(The following is a reformatted version of a statement from
Nassau County Executive Edward P. Mangano, received via e-mail
and confirmed by the sender.)
August 15, 2013
STATEMENT FROM NASSAU COUNTY EXECUTIVE EDWARD P. MANGANO:
Today marks a historic public-private partnership in Nassau
County history as I announce the construction of a 100%
privately financed Coliseum that will share revenue with the
County at zero expense to the taxpayer.
The foundation of today’s success is credited to two industry
giants, The Madison Square Garden Company (MSG) and Nassau
Events Center, LLC an affiliate of Forest City Enterprises, Inc.
(NEC) who competed in a challenging process resulting in the
submission of two excellent proposals. In fact, it was the
unanimous sentiment of the RFP committee that in most regards
both MSG and NEC had submitted compelling proposals. Both had
the financial and managerial capacity and expertise to
successfully execute a meaningful development of the Coliseum
and construction of the adjacent Plaza bringing new and exciting
economic rejuvenation to the HUB. In that regard, I want to
thank Hank Ratner and his staff as well as Bruce Ratner and his
staff for their commitment to Nassau County. I truly wish we
could engage both proposers. Just before today’s announcement I
spoke with both Bruce Ratner and Hank Ratner and thanked them
personally for their great proposals and professionalism
throughout the process. Today, I announce the proposer who
provided the best opportunity for Nassau County residents; one
that will create jobs and opportunities, one that generates the
greatest revenue for the County and completely relieves the
County of costly capital expenditures.
I am pleased to announce that Nassau Events Center, LLC is the
successful proposer to transform the 43-year old Nassau Veterans
Memorial Coliseum and Plaza into an attractive, first class
destination for family fun, sports and entertainment. This is
also the unanimous recommendation of the County’s RFP Committee.
Accordingly, I will soon send the NEC lease to the Nassau County
Legislature which is the next step in the approval process.
NEC will invest a minimum of $229 Million in renovating the
Coliseum and the Plaza to create a first class destination.
During the initial 34 year lease term, Nassau County will
receive 8% of gross revenue, 12.75% of parking fees with a
minimum guaranteed payment of $4 Million a year escalating by
10% every five years, resulting in a minimum lease term payment
of $195 Million to the County. With options exercised, the
minimum lease payment grows to $334 Million. Similarly, the
Plaza area, now concrete, will be transformed and will generate
the greater of $400,000 a year in rent or 8% of the gross
revenue. In addition, Nassau County maintains rights for future
development on the site.
Although the decision was not easy, there were points that the
Committee emphasized when recommending NEC and, in an effort to
continue an open and transparent process, I would like to share
them with you all today. They are:
1. NEC has agreed to accept all costs and responsibility for
operating, insuring, maintaining and providing utilities for the
Coliseum beginning on August 1, 2015, which is when the current
lease expires. This was viewed as providing a direct financial
benefit to the County by eliminating millions of dollars in
annual expenses for utilities, parking lot repairs and capital
expenditures. Utilities alone cost Nassau over $2,000,000 last
year. This will relieve the County from shouldering these
expenses during the period when the developer will be seeking
approvals, designing the various improvements, constructing and
operating the Coliseum and Plaza area.
2. The NEC proposal includes the payment of rent during the
preconstruction approvals period and the actual construction
period, commencing on August 1, 2015. It is estimated that this
will yield a positive cash flow to the County in the first two
years of over $2,000,000 while shedding millions in expenses.
3. The minimum annual rent paid by NEC upon completion of
construction for both the Coliseum and Plaza Improvements is
$4,400,000, or $1,400,000 per year more than MSG’s proposal. In
addition, the minimum rent under the NEC proposal escalates at
the rate of 10% every five years, versus the MSG proposal of
escalation of 5% every five years. Rent under the NEC proposal
is calculated based on 8% gross revenues yielded by both the
Coliseum and Plaza Improvements plus 12.75% of parking revenue.
This was viewed as more beneficial to the County than the MSG
proposal which is based solely on $1.50 per ticket sold. Under
each proposal, there is a credit against minimum annual rent
equal to the amount of the ticket tax paid to the County.
4. According to the County’s financial adviser, Public
Financial Management, Inc. (“PFM”), the total minimum rent
payable over the initial 34 years of the lease is $112,109,840
for MSG, versus $194,522,894 for NEC. This was regarded by the
Committee as providing a significant factor for selection of NEC
5. Under the NEC proposal, the County retains control over any
future development of the Coliseum site.
In conclusion, the Committee viewed NEC’s willingness to accept,
at Islanders/SMG lease expiration, immediate financial and
managerial responsibility for the Coliseum at its sole expense,
to pay rent to the County before and during construction, and to
pay a measurably higher annual minimum rent with higher
escalations as primary characteristics that contributed to
distinguishing NEC’s commitment and confidence from the proposal
submitted by MSG.
Tomorrow I will join with NEC to announce exciting programming
and further comment on this historic public-private partnership.
Contact: Katie Grilli-Robles, Press Secretary (516) 571-4225
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