The Puck Stops Here

If a sports arena is profitable,
why should government pay for it?

As the debt ceiling "debate" reached its climax in Washington last week, a public referendum was held in Nassau County on Long Island which epitomized some of the worst aspects of American politics in the present era: elected officials utterly out of touch with their constituents, wealthy patrons rigging the rules to benefit themselves, and their lapdogs in government only too happy to oblige them.

On August 1, county voters weighed in on a proposition to borrow $400 million in public funds to overhaul the Nassau Coliseum, the inarguably shabby home of the New York Islanders, and to build a number of additional neighboring amenities. The measure was roundly defeated by more than a dozen percentage points, a result far more lopsided than it seems. The choice of a Monday in August, an exceedingly unusual day for voting, was a transparent attempt to suppress voter turnout, on the presumption that it would give a strong advantage to the plan's ardent supporters by keeping most other county residents in the dark. It seems that even deviousness eludes the inept Republican administration currently in charge of the county's business.

The front man for this project was Edward Mangano, the neophyte county executive who rather unexpectedly won his job in 2009 in the midst of the Tea Party's indiscriminate fervor. The real power behind this deal is Charles Wang, owner of the Islanders and former CEO of Computer Associates, a firm that he founded and ran with unconcealed ruthlessness, and whose financial stewardship has been the subject of any number of ongoing investigations and lawsuits. His successor as head of the company was convicted of accounting fraud in 2006 for overstating revenue by some $2.5 billion, among other oversights. That Wang's one-time status as the highest paid CEO in the United States was perhaps predicated upon what turned out to be phony accounting is a matter that will no doubt occupy shareholders and the courts for years to come.

Perhaps if the Islanders hockey franchise were represented by a more likable owner, or if the county executive hadn't just presided over a state takeover of the county's parlous finances for the second time in the last two decades, or if the economy hadn't been sputtering badly for the last three years, or if the Islanders hadn't been languishing in last place for more seasons than its fans care to remember, the referendum might have had a fighting chance of being approved. A perfect storm of municipal insolvency, high unemployment, crushing taxation and voter resentment hardly made this an auspicious time to attempt to saddle the county's famously overburdened taxpayers with hundreds of millions of dollars of additional debt, and for a project that would be of little if any value to the vast majority of its residents. Why did the county even try it? And why would it throw in its lot with a man whose reputation is already beyond redemption?

First, a bit of history. For most of the 20th century, the suburban counties surrounding New York City were bastions of the Republican Party, who ruled almost without interruption for decades at a time. Generations of families learned how to get along with a system that required them to make nice with the ruling party. Before a teenager could even apply for a summer job in a county park, to use a common example, his parents had to make sure that their membership in the Republican Party was up to date. Corrupt? No doubt. However, it survived for ages because it was not the Republican Party of George W. Bush, but of Nelson Rockefeller. It was a decidedly less ideological and more circumspect organization, conservative to be sure, but only too happy to bestow its largesse upon a willing population, and to build a suburban paradise both for its own glory and for the benefit of its residents. Only when Nassau County's finances, like all of Long Island's buildings, turned out to be built on sand, did the Republicans finally lose their permanent grip on power. Changing demographics also played a part. As early as 1992, when Bill Clinton carried the county rather convincingly, it became plain that Nassau, like its neighboring Long Island county of Suffolk, was no longer as reliably Republican as everyone had thought. Perhaps it never had been.

Like the rest of the country, Nassau has weathered vast economic and social change. The disparity between rich and poor has grown ever wider. A virtually all-white, middle class population, in which most fathers commuted to work in New York and most mothers stayed at home, has been transformed into one in which the vast majority of men and women have long eschewed a daily trip to Manhattan on the Long Island Railroad in favor of a daily traffic jam on the island's famously clogged highways. The island has become as ethnically and racially diverse as any other place, though more residentially segregated than almost any other place. Real estate, which had long been the suburban homeowner's most stable and indispensable investment, has ridden a roller coaster of price bubbles and collapses. The state's increasing parsimoniousness has forced local school districts and other municipalities to fend largely for themselves, leading to a grossly inequitable burden of property taxes and ugly annual battles over local budgets. The area's once pristine parks and beaches have grown old and unkempt, its parkways lined with uncollected litter, its dilapidated public buildings maintained to the barest minimum standard.

