How the NY Islanders and Nassau Failed
by B.D. Gallof
A special report with an exclusive with Tom Suozzi as B.D. Gallof takes a last view & summation on what went wrong with the NY Islanders, the Lighthouse Project, the Town of Hempstead, the Republicans & Democratic Parties in Nassau County, and dilapidated and outdated Nassau Coliseum. Why Brooklyn was inevitable.
How IT Failed:
NY ISLANDERS & NASSAU
SPECIAL REPORT BY B.D. GALLOF
The Dire Warning Of the Isles Situation Came in 2000
When Charles Wang took over full control of the Islanders in 2000, which was engineered by both Alfonse D’Amato and under the watch of former Republican Nassau County Executive Thomas Gulotta, in addition to inheriting a hapless and directionless franchise already with years of ownership issues, Wang was also, according to a source close to the situation, taking over “one of the worst concession deals ever."
D’Amato had brokered a deal previously where the Islanders would not derive a cent from any concessions sold. Instead, that money would go to SMG, the firm that runs Nassau Coliseum. At the time it was an agreement that was unheard of, but ended up being what the Islanders and Wang contended with for years.
D’Amato, a former U.S. senator, was Town of Hempstead supervisor years ago when SMG first got the lease, and was privy to its details.
“'I think D'Amato has a lot to answer for,'' said Democrat David Denenberg, who conducted a hearing of the Nassau County Legislature in 2000 trying to look into that very issue.
Denenberg wanted to subpoena documents from SMG to find out what it earned from the lease. It was at that hearing that NHL VP Bill Daly spoke and
"Without a change in circumstances in the very near future ... a new arena, a new lease ... the New York Islanders cannot and will not be a viable franchise.”
– Bill Daly, NHL Vice President & Chief Legal Officer , 2000
said these haunting words: "Without a change in circumstances in the very near future -- a new arena, a new lease -- the New York Islanders cannot and will not be a viable franchise.”
According to a 2006 Nassau County Legislature report, SMG enjoyed between a $600,000 and $2.5 million annual profit, while the team lost between $12 million and $27 million annually.
As you obviously know by now, the hearing failed to change a thing. Wang bought the Islanders in a step to move forward with his vision for the area, which also included some hoop dreams with the then-New Jersey Nets and a convention center.
While chasing the Nets, Wang and his staff in 2002 actually began looking into a “hub” option of mixed-use. A letter from them went to newly elected Nassau Executive Thomas Suozzi’s administration early on looking for information to kick-off the process. When Wang and his principles took the next step to meet with Suozzi to explore options for his franchise to become fiscally solvent, he was told flatly that the county had no money for anything to be built.
Before Suozzi took office in 2002, Nassau County's debt was downgraded to BBB, two levels above high-risk junk. The county was an absolute mess, and that was long before the recession moved in and put everyone through the ringer.
Despite having no funds available, Suozzi supported Wang's attempt to get something done. Suozzi's solution was to give the property to Wang, since the county was losing money yearly on the property in repairs and maintenance costs. Thus it would make money because it included a fixed-lease payment of $1.5 million per year to the county (with adjustments for inflation) over 99 years.
Suozzi's step began the first foreshadowing of the politics that would shuffle into the fray over the venue. Democrats and Republicans of Nassau's Legislature became upset due to there being no assessment of the land’s value, a never-ending point of contention. In their minds it was a land deal to Wang instead of being put to the highest bidder for the most money, freezing out other developers. However, what was perhaps overlooked was the need to keep the
the ONE professional sports team and revenue piece at the coliseum site and appeased. Suozzi tried to make that point at the time, but it got lost as well.
However, another item in the Suozzi-to-Wang land deal that might have created ongoing implications surfaced: the land had to have a certain percentage of “work force housing” (aka affordable middle class housing).
Thus, from it the Lighthouse Project was born.
The Lighthouse Project was a carefully cultivated project that was attempting to avoid picking political sides. To that effort, it secured meetings with Democrats, Republicans, and even the Town of Hempstead.
A source that was at one of those meetings wrote, "There was a closed-door
meeting in 2004 with Town of Hempstead. Charles Wang's main players also had separate meetings with Republicans and Democrats. Everyone was for it. Everyone wanted to make it non-political."
