Jed Morey’s Blog

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Building a Rock Wall on Long Island

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I’m building a wall. Not in the figurative or symbolic sense, but an actual, solid masonry wall in my backyard, simply because there isn’t one there. A perfectly logical endeavor in a heat wave. Until this point my hands have been useful for typing, forming a fist to shake madly at the heavens and guiding utensils from plate to mouth in what is commonly referred to as eating. Never have I been accused of being handy, making my latest pursuit slightly quixotic to those who love me.

Upon learning of this latest quest, my friend Johnny Gallo immediately understood the anodyne meaning behind it. It was Johnny whose quiet inspiration prompted me to turn my dream of a backyard vegetable garden into a reality by offering encouragement, with a measured degree of sarcasm, and the necessary tools to get started. I have written before of his stoic, old-school character, which explains why he showed up one day with a tamper, trowel, level and well wishes as I began excavating the area that will someday be framed by this wall.  

Johnny instinctively knew my undertaking was, as he referred to it, therapy. It’s why he demurred when our wives implored him to partake in my madness, lest I mutilate myself in the process. He simply said, “Let the man be.”

Part of the insanity that my profession breeds is an incessant preoccupation with how things work, or more often than not, why they don’t. In this instance, constructing a secure and level foundation has my mind drawing the inevitable comparisons to the global economy, which is collapsing under its own weight.

Even my diminutive contribution to our home landscape requires careful planning and assiduous attention to detail, particularly to the foundation. The foundation itself changes slightly, however, with every layer of dirt that is uncovered. Like anything built to be sustainable, it’s what is below the surface that is most important to the future. You cannot plaster over pieces of our infrastructure without properly incorporating or eliminating them altogether. Consider the living—or dying—case study that is Detroit. Public officials there are contemplating, and in some cases already executing, a plan to raze enormous tracts of blighted development with the realization that a barren landscape is perhaps better than a crumbling one.

There is little doubt our current economy must be rebuilt and history may or may not provide the answers and insight we seek. For better or for worse, the financial markets in the post-bailout period are acting as opiates and somehow shifted from being leading to lagging indicators. Bankers and traders are surrounding the hookah and inhaling the smoke being burned by Congress and the Fed, engaging in what my friend Peter Klein from UBS calls “interest rate euphoria.”

In theory, low interest rates encourage lending and, as a result, growth. But our interest rates are so low the banks have been playing the ultimate arbitrage game by taking cheap money from the government and investing it in securities with a higher yield. And despite the decade-long data from Japan, who handled their enduring recession in precisely the same manner without success, we continue to blithely walk the same path. At some point, interest rates must rise and federal dollars must be put to some use other than filling bankers’ coffers.

Nevertheless, the administration is in a no-win position. We will never know whether or not we avoided a total cataclysm in the months following the banking collapse in late 2008. Perhaps we did. It’s hard to argue with the logic that the combination of stimulus dollars and miniscule interest rates staved off a second Great Depression. Even if this is the case, we are simply extending the pain and laying the groundwork for a deep and long-term recession.

Perhaps the most positive sign to come from the White House recently was President Obama’s decision to make a $2 billion investment into two huge solar manufacturers in the United States. Generating this level of interest in micro-renewable technology will put more than just the manufacturing companies to work; it will have a ripple effect to the building trades and ultimately benefit the residential market.

Everywhere, that is, but here on Long Island.

The one gigantic, jagged rock in our foundation that makes it impossible to build anything sustainable and participate in the renewable energy revolution is the debt load that drowns our local utility. Until our federal and state elected officials come to the realization that forward movement is impossible as long as we are hamstrung by the $6 billion albatross that is Shoreham, we are destined to tread water, or worse.

Biotech, pharmaceuticals, medical research and information technology are all sectors of our local economy poised for explosive growth. For years, business leaders and elected officials have been calling for a renaissance in these areas, but have been stymied by the intractable high cost of living. While school taxes receive the majority of our ire, the fact is our primary export is the talented youth we educate on the Island; the trick is to create a job market and economic climate that encourages them to stay. Working on a plan to reduce the Shoreham debt over the next decade will help level the playing field to attract companies to the region and allow LIPA to encourage and finance residential investments into renewable technologies. Perhaps we can dream so far as to close one of our inefficient, belching gas plants on the Island and even imagine the day LIPA is no longer necessary.

