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Nassau County Seeks Private Funds to Rebuild Islanders’ Home

Aug. 2 (Bloomberg) -- Nassau County Executive Edward Mangano called for proposals to build a new home for the New York Islanders hockey team with private funds, a day after voters rejected using public financing.

Mangano, who lost control of the county’s fiscal affairs to a state oversight board in January, said plans to redevelop the 77-acre site encompassing Veterans Memorial Coliseum must create jobs, add to residents’ quality of life and generate revenue.

“The democratic process here has spoken that the people of Nassau County do not have the appetite to risk their dollars with that type of public financing,” Mangano, a 49-year-old Republican, told reporters in Mineola, the county seat. “We’ll just move forward with another model.”

Residents voted down a proposal yesterday to issue $400 million in general-obligation bonds to finance a replacement for the 39-year-old Coliseum in Uniondale. The National Hockey League team’s owner, Charles Wang, said yesterday the defeat left him “heartbroken.” He has threatened to move the team when its lease expires in 2015 if the structure isn’t revamped.

Mangano, who has fired 128 workers and frozen wages as he copes with a budget deficit, garnered Tea Party support with his appeals for less spending and lower taxes.

‘Deeply Concerned’

He championed the arena project even as the oversight authority said it was “deeply concerned” by the proposal for the county, which it estimates will face a $225 million budget gap next year.

County Comptroller George Maragos said last week that Nassau may end 2011 with at least a $42 million deficit, and that the hole may grow to $140 million.

In an e-mail, David Hochman, an Islanders spokesman, declined to comment on whether Wang would explore a new plan using his own funds. The team’s games draw the fewest spectators in the league.

Had the referendum passed, the bonds would have required approval of the Nassau Interim Finance Authority, the state supervisory panel that took over after determining the county’s budget had a deficit of more than 1 percent, as well as a two-thirds vote by the county Legislature.

Interest Payments

According to NIFA, interest payments on debt for a new arena over 30 years would have pushed the total cost to $800 million, which would be paid through a property-tax increase of 3.5 percent to 4 percent.

Arenaco Spe LLC, a company formed by Wang, who bought the Islanders in 2000 for about $190 million, would have paid no rent until construction was complete, NIFA said. That may have taken five years and required more borrowing, it said.

“NIFA is hopeful that one result of the failure of the referendum is that the leadership of the county will now devote all of its energies and efforts into balancing the county budget,” the board of directors said in an e-mailed statement today.

Nassau’s median property tax of $8,206 is the second-highest among U.S. counties, behind only Hunterdon County, New Jersey, according to the Tax Foundation in Washington.

The Islanders won four Stanley Cup championships from 1980-83 and made the playoffs in 15 of their first 18 seasons after joining the NHL in 1972. The franchise hasn’t won a playoff series since 1993.

The team ranked last in the league in attendance for three of the past four seasons. It averaged a league-low 11,059 fans for its 41 home games last season, when it finished with the fourth-worst record in the NHL.

To contact the reporter on this story: Esme E. Deprez in Mineola, New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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