The meetings featured names like Suozzi, Joseph Mondello, D’Amato, and the Town of Hempstead, among others. However, it did not include Supervisor Kate Murray, who did not want to be present due to having to vote for it eventually.
Most Islanders fans can tell you how successful that effort was in keeping it non-political.
Perception by many in the political arena, including Democratic leader Jay Jacobs, who was interviewed a few months back, is that the project and Wang were undone primarily by both D'Amato and Mondello, the two Republican powers who sat in on that aforementioned Town of Hempstead meeting and those supposedly non-political efforts. Those two buddies are still attached at the hip today.
They, according to independent sources, are also the byproducts of the old Republican machine on Long Island. The old Republican machine got its name from Mondello and D’Amato’s mentor, Joseph Margiotta, a man whose administration who did things its way or things didn't get done.
The first big indicator of how the Lighthouse Project's fortunes would change was when the GOP launched a candidate, Greg Peterson, at Suozzi in 2005, using the Lighthouse Project as a wedge.
Ex-Sen. Alfonse D'Amato and Nassau County GOP Chair Joe Mondello in 2012.
(Jimmy Vielkind/Times Union)
"The politicization of the Lighthouse Project would be a bad sign. For it is due to local politics that Nassau Coliseum has gotten dilapidated and with no good plans for the area in the first place. For years, politics reaped what it has sown, and the area has suffered"
– B.D. Gallof, 1/27/2009
Republican, Democrat and even Islanders sources have cited that Wang "can be extremely difficult to work with." Islanders fans will tell you that he has driven many nuts with hubris, acrimony and just plain weird decisions over the years.
Wang has said to people many times that he is at a point in his life where he can do what he wants and doesn't have to answer to anyone. To him, the Lighthouse Project was about his legacy to Long Island. He was trying to leave an indelible mark on the county and fabric of Long Island.
Over the years, according to my sources within the Town of Hempstead, there was a fierce dislike of Wang and his style. The Lighthouse Project hearing that included a march of fans with Wang and Suozzi was where things began to spin out of control.
The Town of Hempstead felt Wang was a bully using the blogosphere; like the team's former V.P. of Communications, Chris Botta, and his website IslandersPointblank, which was kept operational financially by the Islanders team until the summer right before the hearing in 2009; other Islanders "Blog Box" bloggers; and local press "to push an agenda down the town's throat" without allowing for “due process."
The Vote That Never Happened
"Charles Wang’s sweetheart deal,”
– Town of Hempstead Source
But one has to wonder how much of that actually had to do with the same people in those offices in Hempstead not liking not being in control?
There was a point during the Lighthouse Project when the Town of Hempstead ground it to a halt, when a high-level source from the town gave me a list of issues from Hempstead's perspective:
1. A size and scope scale-down of the project.
2. Allocation of funds for key items like water, sewage, and traffic.
3. The fact that Wang and developer Scott Rechler were also depending on foreign funding, namely Chinese investors. This bothered "some" on the board.
However, one description repeatedly made by this same Town of Hempstead source, which also was echoed by another source from that office, seemed more indicative of what the true issue was: “Charles Wang’s sweetheart deal,” alluding to Suozzi’s gift of the land for development for only $1. There it was: competing developers’ words coming out of the Town of Hempstead’s mouths.
Several Democrat and independent sources said that the “work force” housing was also a main issue in that it would lead to more Democrats within a Republican stronghold. Others simply cited that Wang refused to play ball with the old ways that represented how to get things done on Long Island.
To tell the truth, there is a long history of the Town of Hempstead using developers to grind its axe, as it has passed on earlier developers on the very same issues it cited in opposition to the Lighthouse Project: traffic, quality of life to those around it, and water supply. These were items objected to during the hearing and with letters directed toward Suozzi even before that hearing, questioning if funds were being allocated for those stated items.
An independent source had previously told me as much. However, Democrats previously quoted and spoken to for this series fail to see this as any kind of issue. As former Nassau Executive Thomas Suozzi told me in an exclusive interview, “If this was an issue, it would have been simply solved. We would have gone out and gotten it.”
The response from an independent source to this statement was incredulity. They stated that the process to get those type of funds takes years.