Should we continue to ignore this debt on Long Island, our foundation will remain insecure. And while America may indeed succeed in establishing a new foundation and build a new wall we can be proud of, Long Island may find itself on the other side of it.


Written by jmorey

July 8, 2010 at 9:28 pm

Tesla Motors: Electric Car IPO

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Nikola Tesla In His Lab

The latest and greatest darling of Wall Street, Tesla Motors, rocketed onto the Nasdaq Exchange under the ticker symbol TSLA in its initial public offering this week. The isolated enthusiasm surrounding this company belies a greater unease that crept back into the markets as investors grow increasingly wary of a global double-dip recession. Tesla’s rise to fame has also had the effect of highlighting the company’s namesake, Nikola Tesla, who endures as one of the most significant influences on science and technology in the modern world. Tesla, an investor in the late 1800s and early 20th century, was the father of technology such as alternating current (AC Power), hydro-electricity, radio signals (sorry, Marconi fans) and the modern engine, among myriad other staggering accomplishments in the field of science.

But Tesla’s resurgence can also be seen as a cautionary tale to those that followed him, the Tesla Motor company included. While Tesla’s achievements are arguably more significant than even his contemporary (and mentor-turned-adversary) Thomas Edison, he rarely receives the recognition he deserves, and has been curiously relegated to footnote status in American education.

Tesla, who was prone to disturbing visions and hallucinations, would be in good company with the delirious investors in Tesla Motors. But Wall Street loves a fun story and glamour wins the day over pragmatism, and thus the era of the $100,000 electric automobile is upon us. Despite the company’s own admission that profits are a distant dream, and an IPO with several government requirements and restrictions, America is at least (momentarily) talking about zero-emission transportation. The blessing and the curse of American ingenuity is we tend to think big. Big inventions sometimes have big repercussions that spawn big solutions with several inevitable repercussions of their own. And the cycle continues.

But if Tesla Motors has Wall Street on its side for now, Tesla the inventor virtually had it in his pocket for a brief period. JP Morgan and George Westinghouse were early supporters of his genius, but it was Morgan who pulled the plug on what may have potentially altered the course of power generation forever. Tesla constructed a tower with Morgan’s backing in Shoreham (how’s that for Kioli?) that, according to Tesla’s laboratory research, would have essentially electrified the earth and used it to conduct power, thereby eliminating the need for power stations and transmission lines. At the 11th hour Morgan shelved the project upon realizing this model for energy would have provided free power. Free anything in Morgan’s world was a bad thing. Herein lay the cautionary portion of the tale about glamorous projects that are supported by Wall Street and the government.

Tesla continued working and lecturing for several years before fading into obscurity and dying penniless and alone in New York City. Not dissimilar to the fate suffered by pre-grunge rock band Tesla, who currently reside in the “where are they now” file. But I digress. The important lesson to be learned is that the vagaries of our national agenda coupled with the powerful counter-interests of oil companies should be enough to temper the enthusiasm of any investor in the electric car market. Add to this a product whose hype centers on its ability to reach a speed of 60 mph in less than four seconds—the auto equivalent of “this one goes to 11” and Tesla redux has the makings of flash in the pan. (Yes, I have now gratuitously referenced Spinal Tap twice in one paragraph. Tesla, the band, inspired this line of thinking.)

The electric car requires a national recharging infrastructure as robust as the network of petroleum filling stations. While there are notable entrepreneurs in this field and a loose patchwork of government subsidies to encourage investment in this arena as well, the movement isn’t even in its infancy; it’s still in utero. Any combination of the oil industry lobbying against it, the government running out of subsidies and a product that is impractical and expensive, and Tesla could very well wind up as the subject of a documentary titled Who Killed The Electr… Hey, wait a minute!

For now, we will ooh and ahh over this bright, shiny new bauble and marvel at the possibilities of zipping silently across the country at 180 mph under clear blue, smog-less skies. Ultimately, clean energy will be accomplished in less sexy ways. Somewhere Jimmy Carter is shaking his head. What would be really weird is if he was rocking out to Tesla on his iPod while doing it.

