Case Study

PLDW
MUNICIPAL
INFRASTRUCTURE
cASE STUDY:
PLDW attorneys’ groundbreaking model for negotiating a public-private
partnership results in a multi-million dollar, state-of-the-art sports and
entertainment venue for Nassau County, NY at no expense to taxpayers
Background &
Challenge
The Nassau Veterans Memorial
Coliseum, commonly referred to as
“The Coliseum,” is located in the Town
of Hempstead on Long Island in Nassau
County, New York. The approximately
77-acre multi-purpose, publicly-owned
sports and entertainment facility opened
in 1972 and has since been home for
the National Hockey League’s New York
Islanders. Over its 41-year history, the
Coliseum was also the host facility to
other amateur and professional sports
teams like the National Basketball
Association’s New York Nets and the
National Lacrosse League’s New York Saints. In addition,
the iconic facility became one of the most prominent U.S.
concert venues for popular musicians and entertainers.
Pop culture artists like Elvis, Madonna, Bruce Springsteen,
David Bowie, the Spice Girls and Billy Joel have performed
before sell-out crowds in the massive facility with its once
distinct character and New York aura of excitement.
For four decades, this important Nassau County asset
welcomed millions of people from around the world,
TENO A. WEST
Partner
81 Main Street, Suite 510 White Plains, NY 10601
tel 914 898 2426 • fax 914 898 2401
JOSH J. MEYER
Partner
bringing acclaim to Long Islanders and putting money into
the local economy. In its heyday, and with a rich history
of attracting a global audience of sports enthusiasts and
concert-goers and its close proximity to New York City:
“the cultural capital of the world”, the Coliseum offered
Nassau County a prominent ‘sense of place’ that was
enjoyed by visitors and local families and friends.
However, after decades of little or no maintenance due
to the lack of public funds, the Coliseum felt the wear
and tear of thousands of sporting events and concerts,
performances and ceremonies. From around the mid1990s and for the next 10 years, county officials
attempted to keep up with maintaining the slowly
dilapidating facility with piecemeal renovations and repairs.
By 2009, after years of stress and strain on the facility,
scarce public funds to pay for necessary maintenance, a
weary community of overburdened taxpayers, and threats
by the New York Islanders’ owner Charles Wang to leave
Long Island due to the Coliseum’s deteriorating condition,
public officials and business leaders escalated their ‘call to
action’ to local residents, asking them to fund a new arena
by passing a public bond issue.
In August 2011, Long Island voters defeated a $400
million referendum to replace the Coliseum. One year later,
project development
financial overview
• Privately financed $229 million sports and entertainment complex on 77 acres in Uniondale, NY.
•
Minimum of 8 percent of all revenue from the Coliseum and 12.75 percent
of all parking revenue—or a guaranteed annual payment of $4.0 million—
beginning in 2015. The guaranteed payment will escalate by 10 percent
every five years.
• At least 8 percent of the gross revenue from any new entertainment
facilities surrounding the arena or a minimum of $400,000 a year, whichever is greater.
• $50,000 per month in payments to the County beginning in August 2015 if construction hasn’t begun. Once construction starts, NEC will pay Nassau $100,000 per month.
• Cost of all utilities and maintenance at the Coliseum.
• Phased-in payments in lieu of taxes for entertainment district consisting of new restaurants and entertainment options surrounding the Coliseum.
• Nassau County retains the development rights to the remaining areas of the 77-acre Coliseum property.
when the Islanders’ owner announced the team’s move to
the Barclays Center in Brooklyn, New York beginning with
the 2015 season, public officials realized that without
community support and funding, the iconic structure
with its once high-octane crowds would soon turn into a
money pit and an eyesore in the midst of the wealthiest
county in America. County leaders needed a solution that
was innovative, creative and would not require taxpayers
to foot the bill.
In September 2012, following the failed referendum,
Pannone Lopes Devereaux & West (PLDW) was engaged
by Nassau County to provide guidance and advice on
how to successfully achieve the goal of rehabilitating
the facility with private funding and drive much needed
economic development for the County, which would
in turn create jobs for local residents. With PLDW’s
experienced team of municipal infrastructure and
business lawyers at the helm, a new path for the
rehabilitation and future of the Coliseum and surrounding
area, known as the Nassau Hub, was put into action.
Their work would be groundbreaking in negotiating publicprivate partnerships and would serve as a blue print
for future public-use site development at no expense to
taxpayers.
Solution
Under the direction of Nassau County Executive Edward
P. Mangano, the team of PLDW attorneys advised,
guided and led the massive, multi-million dollar project
for Nassau County from start to finish. Among the
tasks performed included drafting the Request for
Qualifications (RFQ) and Request for Proposals (RFP) –
“Redevelopment of Nassau Veterans Memorial Coliseum
Site” – and facilitated the procurement process. In
June/July, after obtaining advice from the County
Executive’s Business Advisory Council, the attorneys
and members of the County RFP Evaluation Committee,
recommended two final proposals out of four submitted
by private companies to compete against each other for
the development rights. The selection of the two final
proposals set the stage for PLDW attorneys to begin
negotiating competitive lease agreements between
the award winner Nassau Events Center, LLC (NEC),
an affiliate of Forest City Enterprises, Inc., and its
competitor, Madison Square Garden Company (MSG).
Working expeditiously to meet challenging deadlines set
by the County, the PLDW attorneys’ approach to close
a deal that would meet the County’s goal and deliver
the highest value to residents was to simultaneously
negotiate and leverage one proposal against the other.
