Editorial: Trust but verify Sands Las Vegas deal

Editorial: Trust but verify Sands Las Vegas deal

We may be exaggerating a little when we say that the past week was “yes” to a casino and “no” to housing in Nassau County.

But there is an element of truth on both counts with important implications for Nassau’s future.

The “no” to housing came when Gov. Kathy Hochul removed from the state budget her housing plan intended to address a shortage of 800,000 housing units in the state.

Hochul’s plan called for a 3% increase in housing units over three years, the possibility of the state stepping in if the 3% goal was not met and the use of transit-oriented developments to achieve that objective.

Town supervisors, including North Hempstead’s Jennifer DeSena and village officials, responded to the plan as if alien spaceships had landed at Roosevelt Field. They said the threat of the state stepping in amounted to a loss of local control that would end the suburban dream.

Which was kind of the point – to remove local officials’ total control over zoning.

We believed it was for good reason. From 1950 to 1970, Nassau County’s population grew from 672,765 to 1.43 million people, according to the U.S. Census Bureau. But since 1970, Nassau’s population has declined by 32,306.

So much for local control.

The shortage in housing in Nassau and beyond has caused rents and housing prices to soar on Long Island and in New York City, preventing middle-class families, single young professionals and aging residents, among others, from finding places to live at reasonable prices.

Paul Krugman, a Nobel Prize-winning economist and New York Times columnist, recently estimated that middle-class families earning $70,000 a year pay a “housing tax” that amounts to 25% of their income.

The local officials maintained that they were better positioned to oversee growth in housing than state officials.

If that is the case, now is the time for them to prove it. But we wouldn’t recommend anyone holding their breath.

By contrast, the proposal for a casino in Nassau moved a large step forward.

County Executive Bruce Blakeman announced that Nassau had reached a lease agreement with Las Vegas Sands to develop a casino and entertainment resort at the site of the Coliseum and surrounding 72-acre site known as the Nassau Hub.

The agreement would permit the Sands to develop a $4 billion resort that includes a casino, hotel, live entertainment venue, community centers, restaurants and more.

The agreement still needs the OK of the Republican-controlled county Legislature and the Sands must obtain zoning approval from the Town of Hempstead and the state licensing board’s blessing of the casino – which is by no means guaranteed.

Upon approval by the Legislature, Blakeman said, Sands will provide Nassau County with $54 million – whether or not the casino is eventually built.

If the casino is approved and opens, Blakeman said, Nassau is guaranteed $25 million in revenue with escalation costs. That figure increases to $50 million a year with escalation costs once the operation has been running for three years.

If the Sands is unable to obtain the gaming license, Blakeman said, Sands would still have to pay the $54 million to Nassau County and construct other aspects of the proposal aside from the casino

In addition to the $54 million payment to the county, Blakeman said, the Sands will also pay $5 million in recurring rent until the gaming license is obtained, at which time the recurring rent will increase to $10 million annually.

“My friends that I’ve talked to in the casino industry have told me that this could become the highest-grossing casino in America,” Blakeman said. “Let me stress that we want to use that money for good things, to stabilize our tax plan, make sure we don’t have to raise taxes, to make sure that we have quality construction jobs that will last for at least the next five years.”

This sounds like a very good deal for Nassau. It would provide an economic shot in the arm and generate both short-term and long-term revenues as well as thousands of construction jobs for five years and permanent hospitality jobs beyond.

But a note of caution is warranted given what’s taken place at the HUB going back more than a decade.

In 2007, then New York Islanders owner Charles Wang sought to invest $3.74 billion in a plan to transform the Nassau Veterans Coliseum and the surrounding area into a modern suburban area.

The base of what was known as the Lighthouse project was a newly renovated Coliseum for the New York Islanders to play in.

Surrounding the Coliseum would be houses, offices, restaurants, and various stores, as well as Long Island’s first five-star hotel. There would also be an athletic complex, conference and exhibition facilities and a minor-league baseball ballpark.

But the Town of Hempstead would not approve the plan. in July 2010, Hempstead Town Supervisor Kate Murray announced a plan to downsize the project.

Then Nassau County Executive Ed Mangano and the developers said the town’s plan made the project  “economically unviable for both the developer and owner of the site.

The decision not to build resulted in the beloved New York Islanders leaving for Brooklyn.

Some believe Hempstead’s opposition to the Lighthouse project was based on guess what? Yes, housing.  The concern, some said, was that Democratic voters might move in and challenge the town’s Republican dominance.

Sands Las Vegas appears to have learned a lesson from Wang’s failed plan. They made it very clear that there would be no housing for anyone, including the construction workers who would build it and the hospitality workers who would staff it.

Following the defeat of the Lighthouse, Mangano proposed a plan for the county to borrow up to $400 million to rebuild the Coliseum. County voters turned it down.

Mangano then sought the aid of Forest City Rattner, developers of the Barclays Center, which would take the Islanders from Nassau to Brooklyn, to develop a plan for the HUB that included the renovation of the Coliseum. Forest City Rattner were also included in selecting a company to develop it.

Forest City Rattner then helped select themselves to do the work. The plan called for a downsized arena, restaurants and retail.

Only the Coliseum got renovated. Forest City Rattner would later sell its interests in the arena, the Barclays Center in Brooklyn and the New York Nets to a group headed by Russian oligarch Mikhail Prokhorov.

What could go wrong?

Well, for one, Prokhorovov got on the bad side of Russian President Vladimir Putin. Prokhorovov would later flee to Israel.

In June 2020, the Coliseum shuttered its doors after the company owned by Prokhorovov defaulted on $2.2 million in rent after months of events were canceled amid COVID.

Nassau Live Center took over the operation of the Coliseum, assuming $100 million in debt incurred by Prokhorov’s company.

Las Vegas Sands now says they are not sure what they will do with the Coliseum.

We say all this not to oppose the project but just to give a word of warning. The county Legislature and the Town of Hempstead need to do their due diligence and make sure the county dots its i’s and crosses its t’s.

Hofstra University, which sits adjacent to the site, and civic associations have opposed the project.

Hofstra’s trustees said in a letter published online that the project could generate potential “traffic congestion, crime, economic harm to local business” and would have a negative impact on the school community.

Yes, if the project is successful, it will increase traffic to the area and more people could mean more crime. But there is an answer to that – more police.

The proposed agreement calls for the Sands to provide the Nassau County Police Department $1.8 million each year with escalation costs for police improvements.

The 72-acre site in the heart of Nassau is too important to languish forever and Blakeman is right about the need for more revenue.

The county Legislature and Town of Hempstead should proceed cautiously. But proceed.










No posts to display


Please enter your comment!
Please enter your name here