BP and Obama: The President’s Public Relations Nightmare

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President Obama in Clinton-esque Form

Short of actually sticking the president into the gushing hole in the Gulf of Mexico, I’m not clear what exactly people expect Obama to do right now. This is a public relations fiasco that is as unprecedented as it is unwinnable and the response to his response has been puzzling to say the least.

Republicans accuse Obama of taking advantage of the spill to push renewable energy and clean technology. Um, OK. Democrats are lining up to accuse Obama of not emoting enough on television. I see. One can only surmise the proper reaction then would be to demand greater dependence upon fossil fuels during a nationally televised address where the president breaks out his hanky and furiously mops his brow while channeling his inner Jimmy Swaggart.

Pleasing pundits and demagogues isn’t of primary concern at the moment. The bigger issue is maintaining control of the situation and instilling confidence in the public. For this, Obama has the wisdom of “W” to rely upon. When Katrina hit the Gulf Coast, President Bush was excoriated for not visiting the hurricane-ravaged region sooner. Thus, President Obama has visited the region three times already and locals are furious his motorcade is gumming up the works and the public is charging him with seeking Clinton-esque photo opportunities on the beach.

That leaves us with the working men and women who rely on the Gulf for their livelihoods. Here again, a PR non-starter. On one side are representatives from the fishing industry lambasting the administration for not holding BP’s feet to the fire in processing claims immediately. On the other is the oil industry—incensed over Obama’s six-month moratorium on off-shore deep-water exploration—claiming the penalty for companies in good standing is too harsh and negatively impacting workers in the industry.

One can only imagine the prevailing sentiment in the Exxon Mobil board room is “there but for the grace of God…”

Ultimately the only issue I have with the president’s handling of the spill is in his characterizing it as the “worst environmental disaster America has ever faced.” This is a hollow proclamation that examines the spill in a vacuum. The worst disaster is our pernicious environmental policy agenda that allows ignominious corporations to reap enormous profits from our insatiable consumerism that is fueled by other less tangible, but wholly calculated corporate misdeeds such as planned obsolescence and the rise of industrial agriculture.

Thirty years ago the IXTOC I well in the Gulf of Mexico exploded and proceeded to pour approximately 140 million gallons of oil into the Gulf. It took eight months to cap the leak. The immediate effects on the fishing industry and wildlife from a spill this size are devastating. However, the long-term effects of an oil spill of this magnitude are reported, even by environmentalists, to be rather benign. That is to say, oil is a natural ingredient of Earth and over time it will break down and return again to its original form. None of this is any consolation in a situation that is as maddening as it is sickening.

In practice, our reckless pursuit of fossil fuels is less sustainable for humans than Earth. The great Chief and Faithkeeper of Onondaga, Oren Lyons, says it best: “Whatever happens to us will not have any impact on the world. In time, the world will regenerate. It will come back green, and the waters will be clean again. It’s just that there won’t be any people here.”

And there it is. Suicide by consumption.

What we require in the interest of self-preservation is leadership that demands investment, not into “bridge fuels” like natural gas exploration and inefficient ocean-based wind turbines, but into a massive micro-level renewable energy plan that can be easily adopted by the states. Renewable energy technology on a micro level is more portable and easily funded than quixotic pursuits of windmills and the folly of “clean” coal and “safe” nuclear power. The effort must begin at the top but be decentralized enough to allow the states to administer a plan to simultaneously curb consumption and reward conservation through economic incentives, thereby sparking a global manufacturing race.

Unfortunately, this agenda is neither sexy nor easily explained, but it can be inspired and effective. Either way, this recipe for environmental and energy independence success is a political recipe for disaster.

Written by jmorey

June 24, 2010 at 2:58 am

New York State Cigarette Tax Report

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Long Island Press Cover Image about Taxing the Indian Cigarette Trade

In a stunning revelation this week, the federal government has concluded the Shinnecock Indians are indeed Indians. The lightning pace at which they arrived at this determination can only mean we are days away from declaring independence from British rule and uniting the colonies!

This is not another column longing for the day when the United States comes to the realization federal recognition is a bogus, unilateral stamp of approval for a gaming license and has nothing to do with the qualifications of a group’s “Indianness.” It’s as ludicrous as it is insulting. It cannot, however, match the absurdly racist and discriminatory report authored by State Sen. Craig Johnson (D-Port Washington) and released the same week as the Shinnecock Nation celebrates the farcical honor of being told they actually exist.

