legislature has 120 days to approve it. If it doesn't, the team can leave.

Sources close to the deal say the language is insurance for Wang and partner Scott Rechler, who will already have spent millions on the application process.

Here is a blog with some discussion of Thurs lease signing and the previously agreed to "Out Clause":

http://lettherebelighthouse.blogspot.com/2009/10/drawing-line-in-sand.html

Thursday, October 1, 2009
Drawing a Line in the Sand

Earlier this afternoon, County Executive Tom Suozzi (pictured, flanked by Legislators Diane Yatauro and Wayne Wink, and Lighthouse principals Charles Wang and Scott Rechler), announced the signing of a 99-year ground lease on the 77-acre County-owned Coliseum property with the Lighthouse Development Group. The announcement was filled with a lot of drama, a firm line in the sand, and even a little news.

Other people can mention direct quotes, and I don't want to re-do their work. I'll just share some key themes and take-aways.

Lease Terms

The Town of Hempstead, which, as you remember, made some requests of the County and the developer, did not get all it wanted, but there were pieces in there that satisfied many of the Town's wishes. The terms are as follows:

* 99-year ground lease between the Lighthouse Development Group and Nassau County. This covers the 77 acres of County-owned land on which the Coliseum sits, not the other 73 acres of Rexcorp-owned land that Scott Rechler added to the project.
* The Lighthouse commits $50 million to improve area infrastructure
* The Lighthouse will pay Nassau County $1.5 million per year as part of the ground lease
* The Lighthouse will assume maintenance costs on Nassau Coliseum, on which the County currently loses $1.5 million a year. Before sales and income tax, this comes out to a net positive of $3 million for Nassau County taxpayers.
* The Lighthouse commits to a Project Labor Agreement with local labor unions that will pay a prevailing wage
* The Islanders commit to remain in a renovated Nassau Coliseum through 2030, 5 years later than the original plan.

The Town of Hempstead is not a third-party beneficiary of the lease. Marilyn Gottlieb, Deputy County Executive who has overseen this process for Mr. Suozzi, told me that the County, as policy, does not do this for anybody.

The "Out Clause"

County Executive Suozzi said that he would submit the lease to the County Legislature immediately, and this could become an issue should environmental review continue to drag on. As previously reproted, the Islanders are able to void the lease and leave the area if it is not approved by the legislature within 120 days - let's hope it doesn't come to that.

However, the full details of the lease agreement have not been announced - so there are some caveats w.r.t. the Out Clause.

The Out Clause (as reported - I've seen no official documents with details) only pertains to approval of the lease by the County legislature. It does not require ToH rezoning or site plan approvals. It is possible that the lease could be conditional on ToH approvals, allowing the legislature to approve it - pending ToH actions - taking the Out Clause off the table.

An earlier Let There Be Light(house) blog entry makes that same caveat:

http://lettherebelighthouse.blogspot.com/2009/09/nassau-county-increase-your-role.html

Out Clause

Reader BR remembered whispers about 7 months ago of an out clause in the Islanders' lease agreement, and he is correct. According to Charles Wang, the Lighthouse and the County reached an agreement in 2007 that provides the New York Islanders with an out clause in their lease with Nassau County, currently scheduled to expire in 2015. However, the out clause puts the onus solely on Nassau County and has nothing to do with the ongoing re-zoning negotiations with the Town of Hempstead. According to the out clause, as is my understanding, the Nassau County Legislature has 120 days to approve the new lease agreement after Tom Suozzi submits the agreement. If approval does not occur by then, the Islanders' lease is considered null and void.

Most of this lease is not news to people, and it has in fact been largely complete for months. This is largely a timing play given that Mr. Wang's October 3 deadline is now a week away, and it puts full pressure on the Town of Hempstead to see the process to completion.

What I'm saying is just speculation right now. As readers have pointed out, re-zoning approval has to happen before any use of the land (and the lease) can commence. However, there are ways to get around this: there could be an agreement with certain conditionals in it, such as becoming void without re-zoning, or terms that are invoked based on what the Town of Hempstead approves. I am working on getting some information, and I will report whatever I find.

 

[CREW99AW]

http://lettherebelighthouse.blogspot.com/



However, the full details of the lease agreement have not been announced - so there are some caveats w.r.t. the Out Clause.

The Out Clause (as reported - I've seen no official documents with details) only pertains to approval of the lease by the County legislature. It does not require ToH rezoning or site plan approvals. It is possible that the lease could be conditional on ToH approvals, allowing the legislature to approve it - pending ToH actions - taking the Out Clause off the table.

An earlier Let There Be Lighthouse blog entry makes that same caveat:

I thought it was more cut and dried.

 

[kdb209]

I thought it was more cut and dried.

Unfortunately - we really don't know.

All reporting I've seen on the Out Clause all seems to be sourced from that same original Laikin piece in Newsday. There is little/no other information available.

