New York Islanders still have a shot at a new arena
Friday, 05 August 2011 14:53
BY EVAN WEINER
THE BUSINESS AND POLITICS OF SPORTS
For the New York Islanders owner Charles Wang, the disappointment of losing an arena referendum in Nassau County last Monday was not the end of the road in terms of getting his Uniondale, New York-based New York Islanders a new arena. It was just a hiccup although if you read hockey writers accounts in both the New York and from the self proclaimed world's best hockey writers market, Toronto, it is all over for Wang. He should pack up and get out even if he has four years left on his lease because it will not happen for the Long Island businessman in Nassau County.
Wang, who spent part of his childhood in Queens, won't ever get a new arena in Nassau County according to the ones with supreme hockey knowledge and in fact one titan of the Toronto hockey writers Parthenon, the noted public policy and economic expert Damien Cox, suggested that the Islanders problems stem from Wang himself. Cox should stick to something he might know about — talking to hockey insiders about proposed trades, coaching or general manager changes — and leave the public policy writing to experts who understand property tax hikes, funding mechanisms for arenas and stadiums and whether a sports venue is an economic engine.
Cox probably has been to a New Jersey Devils game in Newark, New Jersey and if Cox and the rest of the enlightened thinkers who turn out daily rabble about hockey had any understanding of what they try and write about in the business arena of sports, Newark is a perfect place to start an urban policy lesson.
Newark was the apple of the eye of the former owners of the New Jersey Nets back in the 1990s and into the early part of the last decade. The Nets ownership planned to build an arena there and when it didn't happen, the Commissioner of the National Basketball Association David Stern called New Jersey politicians some names and said the politicians "blew it."
Funny thing, the New Jersey Nets franchise of Stern's NBA is using the very land on which the arena that was built after the Nets-Newark arena talk meltdown that the Nets ownership and Newark were planning. The team is renting dates at the building until a Brooklyn arena opens up. The New Jersey Devils ownership jumped into the void and worked out a deal with Newark to build a facility in a public-private partnership.
For Cox and the rest of the hockey hacks, perhaps some facts should be explained to them so they write better columns. In the sports stadium/arena game, no never means no even if voters say no.
Here are some examples of where the voters were sadly mistaken in the voter’s booth after rejecting a sports venue. Seattle, Pittsburgh, Milwaukee, Charlotte and Ramapo, New York eight miles north of the New Jersey-New York border at Montvale.
In the early 1990s, Major League Baseball Commissioner Fay Vincent was terrorizing cities in hopes of getting a new ballpark in places like Cleveland. No new park and your team will be moved. In an awful lot of places the threatening tactics worked. Cleveland can up with a "sin tax" with tax hikes on cigarettes and alcohol to help pay for a new Cleveland baseball park. The explosion of stadium and arena building in the United States started after the 1986 tax reform and owners noticed that a large loophole existed if a municipality put up funding for a building. The municipality could take as little as eight cents out of every dollar earned inside a facility and use that money to pay down the stadium or arena debt.
All the possible relocation threats worked as almost everyone got a new stadium between 1986 and 2011. Only two franchises in baseball are looking for new facilities, the Oakland A's owner Lew Wolff and the Tampa Bay Rays owners. Just about every minor league ballpark has been replaced or renovated since the 1990 Major League-Minor League development pact.
King County, Washington, Allegheny County, Pennsylvania and Milwaukee residents said no to funding ballparks in votes. But the elected officials knew better and put new stadiums in those cities. Washington state lawmakers imposed tax hikes in restaurant, hotel and motel and restaurant tabs to fund a new Mariners home. There was a six county sales tax hike around Milwaukee to fund that city's new ball yard and A deal was crafted for Pittsburgh to build a new baseball facility and a new football stadium.
