One day after Nassau County voters body-checked a $400 million bond proposal for a new arena for the New York Islanders, the state-appointed board that oversees the county’s finances told local officials to get their house in order.
“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 budget,” the Nassau Interim Finance Authority said Tuesday.
The statement marks the latest salvo between the county and its overseer. On Friday, NIFA rejected the county’s revised multi-year financial plan, saying the budget shortfall violated state law.
Nassau faces a $42 million year-end deficit, according to county Comptroller George Maragos, and the gap could balloon to $140 million if attempts to fill the hole fail. NIFA itself warned that next year’s deficit could reach $225 million.
On Monday, voters in the Long Island county east of New York City soundly rejected a plan for 30-year taxable bonds that would also have included a minor league ballpark in the town of Hempstead’s Uniondale hamlet, adjacent to the arena.
Voters by a 57% to 43% margin nixed a proposal that would have included a new arena for the National Hockey League’s Islanders and a minor league baseball park next to the existing Nassau Veterans Memorial Coliseum, which opened in 1972. The Islanders also began play that year.
Turnout was about 10%. According to the Nassau County Board of Elections, which reported results from all but two of the county’s 1,160 precincts, only 155,000 voters participated in a midsummer referendum that cost $2.2 million.
“We’re pleased that Nassau County taxpayers understood that this was a poorly devised public financing project,” said Mark Hamer, a board member of the Association for a Better Long Island, a business group that opposed the plan.
After the results were announced, near midnight Monday, County Executive Edward Mangano, without specifics, said he would “explore a path for new opportunities and growth in Nassau County.”
Team owner Charles Wang was clearly disappointed. “I feel that the sound bites ruled the day and not the facts. Right now, it’s an emotional time and we’re not going to make any comments on any specific next steps,” he said.
Wang said the team will play on Long Island until its lease expires in 2015.
Speculation has the Islanders, without a new arena, moving to Kansas City, Mo., or to a Canadian city. The Barclays Center in Brooklyn, N.Y. — scheduled to open in September 2012 — could be an option, but an adjustment to the building plan would be necessary to accommodate hockey.
Opponents said the new arena would have added about $14 million of new net debt annually on a government already financially strapped, despite its affluence. The county’s independent Office of Legislative Budget Review estimated that the debt-service cost on the bonds would have required $29.3 million annually, while receipts would total around $15 million per year.
Hamer said the opportunity exists to craft a better development proposal around “the Hub,” as the acreage surrounding the Nassau Coliseum is known.
His organization wants an open, competitive bid process. Hamer on Tuesday emphasized cooperation between private and public concerns, saying Hempstead could be more open about zoning and density requirements. “The county leaders and private developers could try to force the town of Hempstead’s hand,” he said.
NIFA on Friday said the county’s “continued reliance on 'other financing sources,’ such as borrowing, is not revenue and cannot and will not be accepted by NIFA.” Maragos, in his report also issued Friday, urged the fiscal overseer and Mangano’s administration to cooperate better.
Nassau County is rated A1 by Moody’s Investors Service, A-plus by Standard & Poor’s and AA-minus by Fitch Ratings.
