Las Vegas Sands Casino proposal faces lengthy court fight, experts say

Newsday

20 November 2023

Las Vegas Sands Casino proposal faces lengthy court fight, experts say

A $4 billion casino resort proposal at the site of the Nassau Coliseum could get tied up in court for years, legal experts say, over whether county officials skipped state environmental requirements and were pressured to fast-track a lease for the area's largest private investment in more than 15 years.

The next steps in Las Vegas Sands' plan could hinge on a decision from the state Appellate Division, Second Judicial Department, where Nassau County is appealing a Nov. 9 lower court ruling that voided its lease with the Nevada-based company.

Attorneys for Hofstra University, the plaintiff in the case, are expected to file papers Tuesday arguing why the 99-year lease should remain voided. The county was granted a temporary hold on the lease while it appeals the ruling.

The outcome could allow Sands to continue to occupy the 72-acre county property in Uniondale while it gains the required approvals to keep the lease. Or the company could lose control of the site, endangering its bid for a state gambling license and requiring it to restart its quest to build its New York flagship location.

At issue is whether Nassau County, legislators and the planning commission in spring 2023 hid the lease from public scrutiny and should have conducted a full environmental analysis under state law when it entered the agreement with Sands in exchange for $54 million.

State Supreme Court Judge Sarika Kapoor ruled Nassau violated the state's Open Meetings Law and the State Environmental Quality Review Act, known as SEQRA. Her decision annulled the lease agreement between the county and Sands that was approved by the planning commission and by a 17-1 vote of the county legislature.

Adam Schuman, an attorney representing Hofstra, argues there isn't a reason for Sands to keep the lease even as the county makes its appeal. Hofstra opposes the temporary hold that left it in place.

Schuman said the county is free to do what Hofstra initially had asked and what Kapoor ordered: return to the planning commission and allow adequate public comment and environmental review. It may take less time than going through the appeals process, he said.

Kapoor's decision "reaffirms that government entities will be held accountable if they act in violation of the public's right under state law to be heard and participate in decisions of public importance," Schuman said. Attorneys for Nassau have denied the county tried to conceal the lease agreement.

While an appellate court judge could expedite the case, "Routine cases right now are taking years in front of the second department," said Yvonne Hennessey, a litigator based in Albany who chairs the state Bar Association's environmental law section and is not involved in the case.

"A lengthy delay is often discouraging for people wanting to invest," said Hennessey, who often represents developers.

The judge's ruling that an environmental review was needed before the lease was approved is unusual, legal analysts said, because typically the reviews occur after a developer is granted control of the property and seeks permission to build.

Todd D. Ommen, professor at the Elisabeth Haub School of Law at Pace University in White Plains and managing attorney of the school's environmental litigation clinic, said: "It's not really what I would consider the normal course like when a large project goes before a municipality."

Previous proposals for the Coliseum site underwent environmental review in the Town of Hempstead, where the property is located. Town officials said the process had been underway for Sands' proposal before the court ruling put it on hold.

Ommen said the county considered only the transfer of the lease from the previous lease holder to Sands, which he said is permissible. But he said from Kapoor's standpoint, "The county avoided doing a complete environmental analysis that would take into consideration the scope and nature of the casino development. They simply looked at the environmental aspect of transferring the lease."

Ommen said the county's perspective is that it was "just a transfer of control of the site itself, which doesn't come with environmental harms."

Kapoor's decision cited an email exchange that supports Hofstra's claim that county officials intentionally tried to avoid public scrutiny of the project and the lease agreement negotiated between Nassau County Executive Bruce Blakeman and Sands executives.

The April 21 email, with a draft of the lease agreement attached, was sent from Sands' general counsel to Nassau officials and attorneys saying they had "marching orders" from Blakeman and Sands CEO Robert Goldstein to "get this done" by April 26.

Blakeman and Goldstein appeared together in an April 26 news conference announcing the lease agreement. It was approved by the planning commission April 27 and by the 19-member legislature in May, where Republicans hold a 12-7 majority.

Sands had been for nearly a decade scouting locations in New York for a casino resort and reached out to Blakeman, a Republican, soon after he was elected to office in 2021.

Neither Blakeman nor Sands executives were willing to comment on the email exchange.

A Sands spokesman in a statement said: "We are moving forward with our plans for an integrated resort and entertainment center at the Nassau Hub and our mission of community engagement. Long Islanders can look forward to continuing procurement programs for local businesses and minority, women, and veteran-owned businesses that want to participate in this opportunity, upcoming basketball youth clinics, and our Season of Sparkle holiday events at the Nassau Veterans Memorial Coliseum."

Blakeman spokesman Christopher Boyle said the project is moving "full steam ahead."

Asked whether there was "an attempt to avoid public scrutiny" as Hofstra alleged and Kapoor's decision upheld, Boyle said: "Considering the county executive held numerous press conferences and attended public meetings outlining and supporting the proposal, that would be a completely false and erroneous observation."

The question of whether the county would return the $54 million it gained from granting the lease to Sands remains. Boyle said "the county executive is fully committed to seeing the transaction through to the end."

Watchers of the Coliseum property and those involved in past proposals to revitalize the former home of the New York Islanders say this is the latest legal hurdle to creating an economic engine in the center of Nassau County.

Kyle Strober, executive director, Association for a Better Long Island, which advocates for economic development, said "the multigenerations efforts" to reinvent the property "reads like a Long Island version of 'War and Peace.' "

He recalled how the development known as "The Lighthouse," pitched by the late Charles B. Wang in 2009, failed.

Then-County Executive Tom Suozzi endorsed the $3.8 billion plan by Islanders owner Wang and developer Scott Rechler to erect twin 31-story towers and renovate the Coliseum as the anchors for a 5.5 million square-foot development that would create a mini-city.

After political wrangling by Republicans on the Hempstead Town Council, the project was killed by the zoning board. A scaled-down version was rejected, and Wang moved the hockey team to Brooklyn a few years later when Nassau voters turned down a bond referendum that would have built a new Coliseum.

It was the last time a project of Sands' magnitude was an option.

In 2018, Rechler submitted a $1.5 billion project that included 500 housing units and up to 800,000 square feet of office, biotech research and retail space.

"This latest chapter reflects the Long Island development process that has never been for the faint of heart," Strober said. "While there is opposition, one difference in this chapter is that there appears to be meaningful support from both political parties and local stakeholders. That was not the case for the Lighthouse proposal and Nassau Coliseum bond referendum, which drove the Islanders to Brooklyn."

WHAT TO KNOW

Las Vegas Sands'$4 billion casino resort proposal at the site of the Nassau Coliseum could get tied up in court for years, legal experts say, over whether county officials skipped state environmental requirements and were pressured to fast-track a 99-year lease.
Attorneys for HofstraUniversity, the plaintiff in the case, are expected to file papers Tuesday arguing why Sands should not keep the lease while the county appeals a court ruling that voided it.
The outcome couldallow Sands to continue to occupy the 72-acre county property and gain the required approvals to keep the lease, or lose control of the site, endangering the company's bid for a state gaming license.

Adam Schuman, an attorney representing Hofstra, argues there isn't a reason for Sands to keep the lease even as the county makes its appeal. Hofstra opposes the temporary hold that left it in place.

"A lengthy delay is often discouraging for people wanting to invest," said Hennessey, who often represents developers.

Environmental review