Las Vegas Sands Acquires Nassau Coliseum Lease for $241 Million over 99 Years
Recently, Las Vegas Sands Corporation invested a hefty sum to acquire a 72-acre plot in Long Island, New York, where they plan to establish a $5 billion integrated resort. This information was disclosed through a securities filing earlier this month, stating that Sands paid approximately $241 million in early June for the leasing rights to the Nassau Veterans Memorial Coliseum site and its surrounding areas.
As per the filing, $92 million of this amount was paid as a "goodwill" payment to Nassau Live Center, LLC - a company that has been trying to develop a mixed-use project on the Coliseum property since 2020. The remaining $149 million allowed Sands to obtain the leasehold rights and control of Nassau Live Center, LLC's related entities.
The Nassau Coliseum, which was home to the NHL's New York Long Islanders hockey team until they moved to UBS Arena at Belmont Park during the 2021-2022 season, has been under redevelopment efforts by Nassau County, the property's owner since its opening in 1972 and its surrounding parking lots.
Nassau Live Center, LLC, is overseen by Florida-based real estate developer Nicholas Mastroianni II, who procured the redevelopment rights from Nassau County in August 2020. His partnership with local real estate firm RXR Realty failed to bring their desired vision for the site to life.
Sands' Gamble
Sands is one of many casino companies preparing bids for one of the three downstate casino licenses soon to be issued by the New York Gaming Facility Location Board. With no domestic casinos in its possession since selling Sands Bethlehem in Pennsylvania in 2019 and its two Las Vegas Strip properties, The Venetian and Palazzo, in early 2022, Sands is particularly focused on New York.
While there's no guarantee that Sands' Long Island casino proposal will secure one of the three downstate gaming licenses, they'll still be required to make annual lease payments for the Coliseum site. They initially made a one-time "rent payment" of $54 million to Nassau County to assume the Nassau Coliseum lease. This sum will be accompanied by an additional $1 million payment to the county by the end of 2023.
Between 2024 and 2027, Sands will pay about $6 million yearly to the county. After that, the lease cost escalates to roughly $18.8 million per year for the remaining 94 lease years, amounting to approximately $1.77 billion.
Sands' All-In Approach
Sands' success in the gaming industry stems from its dominance in the Chinese market, particularly in Macau, and its Marina Bay Sands in Singapore. The company's executives express their eagerness to reenter the United States market, and New York stands out as a highly attractive opportunity with great potential.
During the company's third quarter conference call in 2023, Sands CEO Robert Goldstein described New York as "an extraordinary opportunity" with "unlimited appeal."
Despite this enthusiasm, Sands' securities filing acknowledges that the $2 billion they've already invested in their New York project may not benefit their shareholders.
"We purchased the Nassau Coliseum with the intent to obtain a casino license from the State of New York to develop and operate an Integrated Resort," the filing stated. "There is no assurance we will be able to obtain such casino license."
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Source: www.casino.org