The report issued by Johnson’s committee is the result of several months of testimony and supposed research into the issue of tax collection on Indian reservation territories within New York State. The fact the committee chose the one week everyone knew the Shinnecock Nation was to achieve, at the very least, a moral victory and celebrate its federal recognition offers keen insight into the scandalously insensitive nature of these lawmakers. While New York State is hamstrung by infighting and ineptitude and barely staving off a historic shutdown, this committee issues a report so rife with inconsistencies and backward logic that it could have taken minutes, not months, to produce.

The only thing that is clear is this speciously crafted report, replete with one-sided arguments, is intended to obfuscate the fact that The Empire State is the primary culprit in squandering enormous sums of potential revenue from cigarette taxes. By affixing his name to this report, Johnson is less of a patsy in this regard than he is a “cleaner”—much like Harvey Keitel’s “Wolf” character in Pulp Fiction, here brought in to clean up Albany’s mess.

Much of the text in the report is written in a decidedly patronizing tone that attempts to assuage the ultimate message to Indian tribes of New York: Pay up or face the consequences. The committee rationalizes this stance by ignoring the numbers given by its own tax department and instead recognizing the more advantageous figures given by people who stand to gain from legislation that would negatively impact the tribes. The testimony of the tribes was an exercise in futility as it is glaringly apparent this committee and the “powers that be” in Albany are determined to continue their centuries-old mission to ethnically cleanse Indians from New York through economic warfare.

Unfortunately, none of this is a surprise. What is utterly disheartening was the conclusion of the 20-page report. The final line of the report simply states: “The State should revoke its recognition of the Poospatuck Tribe.”

First of all, the tribe is Unkechaug. The reservation is Poospatuck. Second, not only is there no legal precedent for this ridiculous recommendation, there have been numerous opinions written by New York State itself declaring this idea (not the first attempt at this) unconstitutional.

This recommendation can only be classified in the following categories:

A)      Stupid
B)      Ignorant
C)      Racist
D)     All of the above

For those of you keeping score at home, the correct answer is “D.” Attempting to revoke the status of a nation that predates our own and eradicate an entire race is the type of Machtpolitik that should evoke terror in our society. We should bristle at this type of caustic political language that stokes the fire of hatred and intolerance. Instead, the headlines referring to Indians on Long Island revolve around speculation regarding the location of a Shinnecock casino now that the tribe is federally recognized.

Recently, veteran White House correspondent Helen Thomas made a similar remark recommending all Jews leave Palestine and return home to Germany, Poland, the United States, and “everywhere else.” Helen Thomas, at least, had the good sense to hang up her cleats after allowing us to peer into her cold, black soul. Hers was an epic lapse in judgment caught on video by a citizen journalist that went viral. Conversely, the recommendation Poospatuck be obliterated was carefully considered over a period of months and delivered as the kicker in an official government report. There is no apology that can mitigate what was written and every person on this committee has been revealed for what they truly are: bigots. Unlike Helen Thomas, however, I doubt any of them will have the decency to retire.

The New Long Island Association

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Kevin Law, the outgoing president and chief executive of the Long Island Power Authority (LIPA), has been chosen to lead the Long Island Association (LIA) in the wake of Matt Crosson’s departure. The lackluster performance of the LIA in recent years presents a challenge to the talented Law, but he is uniquely qualified to run the Island’s largest representative organization. Talent alone, however, won’t revive this body.

The LIA lacks a sense of purpose. While its board is comprised of an impressive array of successful business leaders, it has failed to coalesce in a decisive manner and make inroads on any specific issue. The most noticeable handicap in this respect is an unwieldy board size—there are 57 members. The Island’s biggest organization is top-heavy. This has created a problem of perception in that no one really knows what the LIA stands for. It’s time to hunker down and get tight on a handful of specific items instead of attempting to plug every hole in the dam.

Kevin Law, outgoing president and CEO of LIPA, is the new head of the LIA. But will he take the organization in the direction it needs to go?

Evidence of the LIA’s inability to marshal its resources in support of, or opposition to, a particular issue is in its governance structure. There are 16 separate committees ranging from small business to world trade, insurance to homeland defense and everywhere in between. No one organization can adequately micromanage this many priorities. Because Long Island is, by design, a sprawling set of disparate communities—each with its own gravitational center and culture—it’s nearly impossible to manage any one-size-fits-all plan.