Looking back at it now, there was a battle-footing mentality to it all....
In 2009, in an interview with the NY Times, Hempstead Supervisor Murray was lamenting the 20-month “rush” that was being forced upon the town was when the Lighthouse Project submitted its application. In it, she cited the four years that it took for the proposal to even get on her desk. However, despite her point, once upon her desk, it was never voted on. It was why Wang and the Lighthouse Project would continue to echo the following during that time:
“Long Island stands in this defining moment waiting for an answer. Yes or no.”
The fact is, it never got an answer from the board members. It was never voted on. The town board balked at the size and scope, and both sides were never able to find any middle ground. They stared at one another for months until, finally, the Town of Hempstead put forth a zoning plan in 2010 that not only was a statement to Wang and the Lighthouse, but also completely tied the hands of the new Nassau executive, who just happened to be in the same political party as the Town of Hempstead.
“While the Town of Hempstead’s zoning plan does allow for some flexibility for the developers, it places restrictions on the area’s density, height and number of housing units. Under the new plan, hotels are limited to only nine stories, and retail, residential and office space is limited to only three or four stories. This will restrict the area’s housing potential from 2,306 units to a maximum of only 500 units and will severely limit the desired market to increase the amount of workforce and next generation housing," stated by Vision Long Island Organization at the time.
In a previous article I did for CBS New York/WFAN, Democratic head Jacobs said while the Town of Hempstead spoke publicly on the issue of size, to which
Wang was prepared to negotiate,he believes that the Town of Hempstead and Murray didn’t want a deal.
However, in speaking to the Town of Hempstead at that time, to Republican Party operatives and even independent sources since, that isn’t the same tale being told now.
So who is telling the truth?
"Charles was willing. Town really had no interest. He didn’t play ball with the Republican establishment ... They always felt after him would be something simpler.”
A trusted NHL source told me that Wang was truly willing to negotiate, saying: “Charles was willing. Town really had no interest. He didn’t play ball with the Republican establishment. They had no interest. They always felt after him would be something simpler.”
Another independent source also agreed, citing that negotiation as always being built-in to the original Lighthouse Project plans.
In other words, Democrats who push blame on Murray and the Republicans are not alone. According to a team source, it is an opinion shared quietly by those who are stuck working in the coliseum's dilapidated halls for another two years before the Isles head to Brooklyn.
It seems pretty cut and dry, right?
Not quite. One pointed criticism of Wang was his inability to compromise on the size and scope of the Lighthouse Project in what were "secret" meetings that I wrote about at the time with proponents of the venture. These were meetings between Town of Hempstead and Lighthouse Project principles. These were the very meetings that Wang was asked about on the air by Howie Rose during a game last year. Wang refused to admit they happened.
“In response to Wang's remarks, Town of Hempstead spokesman Mike Deery said that Wang and the town supervisor, Kate Murray, met one-on-one together in late October, their staffs met once or twice around the same time, and that the parties have exchanged ‘correspondence’ since then," Newsday, Feb 6, 2010.
Why lie? Why not admit you tried to find a middle ground? Pride? Embarrassment? Anger?
It goes even deeper, per another independent source: "the town was willing to accept housing, just not to the extent they were looking for, but they were willing to accept housing."
They pointed out that the new developer has NO housing at all. Instead, their vision of the hub is over in Hempstead, and Uniondale does not reap that element.
What bespeaks perhaps the worst moment of political mechanics was when the battle between the Lighthouse Project and the Town of Hempstead reached a fever pitch.
According to a source, one conjecture was IF someone was apply pressure to break the Rechler/Wang relationship by quietly proposing the land's availability options to Rechler, himself, it would likely break up the partnership.
Whether this happened or not, we well know that the financial partnership between the two dissolved quietly as the Lighthouse Project was finally scrapped and elements that worked on the project were reallocated, as I reported in April of 2010.
In fact, rumors of Rechler pulling out actually came in December of 2009, but I could not confirm that beyond hearsay. According to that information, it was Rechler who was abandoning the venture.
That disturbing aspect aside; other developers and those experienced with large projects wonder how Wang and the Lighthouse Project did not have frequent meetings with the Town of Hempstead long before the hearing to discuss the obvious issues of size and scope. Instead, it dragged long after the hearing and later fell apart. Or, once the Republican leadership turned on the project and Wang in 2005, was it viewed as an “us vs. them” scenario?