The negotiation model was unique to public-private
partnerships, as typically, public-private partnership
deals are not fully negotiated prior to the selection of
the private company companion to the public entity. This
transaction, under the legal watch of PLDW, would be
quite unique.
“The lawyers at PLDW met every challenge and every deadline with finesse and
a clear vision to facilitate this procurement and negotiate the lease in an
innovative manner that balanced the power of giant developers, which made
the difference for the residents of Nassau County in this contract award,”
said Nassau County Executive Edward A. Mangano. “As I know others have already remarked since the start of this process, Josh Meyer and his team are
well-deserved of our praise and gratitude for the work they accomplished
to bring the Coliseum back to life with private money and to revitalize our
economy for years to come.”
81 Main Street, Suite 510 White Plains, NY 10601
tel 914 898 2426 • fax 914 898 2401
PLDW attorneys worked non-stop negotiating the terms
of what would become the final preferred lease with
NEC, and guided the County throughout the process,
helping to shepherd the proposal through each phase
over a short six months up through the September
23, 2013 unanimous vote of approval by the Nassau
County Legislature. Besides helping the County to
gain the ‘yes’ vote from the 19-member legislature,
PLDW attorneys also assisted in preparing information
and presentations for review by the Nassau County
Planning Commission, the Nassau County Open Space
and Parks Advisory Committee, and several legislative
committees including the Rules Committee, Finance
Committee and Economic & Community Development
& Labor Committee.
The NEC project will include a renovated 13,000-seat
arena, up to seven restaurants, a bowling alley, movie
theater, ice-skating rink, outdoor performance lawn and
a 2,500-seat theater, as well as a $1 million monument
to Nassau veterans. In addition, the lease agreement
leaves the County with zero liability for Coliseum-related
expenses and future repairs or capital expenditures,
new real estate property taxes and an advantageous
revenue share of all gross revenues and parking
revenues generated from both the Coliseum and plaza
development. It also guarantees $195 million in rent for
Nassau County over the initial 34-year term of the lease
and more than $300 million in guaranteed minimum
rent to the County over the full 49-year lease term,
while eliminating millions of dollars of annual
Results
PLDW’s team of attorneys’ negotiating prowess and
unique approach to leverage two competing proposals
simultaneously resulted in a one-of-a-kind, privately
financed project with a $229 million investment by NEC
to create a state-of-the-art sports and entertainment
venue on the 77 acres in Uniondale, NY. The economic
impact of the deal for Nassau County is estimated to
generate $10.9 billion in economic activity over 30
years, and create 1,331 construction jobs and 2,500
full-time, part-time and seasonal positions.
The attorneys’ successful negotiations in the highstakes competition between the two private companies
was commended as achieving the best value for
Nassau County as stated by the Nassau County
Executive Edward P. Mangano: “The lawyers at PLDW
met every challenge and every deadline with finesse
and a clear vision to facilitate this procurement and
negotiate the lease in an innovative manner that
balanced the power of giant developers, which made
all the difference for residents of Nassau County in this
contract award.”
81 Main Street, Suite 510 White Plains, NY 10601
tel 914 898 2426 • fax 914 898 2401
costs in Coliseum-related expenses currently paid for
by Nassau County taxpayers. The agreement also
provides the County with both pre-construction and
construction period rent to realize immediate revenue
upon the expiration of prior leases set to expire on July
31, 2015, and the County retains control of any future
site development laying the path for future economic
development progress and job creation for generations
to come.
Citing the success of the attorneys’ effort to meet
the project goals on behalf of Nassau County, County
Executive Mangano applauded the lawyers work: “As I
know others have already remarked since the start of
this process, [PLDW Partner] Josh Meyer and his team
are well-deserved of our praise and gratitude for the
work they accomplished to bring the Coliseum back to
life with private money and to revitalize our economy for
years to come.”
In October 2013, the lease was signed by NEC and
Nassau County.
pldw engagement and legal services performed
• Obtained private financing for the redevelopment of the Nassau Veterans Memorial Coliseum and the surrounding area, including
building a new mixed-use sporting and concert venue and entertainment district.
• Researched and drafted grant applications for Federal, State and local funding opportunities for the Coliseum site, securing a
$500,000 grant.
• Drafted the Request for Qualifications (RFQ) seeking a private developer for redevelopment of the Nassau Hub and negotiated the
memorandum of understanding and facilitated the procurement process.
• Drafted the Request for Proposals (RFP) for the “Redevelopment of Nassau Veterans Memorial Coliseum Site” and facilitated the
procurement process.
• Conducted simultaneous lease negotiations with the RFP finalists: The Madison Square Garden Company and Nassau Events Center,
LLC (NEC).
• Guided the lease agreement with NEC through Nassau County’s approval process and presented before multiple local entities
including:
::Nassau County Planning Commission
::Nassau County Open Space and Parks Advisory Committee
::Nassau County legislative committees including Rules Committee, Finance Committee and Economic & Community Development & Labor Committee.
::Nassau County Legislature
• Drafted the final lease agreement.
• Managed the process and terms of the final agreed upon contract between NEC and Nassau County, through to the contract being signed in October 2013.
PLDW
PANNONE LOPES DEVEREAUX & WEST
81 Main Street, Suite 510 White Plains, NY 10601
tel 914 898 2426 • fax 914 898 2401
LLC