Therefore the most immediate and effective declaration Kevin Law can make when officially taking the helm is to plant his flag squarely on the subject of economic development. Workforce housing hard to find? Brain drain getting you down? Tired of high taxes? There’s only one answer to all the issues the LIA has been dancing around: Money. The only way to get more of it into the economy is to attract more high-paying job opportunities into the region and create an environment where companies aren’t punished when they grow.

The art of messaging is critical when running an organization with the breadth and scope of the LIA. If Law can stay on message and focus on spreading the gospel of economic development, he will conquer the first difficult task of establishing a singular perception of the LIA. It’s a lot easier to negotiate with those who control the purse strings when they know why you’re there and what you’re asking for. This raises the next obvious question: What are we asking for?

I’ll keep it simple.

The LIA has been so focused on raising funds by hosting rubber-chicken dinners with generals and ex-presidents to cover for its own financial issues, it can’t focus on ours. Have one gala and a golf tournament if you need to get it out of your system then spread the wealth by getting more companies to pay dues. If you need extra funds, get them from the Regional Planning Commission—they’re not doing anything anyway.

Once the LIA’s bills are paid, Law can develop a comprehensive plan to deal with the two things we cannot escape: taxes and utilities.

Regarding the former: The only way to reduce, or at the very least hold, taxes on the Island is to woo more companies to do business here. This means coordinating the efforts of every agency with the ability to offer economic incentives and developing a press kit for Long Island. The Canon deal provided the blueprint. With Long Island’s press kit in hand, Kevin Law should be on the road six months out of the year visiting every burgeoning technology company in America with an iota of potential. I’m confident he can out-sell the guy from Bergen County, NJ or Lancaster, PA and convince some cool companies to come here. (Kev, call me. I know a great relocation specialist.)

On utilities: It’s payback time. The government rammed Shoreham down our throats then figured out we didn’t want it. Worse yet, they stuck us with the tab. Our utility bills will never go down with a $6 billion debt load we can’t shake. Therefore, I propose that every elected official on the Island sit down with Chuck Schumer and demand that the federal government commit $600 million per year for the next 10 years to principal debt reduction. In turn, we will agree to hold LIPA rates flat for the same period. The resulting positive spread will be reserved for retrofitting commercial and residential properties with renewable technology through LIPA’s existing rebate program. By 2020 the debt will be eradicated, our utility costs will be dramatically lower and then we can fold LIPA and get rid of a couple of power plants.

Easy peasy lemon squeezy. Now, on to that peace in the Middle East issue. It’s been on my to-do list for ages.

Written by jmorey

June 24, 2010 at 2:10 am

Our Addiction To Oil

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It isn’t money, love or greed—it’s oil. Oil makes the world go round.

Wars are waged over it and the weapons of war are powered by it. Films are made about it on film made out of it. It’s everywhere. Hell, what’s a slick or two between friends? Ashes to ashes, dust to dust. That’s what I say. It started out as pure darkness, undisturbed beneath the ocean floor or desert sand, and we beckoned it into the light and into our cars. Now it’s in the Gulf. Pay it no never mind. This is what we wanted. To be swimming in oil. Now we can. Drill, baby, drill.

Look at it move—that sexy, mucilaginous shadow slowly making its way through the water, preparing to lick the shore. I swear you can almost hear it purr. Drill, baby, drill. We consume it. Literally. It’s in our food, the animals we eat, the Vaseline on our lips. Now we’re having ourselves a good, ol’ fashioned Texas Tea Party. Come one, come all. Fill up your 10-gallon hats with our crude.

This isn’t a disaster, it’s a dream. No, a dream would be if it hardened. Then we could fill in that gap between New Orleans and Pensacola and drive on it. Pre-mixed blacktop. Why, just think of the development possibilities. I can see the real estate signs now: New Waterfront Properties on Oil Beach Preserve.

My God. What have we done?