Against this backdrop of economic decline and public disgust, what would possess the county to undertake last week's vote? It's easy to understand the motivation of Wang, who, in his billion-dollar bubble, is probably as blissfully unaware of the plight of the average taxpayer as he once was to the fate of the thousands of excessed employees of the numerous leveraged companies that he bought and sold like so much rubbish. As the wealthy have grown even wealthier in relation to the rest of the people, they have less reason than ever to notice the existence of the lesser classes, let alone consider what they think about anything. In the CEO's isolation, a public vote to increase the public debt is merely a game to be played to get what he wants. But what was in it for Mangano, the county executive? Did he imagine that a glitzy new home for the island's sole professional sports team would elicit such gratitude from the teeming masses that they would forget all about the price tag? Did he think that the Tea Party sympathizers who helped him to defeat a far better-known scion of a prominent political family would just look the other way?

By all accounts, this was an uncharacteristic move by Mangano. Prior to becoming county executive in 2010, he had been a county legislator for 14 years. A friend of mine who knew him in a professional capacity thought he had a well-earned reputation as a decent, honest, accessible sort of politician. Perhaps he just got in over his head. More likely, having risen to the top of the local political echelon, he quickly discovered that courting the favor of the rich and famous is simply how business gets done. Compared to the influence and deep pockets of well-heeled donors, through whose good graces big ideas come to fruition, the hard slog of democracy is for chumps. The result is corporate welfare at its very worst. Had this proposition succeeded, the county's residents would have been stuck with the bill for a facility that could have earned Wang and his cohorts untold millions in profits, while the average fan would have probably been unable to afford to take his family to a game there. But that's okay with the folks at the top, because there are still plenty of high-flyers in the area, and their political contributions typically carry a lot more weight than the votes of the losers in the cheap seats. But not this time.

Let's set the record straight about one thing: in their heyday in the late 1970s and 1980s, during which time the Islanders won the Stanley Cup four straight times, they had no greater fan than yours truly. Bobby Nystrom's overtime goal in game six of the 1980 finals against Philadelphia, which sealed the team's first championship, was the single most exciting moment I have ever experienced as a sports fan. Just remembering it still gives me goosebumps. Though they've given their supporters little to cheer about on the ice over the last two decades, the team remains an important part of the island's identity. Still, if I had a vote in Nassau County (which I don't, being now a Suffolk resident), I would definitely have voted 'no' last Monday. The Coliseum may indeed be in a disgraceful state of disrepair, but at a time when teachers and civil servants are being laid off by the thousands, the very idea of expending a dime of public money on rebuilding it is an outrage.

Corporate hucksters have been playing this trick on the public for decades. They threaten, "Build me a new stadium or we'll move out of town." On the shaky grounds of civic pride and questionable economics, politicians surrender to this blackmail more often than not. Few have the nerve to withstand this pressure. But there is the occasional refreshing counter-example. While he was mayor of New York City, Ed Koch, no sports fan himself, reacted dismissively to the suggestion that the New York Giants, who had just won the Super Bowl and who actually play across the Hudson River in New Jersey, should be honored by a parade in Manhattan. He infamously said, "If they want a parade, let them parade in front of the oil drums in Moonachie", referring to an obscure town near Giants Stadium that he coyly mispronounced as "Manoochie". It was not only a priceless example of urban disdain for the featureless 'burbs, but an implicit disregard for those who would have the audacity to abandon their home town to seek a more lucrative deal in some less scrupulous politician's backyard. Regrettably, few people in government have Koch's guts.

Fortunately, enough ordinary Nassau County voters got wise to the scam for a change, and weren't suckered by arguments of craven politicians who have far more to gain from rebuilding the Coliseum than the public does. For once, voters of the right and left, who are usually so effectively split by ideological manipulation, made common cause against an attempted theft of public funds by an already obscenely wealthy individual. If there's money to be made in a sports franchise, there is no earthly reason why its owners ought not to be able to make it without feeding at the public trough. For that matter, why should any corporation be awarded tax breaks or other sweetheart deals in order to grace a particular municipality with its presence? When politicians cave in, they ignite a competition among cities, counties and towns to see who can offer the best financial terms, the least restrictive zoning, the most pliable regulators. For taxpayers to pick up the tab so that someone else — in this case, a company's owners — can personally benefit, is socialism by any other name. Organizations as diverse as symphony orchestras, art museums, child welfare agencies and drug treatment centers are told constantly by the government that the well is dry: you've got to learn to make it on your own. Why doesn't the same hard-headed meanness apply to the owners of sports teams or any other company? Build your own damned arena.