Las Vegas Sands offers a new lease on life for Nassau

For decades, Nassau County has grappled with its ownership of the struggling Nassau Coliseum and the many acres that surround it. The county careened between mediocre leases that favored the tenant, tenants who didn’t always pay bills on time, and complications due to changes in management, ownership or economic circumstances.

Over and over again, Nassau failed to strike a lucrative economic development deal for one of the county’s largest and most valuable available tracts.

Tenant after tenant, lease after lease, that effort failed, leaving Nassau with a mostly empty parking lot, a bare minimum annual rent payment, and a scarcely used Coliseum that’s saddled with debt.

Now, there is another proposed lease with a new potential tenant. And the Nassau County Legislature must decide later this month whether to transfer the Coliseum lease from Nick Mastroianni II and his company, Nassau Live Center, to Las Vegas Sands, which wants to build a casino and 500-room hotel-resort complex on the site.

It’s a necessary first step. Whether Sands wins a license to build a casino at the Hub will be decided by the state at a later date. For now, county legislators must decide whether the lease transfer is the best possible deal and better than the current one with Mastroianni. Could this agreement lead to successful development, either with or without a casino?

LEASE WAS ALWAYS BAD

Here’s some important context: For decades, the Coliseum lease was part of an unforgivably bad deal with SMG, the management company that ran the facility until 2015, while the New York Islanders were its anchor tenant. The rent was paltry, the county was responsible for many costs, and the surrounding land remained vacant.

Since then, the lease changed hands multiple times, but the county never got a great deal.

Mastroianni is a middleman who, using EB-5 money from foreign investors looking for visas in exchange for their cash, was responsible for lending more than $100 million for the arena’s 2015 renovation — money he’s still owed. Any developer would have to pay back the Mastroianni loan to build anything there. The current lease includes a $4 million annual rent payment to the county — and Mastroianni is up to date in paying what’s owed. But the town and surrounding communities get no revenue.

The proposed 99-year lease with Las Vegas Sands, negotiated by County Executive Bruce Blakeman, provides Nassau with an immediate one-time $54 million nonrefundable payment, with no contingencies. Annual rent to the county starts at $5 million without a casino, and doubles to $10 million with one, with additional payments for public safety, whether or not a casino is built.

County revenue guarantees kick in if the casino is built, eventually reaching $50 million a year minimum. The Town of Hempstead would get at least $20 million annually. And a community benefits arrangement provides $4 million a year with a casino, and $2 million a year without one, to the surrounding neighborhoods, with at least 40% going specifically to Uniondale.

Without a casino, Sands would pay a total $7.9 million a year in rent to the county, taxes, public safety payments, and community benefits. With a casino, that annual total would jump to at least $96.3 million every year, a figure that includes additional casino revenue payments to the county and town.

SANDS BOUND TO DEAL

Sands and county officials say there is no way for the company to get out of the deal. If the state does not grant a casino license, Sands pledges to develop an alternative proposal and build it within five years, although the company could establish subleases or transfer the lease again.

Sands has arranged with Mastroianni to resolve the loan, removing the biggest obstacle to developing the Hub. And, since Sands could not use state funds to build a casino project, the deal as proposed could free up $125 million in state money now committed to the Hub, for use on other Long Island infrastructure.

The deal could be an economic win for Nassau and its residents. Our concern, however, is that the lease transfer might appear too good to be true. That if Sands is denied a casino license, there will be more litigation and wrangling that again leaves taxpayers stiffed. More than a half-century of broken promises about the Hub makes us wary that Nassau might be blundering into another quagmire. And legitimate concerns and questions about siting the casino in Uniondale still must be addressed.

Nonetheless, even if we end up with the same weed-filled parking lot in the years to come, the new lease leaves the county in a far better position than it is now. The legislature has a fiduciary responsibility to act in the best interests of the county and its taxpayers. Approving the lease transfer falls within that duty.