Our sacred black lifeblood is hemorrhaging from the shortcuts we’ve taken. This is the moment we should all recoil in horror with hands cupped over our faces, staring unblinkingly, realizing the spectacle we are witnessing is of our own doing. The moment we see Tyler Durden for who he really is. We talk about our addiction to oil in distant and intangible terms because we never actually see the junk going into our veins. It comes from beneath the Earth’s surface, into a rig and through a refinery. Then it’s shipped on a barge, poured into holding containers and returned underground into gas tanks and boilers. The whole time it’s invisible to the naked eye. Then it evaporates when we use it and the process begins again.

Our addiction is only revealed when a break in the flow occurs and we come face-to-face with our demons.

Much of the attention paid to our oil addiction is focused on our consumption of the drug itself and finding new ways to get our fix. Renewable energy, bridge fuels, new areas of exploration. We seek answers in corn for ethanol, blasting through shale and developing technology to harness energy from algae, wind, sun and the tide. But what about the dealers?

It’s time to shed light on those who control the supply, the obscure cartel dealing in the shadows. They aren’t runners and kingpins. They are financiers and politicians who operate under a different code of ethics and evade the very laws they establish.

Deepwater Horizon—the drilling rig that exploded in the Gulf—was owned by Transocean, which also served as the drilling contractor, but the well and the crude itself are owned primarily by British Petroleum. Transocean operates out of Texas but is incorporated in Switzerland, with an office in the Caymans for good measure. Can’t be too transparent, you know. The rig was less than 10 years old. State of the art. One of the primary contractors was Halliburton.

Predictably, Wall Street has already weighed in and made its own prognostications about the impact of the spill. Just 10 days after the initial explosion that claimed the lives of 11 men, Morgan Stanley issued what the Oil and Gas Financial Journal calls a “comprehensive” report on the “financial implications” of the explosion. The bottom line is that insurance will cover most of the costs associated with the spill and that the inevitable regulation that will occur should financially benefit the industry. In fact, Morgan expects “established offshore drillers with the newest deepwater units to benefit as demand for their rigs is likely to increase” and that it will be “positive for the drilling industry.” They also conclude that “this would make the long-term supply outlook for tankers more favorable.”

What sickens me about this heartless yet rosy outlook for the oil industry is that the human and environmental toll is meaningless to financial analysts. What should sicken everyone is that Morgan Stanley is not only the most trusted analyst firm for the oil industry, it is itself one of the biggest oil companies in the world. Morgan has interests in crude oil production and storage, tankers and transportation. It is also one of the largest traders of oil on an unregulated commodity exchange that it founded. Morgan Stanley is a powerhouse oil company that should benefit handsomely from its own predictions which, even before the spill, included oil prices hitting $95 per barrel by December.

If 11 men hadn’t perished, the Gulf wasn’t flooded with oil, and our addiction wasn’t brought so painfully to light, perhaps I could close this column with some clever and pithy statement lamenting about the irony of it all. Something snarky about Halliburton and Wall Street, price fixing and collusion, the astounding conflicts of interest. But it’s too sad. It’s too much.

Written by jmorey

June 24, 2010 at 1:56 am

Shinnecock Casino At Nassau Coliseum

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Lighthouse Project Canal

View of the Lighthouse Project and Tall Ships Manned By Little People

The Shinnecock Nation is set to finally receive federal recognition. This status gives the tribe the ability to apply for a Class III gaming license, which would allow it to operate a full-fledged, high-stakes gaming facility. The biggest question is, where? Nassau County Executive Ed Mangano would like the ball to stop on his number on the roulette wheel and he has tens of millions of reasons for it.

As this column often serves as a bully pulpit for Indian rights, I will spare you all the reasons why “federal recognition” is such a sham and why the Shinnecock Nation should be able to build a 100-story casino in Southampton. Instead, allow me to explain why this is such a good idea for Long Island.

Indian casinos do not guarantee prosperity for the tribe in possession of the license or the community surrounding it. But an Indian casino based in the heart of one of the most populated regions in the nation does. A casino at the Nassau Coliseum site would be the single largest gambling facility in the nation. It is simple math. The Nassau “Hub” would finally be realized with an infusion of public and private money, fast-tracking infrastructure spending that would make Robert Moses blush.

This casino would serve as the nucleus for a burgeoning entertainment epicenter. All of the commercial, retail and residential “new suburbia” dreams would become reality as developers flock to construct a supporting economy within the glow of the Lighthouse Project. This presupposes that a deal could be reached with the Rechler/Wang power duo.