 

[LadyStanley]

http://www.tsn.ca/nhl/story/?id=293659

CP story on Wang considering all options now that his deadline has come and gone without a response from TOH. And apparently he has a meeting scheduled with Murray this coming week. But he's disappointed to read details of phone calls to the supervisor making it into print.

 

[KevFu]

at the end, Wang joked about learning Russian.

This is significant because the dude who just bought the NJ Nets is a Russian billionaire. As you remember, the Nets are planning on moving to Brooklyn, and according to Botta approached Wang about Brooklyn.

If Brooklyn gets a shovel in the ground, expect Wang to "be close to a deal to move the team to Brooklyn" and then for the Lighthouse to be approved in the 11th hour.

 

[KevFu]

Newsday story begins: "The luring of the Islanders is officially underway."

Queens Chamber of Commerce VP says Wang should look first at Queens.

(he) believes a potential new home for the Islanders would fit perfectly as a centerpiece in the city's plans for the Willets Point area. The project is still in the early stages; Friedman said ground-breaking probably won't take place for another four or five years.

But the Islanders' lease with Nassau County stipulates that they must play their homes games through 2015, so the team is still six seasons from a potential move, anyway.

 

[NYIsles84]

This is not true. I don't get how even Newsday reporters don't have the information that if the TOH says no to the project, Wang had it stipulated in a contract that after 90 days from there, he would be able to leave the Coliseum immediately. The 2015 lease at this point means nothing. It all comes down to now if it is approved, the lease goes to 2030, if denied, they are able to leave right now.

Newsday story begins: "The luring of the Islanders is officially underway."

Queens Chamber of Commerce VP says Wang should look first at Queens.

(he) believes a potential new home for the Islanders would fit perfectly as a centerpiece in the city's plans for the Willets Point area. The project is still in the early stages; Friedman said ground-breaking probably won't take place for another four or five years.

But the Islanders' lease with Nassau County stipulates that they must play their homes games through 2015, so the team is still six seasons from a potential move, anyway.

 

[KevFu]

This is not true. I don't get how even Newsday reporters don't have the information that if the TOH says no to the project, Wang had it stipulated in a contract that after 90 days from there, he would be able to leave the Coliseum immediately. The 2015 lease at this point means nothing. It all comes down to now if it is approved, the lease goes to 2030, if denied, they are able to leave right now.

The denial will not come from the ToH until the last possible second.

If there's anything they are good at, it's dragging their feet.

 

[BrooklynCapsFan]

Nothing substantively new, but a little cheerleading from the borough's head cheerleader, Marty Markowitz.

Markowitz wants the Islanders.

 

[David_99]

Markowitz wants the Islanders.

"Boland said even if the Islanders shun Brooklyn, ten other NHL franchises are considering moving."

Nice of him to throw this little bit in as fact. And is he really suggesting 4 NHL teams in the NYC area?

 

[KevFu]

Nice of him to throw this little bit in as fact. And is he really suggesting 4 NHL teams in the NYC area?

10 teams? He only has a pool of 13 to choose from as teams with a remote chance of EVER moving (besides the Islanders, who'd be shunning them).

Either way, Brooklyn and Queens competing for the Islanders is a GREAT thing. We need them to get in a bidding war ("Ok, rent free and you get all the revenue from suites... we take concessions only!"), and of course for that to light a fire under the ToH for the Lighthouse.

 

[Jeffrey93]

Ok, I've just recently started tuning into this news (was previously occupied with the Coyotes issue).

What are the odds this team will relocate away from the NYC region? (Kansas City, Hamilton, Portland, etc.)

If Wang is declaring that he will entertain all possibilities, including relocation, it seems reasonable to me to assume that he has an out clause that can get him out of Long Island before 2015. Otherwise, relocation is a bit of a premature thought.

If he is stuck there until 2015 he wouldn't be making the relocation threats already. Would he?

Wang isn't a hockey guy....which makes me wonder if he would sell the team, or relocate the team and then sell it, to a buyer from outside of New York State.

We know Kansas City is looking for a major tenant (either NHL or NBA) for their new rink....and we know that there is a Hamilton, ON interest lurking...in addition to Balsillie's obvious interest and enormous amount of cash.

So....maybe this was covered already (big thread)....but what do you guys think the chances are this team could move....a lot farther than Brooklyn or Queens?

 

[MaskedSonja]

So....maybe this was covered already (big thread)....but what do you guys think the chances are this team could move....a lot farther than Brooklyn or Queens?

I've been following the thread generally, I don't think it goes outside of NY, IMO. From what I'm reading there is serious competition in NY for the team. I agree with the posters that it will probably be a last minute agreement for the Lighthouse project-losing the team and it's history-I would think the public pressure would be too much on top of it all.