Speaking of the never-ending battle between parties and on Long Island, high-level Democratic party sources have pointed out that The Monti Development Group, chosen over others by current Nassau Executive Ed Mangano to develop the coliseum area, is using Republican honcho Joseph Mondello's law firm.
That same source continued on to point out that just recently, at a high-level Republican dinner, Monti just happened to be an honoree, as was Mangano.
As my source, and many others in the past, cited, there are no coincidences politically in Nassau County. “This is how things are done within the world of Nassau Republicans” is the standing accusation.
This also happens to be something that Wang reportedly refused to do. His refusal to hire D’Amato’s brother is cited in one of Newsday’s best investigative pieces on the coliseum fracas as one of the reasons that D'Amato and the Republicans turned on the project. This has also been confirmed off the record with Islanders sources.
"He wouldn't play ball like the Republican establishment wanted him to," the source told me.
But was it the only reason? Was this enough to deep-six the entire process and force a team out of the area? Did the GOP cut its nose to spite its face?
Or is there more to all this?
So, as I put together items in my trying to piece together the wreckage of what went wrong with Nassau County, I was able to pin down the former executive for an exclusive interview.
In our phone conversation, Suozzi, who is now running to gain back his seat as Nassau County's chief, cited five main reasons that he thinks had a hand in the Lighthouse Project failure:
1. Wang, as mentioned before, is difficult to work with.
2. Wang refused to hire who D'Amato wanted.
3. Pure politics. Basically, Suozzi, who was a Democrat, had given the land and championed the hub, something the Republicans did not want to let happen.
4. The affordable housing that was to be a part of the project, which was aimed at a younger generation (thus potential Democrats).
5. The project was just too big and complex for the Town of Hempstead.
Asked about mistakes he made during the course of the Lighthouse Project, Suozzi cited two.
1. He said he should have told Wang to "play ball" and with D'Amato.
2. He said he wished he had the forethought and moxie early on to have gone to the state or set up a development corporation that would have superseded the local zoning.
When I brought up the mess from the start of the process in 2005, Suozzi said the real trouble started in 2010 and ultimately led to the Islanders leaving for Brooklyn.
"The Lighthouse Project," Suozzi
said, "was the best sports deal in America!"
He said the developer was going to pay and would generate for the county yearly. It was perfect, in his eyes.
The bottom line, in Suozzi's opinion, is the Town of Hempstead killed it. The new Nassau executive’s big idea, during a time that featured the Republican Party trying to avoid borrowing as policy, was to borrow $450 million. Suozzi called the referendum idea "stupid," especially with fiscal watchdog NIFA overseeing the county.
EXCLUSIVE INTERVIEW WITH THOMAS SUOZZI
"The Lighthouse Project was the best sports deal in America!"
Suozzi said that it seemed like Mangano was trying to push the referendum through so he and the Republican Party could control it and control the rewarding of contracts. Plus, it would avoid the Town of Hempstead's ridiculous zoning.
The fact is, according to Suozzi, Brooklyn happened because after years of losing money, and the unwillingness of anyone to make a commitment, Wang simply gave up.
So who's to blame?
Suozzi cited two players in the failed process.
1. Mangano, who is in charge of Nassau.
“The project and issue were just too complex for him to get anything done," Suozzi said.
2. Murray, who basically stopped the Lighthouse Project in its tracks.
Suozzi said blame should not fall on Wang, who might be difficult, but who finally had to succumb to the fiscal pressures of losing cash & needing a solution. In fact, he said he thinks Wang outsmarted Mangano in the end.
When I asked Suozzi, if he does become county executive again, whether he would aid the Islanders in getting out of their lease early, he said that, yes, he would like to help ease their suffering, but at the same time added that the county could not lose more money. He said he would also want to work with Wang and the team to keep their fan base and history, despite the move to Brooklyn.
When asked if he could change the direction of the team heading to Brooklyn, he said not likely.
“It is simply too far gone into the process now," Suozzi said.
As for Suozzi’s reaction to Mangano’s latest scaled-down attempt to turn the coliseum into some sort of a smaller venue, he said very bluntly: “It’s stupid.”
