I can see why the Nassau County legislators – casting the most consequential vote of their political lives – voted 17-1 to transfer the lease for the 72-acre Nassau Veterans Memorial Coliseum tract (the Hub) to Las Vegas Sands, which is proposing to build a “world-class” casino, hotel, spa, entertainment and convention complex.
Presiding Officer Richard J. Nicolello summed it up best after four hours of testimony and vigorous public comment for and against, pointing out the unlikelihood of a non-casino developer coming in, having to pay off the existing leaseholder $100 million owed from a 2015 renovation, the millions of dollars it would cost to remove the existing structure and the millions more to develop.
The property itself would have to be of sufficient intensity, density to justify development, which always was the problem, in order to generate the income to justify all that expense. Pathetically, it seems only gambling can provide sufficient profit.
If we approve the lease transfer, the most important thing it gives Sands is the opportunity to apply for a gaming license – it’s not guaranteed because there are upward of 10 competing for three downstate. But regardless, the Sands is our development partner, willing to invest billions in the property even without casino.
We still get development, the economic activity of thousands of jobs, community benefit payments.
If Sands does get the casino license – it is part of a billion-dollar resort – we get the direct payments, tens of millions of dollars in rent, taxes on tickets, hotel occupancy entertainment. We get convention space, get visitors who come for more than one day, who are likely to go off and see other things.
“The county has tried for more than 30 years to develop this site and failed. We have a once-in-a-generation opportunity to partner with an entity that wants to invest billions without a cent from the county. If we say no, [a casino] will still be built, but all the economic activity will go to New York City, the county gets nothing but a failed arena and parking lot on 72 acres.”
Most significantly, this is far from being a done deal. As Sands’ environmental consultant, VBH, the public will have several opportunities to raise issues during the state’s mandated Environmental Review Process, likely to be led by the Town of Hempstead’s board.
Also, Sands is not assured of winning a casino license from New York State’s Gaming Commission – it is one of 10 competing for a downstate slot. A key factor in winning approval is community support or opposition, so expect the opponents, including Say No to the Casino organization, to be vocal.
So the biggest question is, given the amount of money that Sands is throwing around in anticipation of reaping $2 billion in profits a year based on gambling receipts, if the casino falls through, can Sands resell the lease without the county having a say? That issue was left unanswered.
What made me most skeptical was the testimony of Maurice Chalmers, director of the county’s Office of Legislative Budget Review, who said that the project would have a $3.7 billion economic impact on the county.
“It’s simple math,” he said – he took the Sands’ projections of (union) workers during construction, 12,000, multiplied by wages.
OK, then what will the economic impact be once the project is open, with and without the casino? He couldn’t say. And what would be the economic cost – lost home values, diversion of revenue from local shops and restaurants, increased costs for policing, emergency services, infrastructure wear-and-tear?
That’s fiduciary malpractice, and that should have been enough to table the vote until those answers were provided.
His big economic argument, though was that under the prior lease, over the past 10 years, the county collected $23.7 million; under the new lease, the county gets $54 million “unconditionally” right off the bat, plus other surety fees totaling $67,750,000 (two to three times the total of the past 10 years).
Then, when the project is open, the county will earn as much as $7.9 million a year (without a casino), but with a casino, $96,300,000 (after year four).
This includes public safety payments of $900,000 (non-casino) or $1.8 million (casino) – money going directly to the Nassau County Police Department, which Commissioner Ryder described as a “partner” in combating crime that might arise.
It also includes community benefits payment of $2 million (non-casino) or $4 million (casino), and base rent of $5 million (non-casino) or $10 million (casino).
You can see why the legislators would swoon to have this massive an investment without a dollar of taxpayer money – and why they would be rooting for Sands to win the coveted casino license.
But to get these massive amounts of revenue – the $2 billion – means “north” of 20,000 “guests” a day, 24/7, exacerbating already congested roads, drunk driving, air pollution, crime, addiction (gambling, drug, alcohol). And where does that $2 billion actually come from?
“Casinos don’t create wealth, they extract wealth from where they are,” Monica Kiely of Say No to the Casino Civic Association, asserted. “The money Sands generates will come from gambling losses, mainly from Nassau County residents. If this were such a wonderful deal, why come in here and give upfront payments to so many groups?”
The opponents – chiefly residents of Uniondale, Westbury, East Meadow, and Garden City – also raised concern over the decline in their home value.
They objected that the wider public was not actively engaged in the process (opponents charged that the Nassau County Planning Commission did not hold the mandated public hearings).
On the other hand, Sands did a brilliant job of wooing local chambers of commerce and business groups like the Long Island Hispanic Chamber, organizations like EAC and the NAACP-NY, and colleges (40,000 college and high school students border the project) — actually partnering with Nassau Community College on workforce and new hospitality management courses (how much money exactly?).
Hofstra University’s counsel, on the other hand, stood up to oppose the vote, at least until its lawsuit against the project is decided. They also are promising millions in community benefits payments to Uniondale, Hempstead and East Meadow.
It certainly didn’t hurt for Las Vegas Sands to hire former New York Gov. David Patterson as senior vice president.
And while the legislators and proponents were extolling this as the deal of the century that can’t be passed up, it was also noted that there are four (or five) other billion-dollar developments underway, with another on the way.
And Gov. Kathy Hochul has been to Long Island multiple times to talk up investments in turning the island, once the Cradle of Aviation and center for defense manufacturing, into a Life Sciences and Clean Energy (offshore wind! Solar!) corridor.
But I can see why the legislators were unwilling to delay the vote, given the precarious economy (the Republican-caused debt crisis that could spark a collapse in investment). They didn’t want to take any chance that Sands would withdraw, as Amazon did in the face of community opposition to its New York City headquarters.
It remains for officials and residents alike to be vigilant in making sure Las Vegas Sands deals honestly.