There ARE a lot of numbers involved, though, and I was never good at math

 

[TaketheCannoli]

Ok, I've just recently started tuning into this news (was previously occupied with the Coyotes issue).

What are the odds this team will relocate away from the NYC region? (Kansas City, Hamilton, Portland, etc.)

You can never say never, but I believe Wang is posturing to force the issue. Pretty standard in the sports world. New York is a lucrative market. If Wang can get a lease with a decent revenue stream, this team won't leave NYC. The current lease is as bad as the Winnipeg Jets lease.

I'd be shocked to see a franchise in any new city in the next five years.

 

[LadyStanley]

Wang <3 the Islanders. I think he's grown to love the game.

But he cannot continue in a non-upgraded venue.

He's found a way (the Lighthouse project) to do a major upgrade of the current venue, without any governmental funds.

Yet one local official and locality is delaying everything.

So, Wang set a 10/3 deadline. He was supposed to meet with Murray this past week, but I haven't seen anything resulting from that meeting.

He needs 3-4 years to allow for renovations to be completed *prior* to the current lease's expiration date in 2015. (Or find and build a new arena, competition for the NMC.)

 

[KevFu]

Ok, I've just recently started tuning into this news (was previously occupied with the Coyotes issue).

What are the odds this team will relocate away from the NYC region? (Kansas City, Hamilton, Portland, etc.)

If Wang is declaring that he will entertain all possibilities, including relocation, it seems reasonable to me to assume that he has an out clause that can get him out of Long Island before 2015. Otherwise, relocation is a bit of a premature thought.

If he is stuck there until 2015 he wouldn't be making the relocation threats already. Would he?

Wang isn't a hockey guy....which makes me wonder if he would sell the team, or relocate the team and then sell it, to a buyer from outside of New York State.

So....maybe this was covered already (big thread)....but what do you guys think the chances are this team could move....a lot farther than Brooklyn or Queens?

Long story short, Wang made the "deadline" right when the team was announcing a preseason game in Kansas City. He put that deadline on October 3, the date the Islanders played their home opener and would debut Tavares.

He pretty much was using these dates for the biggest media/PR hit possible. He was trying to whip as many fans (aka VOTERS) into a frenzy and pepper politicians with pressure to put through the Lighthouse.

His goal is moving into a new home ASAP.

Technically, there IS an out-clause, but the politics involved are such a big factor, and there's virtually zero chance he has the opportunity to exercise that clause.

This isn't JUST about an arena. An arena could make the TEAM profitable, but not profitable enough for him to recover his losses. He'd be $850 million in the hole if he just built a new arena with zero chance of recovering all he's put into the Islanders. The project he wants to build would recover so much revenue, he can build a new arena himself.

The odds of the Islanders moving out of the NYC area are remote.
For that to happen:
#1 - The Lighthouse Project (his real estate venture he's trying to build) would have to be blocked by the Town of Hempstead, when Nassau County and the State of NY have already backed it so fully, they have agreed to lease terms on the land.

#2 - The Nets arena in Brooklyn (The Barclays Center) would have to be either (a) killed completely or (b) built without an NHL rink, and the Borough of Brooklyn has already said they want the Islanders. They could apply pressure to the developers to include the rink/Islanders

#3 - Queens would have to fail in their bid to lure the Islanders. They are trying to develop the area near the Mets CitiField, and are planning on a convention center/civic arena. Their place faces hurdles and the timeline is moving a little slow for 2015, but...

The Islanders TV contract is SO massive, that staying in NY is the #1 priority for the franchise. In a new NY area arena, the Islanders could get to top 4 in revenue in the NHL with a good lease (and a bidding war between Brooklyn/Queens/Nassau could lead to one).

In KC, they could be about like St. Louis in revenue. Which isn't bad, but in New York, they could be almost the Rangers.

 

[Dugray]

Report: Lighthouse Project Abandoned?

http://sports.yahoo.com/nhl/blog/pu...-Report-claims-Isles-arena-pro?urn=nhl,196001

 

[LadyStanley]

http://sports.yahoo.com/nhl/blog/pu...-Report-claims-Isles-arena-pro?urn=nhl,196001

From article:
This latest move could seem like doom and gloom for the Islanders future at Nassau Coliseum, yet it could also be another move in the game of political chess that Wang has been playing with the Town of Hempstead for the past five years.

 

[Dugray]

From article:
This latest move could seem like doom and gloom for the Islanders future at Nassau Coliseum, yet it could also be another move in the game of political chess that Wang has been playing with the Town of Hempstead for the past five years.

As of this posting there is still no word from Wang or the top people at the Lighthouse Project to confirm whether or not it's true. But if it isn't true and it's just some ploy by Wang I think it's a cruel one at the expense of the many fans who are waiting with bated breath to find out whether or not this will go forward or not.

Edit: Fischler of MSG reported it during the intermission report of the NYR/LA game.

 

[Bob1321]

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