He pointed out that the venue is just a small part of what is a 77-acre piece of land that needs planning and a vision and that Mangano’s solution was just piecemeal. He wondered where the proposal for the much-needed convention center was. Ironically, that's something that Republicans over the years have also called for.
Suozzi said the latest plan was just an attempt by Mangano and his office to have “something” on record in an election year.
So what should the public make of all of this?
Everyone wanted a piece of something
Imagine if you will – three main sides. At the head of each of these sides are narcissists who have their own aims, visions, desires, and goals. Imagine also that they are willing to run over anyone and everyone to get to those ends.... Or ignore others.
Who are these three?
1: The Republican Party leadership/ToH
2: Suozzi and the Democrats
3: Charles Wang who led the Lighthouse Project.
The Republican leadership who was thwarted and had an evil eye onto the project once Charles didn't play their game.
The Democratic Legislature and party who wanted to find the best dollar, and wring it from the area, failing to see the dire situation despite the fact they were warned back in 2000 by Bill Daly about the NY Islanders finances.
In fact, Republican and Democrats alike wanted the land originally assessed and then put up to the highest bidder. This seemed to ignore the Islanders' severe financial situation and seemed to not take into account the seriousness of them leaving. Well, guess what? Maybe they should have paid more attention.
The Tom Suozzi administration who according to others never pushed forward on the details and items like failing to take advantage of the $50 million the developers were willing to spend on transportation improvements that would have better dealt with the density in the original Lighthouse plan. Many point to the zero dollars in county, state or federal infrastructure money set aside during his tenure.
"A redevelopment project will need infrastructure funding to, at a minimum, improve the Meadowbrook Parkway, create an express bus system to the Hempstead and Mineola train stations and address wastewater treatment upgrades to the Cedar Creek Sewage Treatment plant. Over the past 10 years, county administrations have failed to apply for federal or state funds to address these basic needs." - Eric Alexander, executive director of Vision Long Island addresses just the latest development and planning, but has been saying for years about the lack of the proper funding throughout.
Suozzi's vision of the hub, with a focus on housing, rankled many other people, possibly due to the demographic it may have targeted. However, according to information I have obtained, it seems that housing was considered by the Islanders/Lighthouse Project to be one of the most lucrative and high-dollar value elements. In lieu of this, once the Town of Hempstead zoning in 2010 killed that aspect, it might have been the final straw.
Meanwhile, according to different sources, the land handed to Wang by Suozzi angered affluent developers who reportedly used political connections and lobby grease to gum up the works with both party sides. Their infiltration would derail an attempt to get the venue zoning over to the Town of Hempstead in 2004, one year before the Republicans turned the political tables.Then their money would once again flow when Mangano took office... Though truth be told, Mangano ignored and went with a referendum instead for Charles and the Islanders.
Republican politicians wanted Nassau to be a destination again, until the leadership turned on it, and then those supporters disappeared. The Republicans wanted this to happen on their terms and their usual modus operandi. Since the Islanders have announced their move to Brooklyn, key Republican sources and voices have been silent. That silence is deafening.
Wang wanted a legacy built and his way. Moreover, he needed the Isles to stop leaking cash. He will finally get that in Brooklyn, but will likely fail to recoup his reported $250 million in losses. Meanwhile, his reaction and the inability of the Lighthouse Project to duck, weave and roll onward through it all is what made things descend to a PR war.
Democrats dragged their heels in the Legislature (curiously where some of that developer lobby money went), and Democrat leadership then blew out a Hail Mary toss on an ill-fated borrowing attempt by Mangano in a voter referendum that likely would have been sunk by NIFA at some point, anyway. People always seem to forget that little caveat.
Those on the other side of the political aisle cite that it took Suozzi over 8 years to get something done.
They also bring up that he signed an agreement with SMG in the last hour of his time in office that everyone is now stuck with.
In the meantime, in speaking to an independent party, despite reaction to by fans over the scaled down plans for the venue, there is a logic to it as well. Recession and a change in how music acts and entertainment industry has changed.
In the end, my opinion is that the Islanders on Long Island were doomed by the me-first approach of every participant involved.