In the summer of 2010, Ramapo, New York voters overwhelmingly said no to a publicly funded minor league style baseball park only to see the Town Supervisor and the town council nullify the vote. Ramapo residents have no idea what the final tab on the stadium will be but they will be paying for years for a park that was built for a team in a financially shaky independent baseball loop, the CanAm League.
In the 1990s, stadium building was viewed as an economic engine which has over the decades proven to be false. The jobs created are mostly
per diem and minimum wage positions.
Still the stadiums kept being built. Middle and small markets like Nashville, Jacksonville, Charlotte and others began competing with the big boys and one of the biggest, the Los Angeles-Anaheim market, lost two National Football League teams following the 1994 season when Georgia Frontiere took her Anaheim-based Los Angeles Rams to St. Louis and Al Davis moved his Los Angeles Raiders back to Oakland after a deal had been conceptually worked out that would have kept Davis in the Los Angeles area. Art Modell moved his Cleveland Browns to Baltimore after the 1995 season when he was unable to get a new stadium, Cleveland threatened to sue the NFL and viola a deal was worked out, Cleveland built a new stadium and the NFL put an expansion team in the city in 1999. Houston and St. Louis also regained teams.
The National Basketball Association was not beyond using relocation threats. Leslie Alexander wanted to move his Houston Rockets along with his WNBA and indoor football team and flirted with Louisville. Houston voters got the message after saying no to an arena referendum and said yes. Ken Lay, the disgraced Enron CEO is a major player in getting a Houston baseball park approved, there seemed to be annual Larry King "exclusives" back in those days in his USA Today column that insiders told Larry that John McMullen (who also owned the New Jersey Devils) was moving his Astros to Washington.
After George Shinn could not get a new basketball arena built for his Charlotte Hornets, Shinn took his team to New Orleans. Despite voters saying no to a new arena in Charlotte, the city officials worked out a deal to build a new venue in exchange for an expansion franchise.
Wang's biggest deficiency is that he has publicly not taken the threat road and in the stadium/arena game that is a big stick. Nassau County politicians have basically shown Islanders owners like Wang and before that Howard and Ed Millstein and Stephen Gluckstern the door like an overbearing landlord hold an iron clad lease. In the late 1990s, Millstein thought he had a deal to build a new arena and that fell apart.
If Wang wants some leverage, Queens political and business leaders are interested in bringing the team west to the Mets ballpark/tennis center area or work out a deal to share the Brooklyn arena that will house the Nets. Back to Cox, surely he knows that the Toronto Maple Leafs-Raptors home building was half done when Maple Leaf Enterprises took over the basketball-only building and turned it into a multi-use facility.
Nassau County lawmakers are suburbanites and not used to dancing with major league hitters but then again Wang has not been blustery about his problems like former Devils owners, the late John McMullen who never missed liking a city with an arena that was better than the Meadowlands like Hamilton, Ontario or Hoboken. McMullen never did get his Hoboken building constructed but the Devils franchise controls a building in Newark.
A lot of people look at sports as a well, sports. It is a business, Wang will have more shots at the net; all he needs is one to go in while playing the arena game. He was never going to win last week's referendum, his pitch for the building was very weak and National Hockey League Commissioner did not issue the requisite threats. Also Nassau residents have been bombarded with the "nattering nabobs of negativism" — radio talk show hosts and cable TV carnies who constantly rail against the government and government spending. But New York has built four baseball stadiums (Bronx/Yankees, Queens/Mets in a city-state, private partnership, Brooklyn/Cyclones minor league team, Staten island/Yankees minor league team), one very expensive basketball arena in Brooklyn in a heavily subsidized project and has given Madison Square Garden a property tax break for nearly 30 years. There seems to be political will in Queens, maybe some in Brooklyn.
In New Jersey, Newark built an arena, the Jets and Giants with state aid negotiated a deal in a private/public partnership to build a new stadium even as the debt on old Giants stadium approached nine figures. That is how it is, no is never no.
Wang has some leverage and in the stadium/arena game, all you need is leverage even if you have four years left on your lease.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.