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Jan 16, 2013 11:15 AMPublication: The Southampton Press

Coliseum Deal At Heart Of Accusations Against Tribe Leaders

Jan 16, 2013 11:40 AM

The five members of the Shinnecock Indian Nation who were ostensibly ousted from their official tribal positions last fall had been in the midst of crafting a deal in which the tribe would have purchased the Nassau Coliseum and surrounding property, along with thousands of acres of other land around Nassau and Suffolk counties, with the help of a multibillion-dollar real estate hedge fund.

The ambitious deal became the lynch-pin of the case against the five men, who were painted by critics within the tribe as having concealed their plans from other tribe members and leadership, and possibly having motives other than tribal benefit at heart.

The men—Tribal Trustees Lance Gumbs and Gordell Wright, Shinnecock Gaming Authority members Barre Hamp and Phil Brown, and consultant Charles Randall—have steadfastly denied any ulterior motives or wrongdoing. They have argued that the still conceptual negotiations they were involved in over the Nassau Veterans Memorial Coliseum property were following the normal process by which a number of potential tribal acquisitions in recent years have been handled. They were working to bring the deal to a stage where it was ready to be executed and could be explained in detail to the broader tribal membership and brought up for a vote of approval.

Conversely, the men have accused other tribal leaders, Trustees Chairman Randy King in particular, of having kept far more developed and detailed deals—including one to purchase a large parcel of land adjacent to CitiField, the New York Mets baseball stadium in Queens—hidden from even upper level tribal officials.

The accusations against them, and the squashing of the deal the men had arranged with investors, a hedge fund known as Och-Ziff Capital Management Group, are the tip of the iceberg, the men say, of a host of efforts by Detroit casino developers Michael Malik and Marian Ilitch to gain a stranglehold on any potential tribal development deals and hamstring the tribe’s ability to pursue economic projects beyond those it has agreed to with Mr. Malik and Ms. Ilitch’s company, Gateway Casino Resorts.

“He saw that we had found someone else who was ready to work with us, so he had to stop it,” Mr. Randall said in an interview last week. “[Och Ziff] suddenly had access to a half billion [dollars] worth of Long Island deals that they had no prior knowledge of, so they were eager to get on board with us on the ground floor. Malik couldn’t have that.”

According to details of the Coliseum deal shared with The Press by Mr. Randall and the other men, the acquisition would have focused on the purchase of the property as a real estate investment and potential revenue generator, exclusive of the property’s potential for casino development down the road. The tribe and their private investment partners were pledging to build a new arena to replace the 40-year-old Coliseum, the home of the NHL’s New York Islanders, and develop a host of retail, hotel and other uses on the 77-acre property, which is largely vacant other than the 18,000-seat Coliseum building.

“We would have controlled that beautiful piece of property,” Mr. Randall said. “We wanted to create an entertainment destination with the accessory facilities. It was an investment in future returns.”

Perhaps most significantly, the purchase of the property would have positioned the tribe to be a landlord with prime space available for a casino development by any commercial gaming group, if and when Governor Andrew Cuomo’s proposal to legalize a limited number of casinos in the state is approved by voters, Mr. Randall noted. It would also have given the tribe a potential revenue source while its casino aspirations are brought to fruition.

The tribe and representatives of Gateway had been a part of negotiations with Nassau County Executive Ed Mangano’s office in 2011 about making a Shinnecock-run casino the anchor of redevelopment of the Coliseum property. But in June of that year, Mr. Mangano announced that a tribal casino deal was off the table, and that the county would hold a referendum on a $400 million bond for the renovations and rent the Coliseum to the Islanders for $14 million a year. Just a week later, the tribe and Mr. Malik announced plans, with Mr. Mangano’s blessing, for a casino development attached to the Belmont Race Track.

But Mr. Randall says that when the referendum failed spectacularly at the polls that August, he almost immediately heard grumbling that the county would entertain a new Shinnecock proposal for the redevelopment of the site. “From that day on, it was always in the background that this was not the end of it,” Mr. Randall said. “But Malik and Ilitch were working with the Wilpons on the site by [CitiField] by then, so they weren’t interested.”

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