Nobody rose above it. Nobody ever came to building a consensus, though at least the Lighthouse Project began with that noble intention. But once kicked...perhaps once when D'Amato and Mondello turned on it, it all changed.
The Lighthouse Project became defensive, reactive, stuck in battle-mode until it finally imploded. It could not stay above the fray. The entire hearing and after with the Town of Hempstead descended it into chaos, stalemate, entrenched position, and eventually fizzled into the ether.
The greatest crime is that Long Islanders had been for the Lighthouse Project. It had support in polls, and in the "substantive" community meetings. It was the first 70 of the 200 that really meant something. There was positive citizen support, small business and civic leader support, besides the labor and NY Islanders fans.
Islanders fans had been discouraged by bad ownership, bad team management, bad decisions for well over a decade, yet they rallied and marched with Suozzi and Wang on that fateful day at the Town of Hempstead hearing in 2009, yet they did not realize how thoroughly and shabbily they would be abandoned by all those factions they were pinning their hopes on. Because all those factions were about themselves.
As for who wasn't willing to negotiate between the Town of Hempstead and the Lighthouse Project, chances are it was both. Both so stuck to fighting in the war that neither were willing to find a way to get it done. Every move and nuance instead exaggerated into a fiasco.
My belief is that despite Republican leader turn on the project, that the Town of Hempstead did not want to be the ones to kill it, at least at the start. I believe that the situation spun madly out of control. Each side getting angrier at the other. Republican leadership got their way, perhaps pressing on things all along.
Then when the hail mary attempt of a referendum came and fizzled, Democratic leadership then got what they wanted.
Mangano, in fact, is stuck with a situation not of his own making, and is now facing Suozzi once again. Whoever is exec will still be stuck with the wreckage of the county and the hodgepodge of plans that remain for the venue.
The Islanders, the fans, those for the project, needed a hero. Nobody heeded the call
According to one story, Kate Murray was in Tom Suozzi's office when things had gone decidedly south beyond the pale. he had reportedly asked her: "What do you want?" in order to find a way to play the political game to get things through.
She never answered. No bridging of the gap would happen. AND that if true... well that IS on the Town of Hempstead.
Instead, after years of frustration and disappointment Wang merely became a tenant in Brooklyn, a place that was looked at before all the political chicanery and many years of drama even happened.
Irony has no bounds.
Sadly, in the end, Brooklyn was inevitable because Nassau failed in every way possible. Nassau was Nassau, and it is why there will be an empty building in 2015 that might cost Nassau far more than any new venue would have cost, thanks to a potential class-action lawsuit that will likely land between $500 million and $1 billion.
As I said, irony has no bounds.
This was originally slated for CBS New York/WFAN as part of my "Autopsy on Nassau" series. They balked at the political nature and political finger-pointing where this would push the envelope uncomfortably of what their conservative sports blogging aims were.
Instead, I designed this as a cutting-edge online magazine that tells the final blog tale of where things went awry with Nassau and the NY Islanders.
Special thanks to my long-time "partner in crime" on writing about Nassau and the Lighthouse Project, Nick Giglia. His knowledge of the internal logistics of the complex process of development and expertise on the Lighthouse Project itself has been an immeasureable help to my own understanding and writing on the subject.
"Brian is a prolific and fair journalist of great work ethic and integrity whose work covering and following the ongoing drama surrounding the NY Islanders, the Lighthouse Project, the ongoing Brooklyn/Nassau seesaw has always been first-rate -- illuminating and insightful."
– Mike Vogel, Senior Editor & Content Strategist at NHL Washington Capitals
"Brian is an extremely tenacious writer." – Michael DiLorenzo, NHL VP of Audience Development
"Brian is a self-starter, entrepreneurial type who can take an idea or concept and make it a well thought out success. I've known Brian for many years and it has been a pleasure watching him establish such a respected presence in digital media."
– Anthony De Rosa, Social Media Editor & Columnist at Reuters
ABOUT THE AUTHOR
BD is an NHL credentialed blogger who has been writing about the NY Islanders for over 6 years and been in front of the Nassau County politics, as well as their eventual move to Brooklyn. BD is not only a Nassau County resident, but also a resident of the Town of Hempstead.
B.D.'s column can be found on CBS New York/WFAN.