This project would have a negligible impact on traffic in the area to quiet the NIMBYists by funding a total overhaul of the public transportation network. A light rail system connecting the Casino to the Hempstead train station and Roosevelt Field? You got it. Widened roads with greater access to the Hub? Not a problem. Twenty-story complexes to house industry and residents surrounding the complex? Why not 30?

Of course, there are those who will fight tooth and nail against a casino on Long Island because of the filthy underbelly it represents. For many, casinos conjure up images of mafia hoods, prostitutes and bootlegging. Never mind that you can gamble in dozens of OTBs, buy lottery tickets on every corner, find a hooker making the rounds in industrial parks, or get a happy ending at any number of corner massage parlors. The moment a high-priced call girl takes up residence on a casino barstool looking for an out-of-town businessman with a leisure suit and a name badge, our puritan alarm sounds and the torches and pitchforks come out.

But let’s assume for a moment that Kate Murray of Hempstead, Ed Mangano of Nassau, Randy King of Shinnecock, and Charles Wang of everything else, are all in agreement that this plan should move past both the drawing board and the planning board. Then assume that the residents, community groups and environmentalists join hands and sing the praises of this proposal. Then assume the Islanders win the Stanley Cup. (OK, that was one step too far.) Even with all of these obstacles cleared, the single biggest one might surprise you: the gaming industry itself.

Technically, there is nothing that restricts sovereign Indian nations from building casinos on Indian land. Nothing, that is, but for the bigger sovereign known as the United States. Gambling operations existed on tribal land well before the U.S. government established the rules of engagement under Ronald Reagan with the Indian Gaming Regulatory Act in 1988. Even still there is theoretically nothing that would prevent a tribe from ignoring this Act (it’s a unilateral law, not a treaty) and opening a casino. It’s the gaming industry that operates within U.S. territory that provides the insurance policy against any casinos not blessed by the United States. The U.S. government would run any gaming manufacturer out of the country if it dared sell or license technology and support to a non-licensed operator that didn’t have U.S. approval. This is enough to dissuade any gaming company from doing business with tribes without an agreement in place with federal, state and local governments, which leads to the next issue…

Shinnecock will have many chefs in their kitchen (I’m resisting the “too many chiefs” reference) as they try to establish a casino in any state that begins with “New” and ends in “York.” Look no further than the New York Racing Association (NYRA) and the six Off Track Betting regions in New York State, none of which turn a profit. NYRA only recently emerged bankruptcy but is still bleeding cash, New York City OTB just went into bankruptcy, and horse racing in New York is in danger of extinction as a result. This is due more to the financial mandates of the state than it is to the decline in betting revenues. New York State is in such dire financial straits that it’s difficult to imagine a scenario in which Albany acquiesces to the desire of the Nassau Republicans to revitalize their hopes for the Hub. Add to the mix that Sheldon Silver, hands down the most powerful politician in the state, detests gambling and you have a recipe for failure.

But the most powerful foe in this process won’t be the most immediate one. The “powers that be” with interests in Las Vegas simply cannot afford to allow a casino so close to New York City. Atlantic City might as well disappear completely. One can point to the success of the casinos operated by the Oneida and Seneca Nations located in upstate New York, not to mention Connecticut’s Mohegan Sun and Foxwoods, to understand that the closer to New York City you place a casino, the more successful it is. Then track the number of flights from the tri-state area with Vegas as the final destination and consider how important this market really is. A large-scale, sophisticated Class III gaming facility 40 minutes from New York City by train and in the center of Long Island is death for all the others. The politicians in New York City will be damned if they lose one reverse-commuting thrill seeker, the politicians upstate can’t afford the potential revenue and job losses and New Jersey, well, to hell with Jersey. 

By going public with his discussions with Shinnecock, Nassau County Executive Edward Mangano is about to come face to face with the biggest challenge of his young administration. It’s no secret that the prior administration handed him a giant sack of financial meatballs and this could be the single most significant game-changing move. How he maneuvers through this process will either establish a new gilded age for Nassau County or set the stage for a calamitous one-term footnote in Long Island government history. Either way it will test the mettle of the dream team from Bethpage and set the tone for the next three and a half years in Nassau County.

Written by jmorey

May 2, 2010 at 2:51 pm