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Behind the Izod Closure: More Questions Than Answers in the Meadowlands

The fate and future of Izod Center remains uncertain, a mystery only deepened by officials passing the buck and refusing to comment

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With its glory days long gone and its future up for grabs, the fate of the Izod Center has become an open question. After years of study and debate, officials suddenly took action in January -- shuttering the 34-year old state-owned arena with barely two weeks warning and shifting much of its business to the privately owned Prudential Center, in Newark.

This arrangement could last two years. Or five. Or seven. And Izod could eventually reopen for business as usual. Or it could become a longtime home to a Cirque du Soleil production.

State officials decline to discuss the deal with Prudential or the arena’s future, but insist that the move saves millions in taxpayer dollars now. Their stance has drawn fire from local and state-level elected officials, regional civic leaders, and Izod employees, however. And months later questions continue to pile up about the rush to close the facility, the nature of the negotiations, and the long-term restrictions on its use.

“I’m always concerned when things are not done in a straightforward manner -- when a public agency finds a way to do things secretly or under the radar screen. And this certainly fits the bill,” said Senator Loretta Weinberg (D-Bergen), who has pushed since January to learn more about the state’s decision. “The environment in which this was done is very suspicious. And when (state officials) do things like this, it’s time to take a look.”

In additions to questioning the state’s financial findings and secrecy, Weinberg and others raise concerns about the involvement of Jon Hanson, a powerful real estate executive and former chairman of the New Jersey Sports and Exposition Authority, who is a close friend and trusted advisor to Gov. Chris Christie. For now, these questions will continue to accrue: A spokesman for the governors office referred questions to Treasury; Treasury referred questions to NJSEA; NJSEA declined several requests for comment, noting the agency is focused on its ongoing merger with the Meadowlands Commission. Hanson did not return a call for comment.

The beginning of the end

When he was first elected, Christie tapped Hanson, the chairman and founder of the Morristown-based Hampshire Real Estate Companies and longtime Prudential Financial board member, to lead a newly created Governor’s Advisory Commission on New Jersey Gaming, Sports and Entertainment. In its July 2010 report, the commission highlighted NJSEA’s continuing losses and called for selling or leasing Izod, or, perhaps keeping it open with limited productions that are coordinated with other Garden State venues, like nearby Prudential Center.

But Hanson didn’t just create the blueprint for Izod’s closure; according to published reports, he brokered the January deal that led NJSEA to shut the doors in exchange for $2 million, over four years, from Prudential. According to meeting minutes from October, NJSEA President Wayne Hasebalg said the agency was “waiting for direction” on Izod’s future, based on the outcome of negotiations Hanson was leading between Izod and Triple 5, the developer of the long-delayed American Dream project. State officials would not address Triple 5’s role in the closure and a Triple 5 representative also declined to comment.

“So we have somebody who is not elected, not officially appointed in some way that the legislature has advised and consented, who is out there doing business on behalf of the public?” Weinberg asked. “It seems very cloak and dagger.”

The bottom line

When the NJSEA approved Izod’s closure, it was framed as an urgent need that would help stanch the agency’s financial bleeding. Hanson raised concern about the complex’s growing losses in his 2010 report; this year alone, some $34 million in public funding will go to NJSEA operations. State officials said Izod’s losses would top $8.5 million and, with expenses of up to $750,000 a month, it made sense to suspend operations.

But Weinberg and others challenged this math, pointing to a Legislative analysis that shows Izod was earning up to $3 million annually in recent years and had bookings through August this year. When the closure was announced, local colleges scrambled to find other locations and big productions, like WWE Summer Slam, were forced to go elsewhere; hundreds of workers lost about a third of their annual income. Oddly, meeting minutes from last fall also quote NJSEA officials as saying Izod was having a successful year.

“Not only are the employees affected by this decision but the Bergen County economy will be as well,” Jim Kirkos, president of the Meadowlands Regional Chamber of Commerce, told the NJSEA at its January meeting. “There needs to be a plan or a vision to keep this complex running.”

Hazy future

Of all the questions, observers are most perplexed by what seems to be the state’s conflicting messages about its long-term plans for the site. The Sports Complex is certainly in flux; Met-Life Stadium is owned and operated by the NFL teams involved; the horse racing facilities have been ceded to private interests and are now focused on building an adjacent casino; and the American Dream project is still a work in progress. The Izod Center was the NJSEA’s only remaining public facility on campus.

The details of the agreement signed by Wayne Hasenbalg, president and CEO of the NJSEA, and Hugh Weber, president of Devils Arena Entertainment, which operates the Prudential Center, further confuse the matter. While billed in public as a two-year closure, the deal actually enables the state to keep Izod closed for as many as seven years, through 2021. It also gives Prudential operators a say in the type of shows Izod will host in the future and limits Izod’s crowd to half its normal capacity in later years. One restriction calls for a ban on “revenue generating” events; another limits Izod productions to “a single theatrical residency production, for example Cirque du Soleil.”

In return for this control and access to Izod’s customer database -- a trove of more than 600,000 names and email addresses -- Prudential will pay the NJSEA up to $2 million over four years, in annual payments of $500,000. State officials were mum on this agreement and a spokesman for Devils Arena Entertainment also declined to discuss the deal.

“Closing it and to let it sit here for two years is not a wise decision,” East Rutherford Mayor James Cassella told NJSEA officials at the January meeting. “I am fully with those who think this decision needs to be slowed down. I am asking that this be looked at more realistically.”

Lilo H. Stainton is an award-winning reporter who covered politics and public policy in New Jersey for more than a decade and later served as press secretary to Gov. Jon S. Corzine. She has also worked as a communications strategist, campaign director, and advocate for coastal protection in the wake of Hurricane Sandy.

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