Come See THE FUTURE .... It's Always Sunny and Happy in the Year 2065.
For those of you who wonder about my philosophies sometimes, allow me a second to clarify it a bit. I am for smaller government. I think the private sector and a good business climate will provide almost all the opportunities a country's citizens need. However, we do need some regulations, and we need some government to provide the basics for and to protect it's citizens. So, I am often fascinated by the tug of war that goes on when Business and Government collide head-on, like two cars blowing a stop light at the same time....
Last month, we discussed the Kingsburg Coal Plant, which Santee-Cooper scrapped due to the added expense of Cap and Trade regulations, costing Lower Florence County a $2.2 billion investment. We felt it was a perfect example of government run amok, and it dictating what the private sector should do, but we disgress - it's already been discussed. Today, we have another battle raging here in Long Guyland - the $3.8 billion Lighthouse Project.
What is the Lighthouse Project? It will either be the greatest economic boom to suburbia in history, or a perfect example of a bloated boondoggle. It is the brainchild of Charles Wang and Scott Rechler. Wang is the owner of the NHL's New York Islander franchise, a team that ruled the league and packed the Nassau Coliseum in the 70's and 80's... Tough times have plagued the Isles for the past 15 or so years - bad drafts, bad signees, and the inability to get good players because the Coliseum is a ...... well, it's a shithole. I went to a game once - I was in the Upper Deck, about 5 rows from the top, and all I saw was a giant cement pillar blocking my view of the whole game. And they lost as well....
Yes, after 40 years, the Nassau Coliseum is the Ebbets Field of the modern day Sports/Entertainment venue. It needs to be replaced. And just like 50 years ago in Brooklyn, a fight between owner and local government goes on. Wang has proposed a massive project that includes a new Coliseum and Sports Medicine facility, a shopping area that includes 2 canals, a pair of 35 story office buildings, a 5 star hotel, 2300 new apartments and condos, a movie theater, and over 1.5 million square feet of new retail space. They did forget about the NASA launching pad, but that might be part of Phase III.... Mammoth indeed.
Now, the local township board (Long Island has townships, not invidual city governments) has and wants it's say in the matter. They need to approve environmental aspects, rezoning, and a bunch of other things as well. Depending on who you're listening to, they're either protecting their community, or trying to bust the balls of a major power broker in Long Island. It's not like Nassau County and Uniondale aren't already developed - the whole county is one giant parking lot - you can't even tell what town you're in because they just run from one into the next.... But, they have a lot to look over. The DGEIS environmental report is over 4000 pages alone - 4 times longer than the Health Care Bill Washington is currently mulling over....
There was a contentious meeting in town this week, where Wang and his staffers tried to answer the Town Board's questions, and it was not pretty. Meanwhile, the Islanders were playing a preseason game - in Kansas City's new Sprint Center - hint, hint. Unfortunately, only 9000 fans came to the 19,000 seat arena. And the Islanders lost... Sometimes, it seems odd to give a developer so much grief for a project that involves no public money, but....
So, what is the right thing to do? Loveable losers they are, keeping the Islanders and a viable concert hall in the 11th largest market in America is paramount. The Coliseum needs to be replaced, but what about the rest? I've been thinking about this for a bit, and as usual, the answer is in Economics. I have a good buddy, Joe, here. He's a partner in a CPA firm in Manhattan - yeah, he does pretty good financially. The guy is one of the smartest fiscal minds I've seen. I try to learn all I can from him, but even my Economics degree brain has trouble keeping up with him at times. Here is Joe's take on Lighthouse, and it makes a lot of sense.......
Build the Coliseum. There is only one other, and it's going to close when the new one opens. However, all of this retail and office space is the problem. Right now, the local office and commercial Real Estate market is glutted with excess space. There are buildings and land of all kinds available as it is. Joe says the private housing foreclosures are about done, but the Commercial foreclosures haven't even started, and the banks holding the notes on those are getting ready to get slapped again. Wang doesn't have $3.8 billion in his wallet - he has to borrow it, and if he defaults, the bank holding the note goes down as well - TARP 3.0 then begins....
Either of two things will happen: Lighthouse is a success, and many of the smaller office space owners go belly up, or Lighthouse bombs, and a project that very few companies can afford to invest in fails, leaving a huge dinosaur on the landscape. That, and apartments and condos that cost anywhere from $230,000-500,000 each are no bargain either. Either way, Lighthouse has the potential to be an epic sinkhole for the entire local economy. We don't need another shopping center.. I'm 60 miles outside of New York, and I can buy Swarovski crystal, Michael Kors shoes, Williams-Sonoma and high end clothes from 50 different stores around the corner. We already have it all.....
The Town Council may not be aware of it for the right reasons, but they may be doing the local merchants a service. Of course, there is a compromise. Build the Coliseum, and save one of the things that gives Long Island it's own identity. Brooklyn lost the Dodgers, and they're still trying to get it's feet back. As far as the rest, there is a huge downside to it. It seems a bit arrogant of me to tell a guy who makes more in a year than I will in my whole life what to do, but I'll do it - keep it simple, Stupid....
.
No comments:
Post a Comment