Saturday, September 20, 2008

Fact vs. Fiction vs. Fact: City statement on Yankees vs. Brodsky statement

The city responded vigorously Thursday to Assemblyman Richard Brodsky's report slamming Yankee Stadium financing plan, and Brodsky responded Friday in kind.

The city statement

Yankee Stadium: Fact vs. Fiction

At a time when economic development is sorely needed in New York, AM Richard Brodsky is criticizing a project that has led to one of the largest private investments in Bronx history, creating thousands of unionized jobs. AM Brodsky was right on the many occasions when he voted in favor of this project, and fortunately is too late to derail its success. His new efforts, though, may create hurdles for other economic development projects, including, for example, Atlantic Yards in Brooklyn - a $4 BN project expected to create thousands of unionized jobs and 2,000+ units of affordable housing.

Jobs

AM Brodsky: "Only 15 new permanent jobs would be created."

Facts

Yankees currently project 1,000 new, permanent jobs; 5,000+ unionized, construction jobs

In 2006 IDA application, Yankees reported the following relating to permanent jobs:
§ 2006: 104 Full Time (FT)/879 Part Time (PT) employees

§ Projected Post-Project: 140FT/950PT + 550-750PT concessionaire employees

City undertook the project for many reasons beyond just jobs ($1BN+ private investment; relieves City of maintenance that would have exceeded rent by $41MM over 40 yrs.; creates new parkland, infrastructure, and transportation improvements; 67% of construction contracts so far to NYC cos./29% to Bronx cos.)

Land Assessment

AM Brodsky: "The profound differences among the three appraisals were not an accident or omission."

Facts

DoF used standard procedures for assessment
IDA has appropriately had no involvement in assessment
Referenced valuations looked at land for different purposes and so had different assumptions (e.g., not all assumed completion of $1+ BN stadium; not all assumed $200+ MM of public infrastructure)

Luxury Box

AM Brodsky: "Luxury suite was secretly acquired by NYCIDA and the Mayor's Office with the proceeds from stadium bonds."

Facts

City only has an option to use suite
Suite being built with taxable, not tax-exempt, debt
Deal was disclosed as early as 2006 in official statement for project bonds
Deal is consistent with what City has had for years at Shea, Cyclones and Staten Island Yankees stadia
Available to reward employees and entertain dignitaries to market New York (as cities around U.S. do)

Process

AM Brodsky: "Failure to provide accurate and complete information to the public about authority activities and finances."

Facts

One of the most transparent projects in City history
Almost 20 public hearings (though Assembly held no hearings before its park alienation vote)
Approved by IDA Board, City Council, State Legislature, Gov., IRS
Hundreds of hours responding to Brodsky/Kucinich questions and testifying before Brodsky

Cost

AM Brodsky: "The total cost to taxpayers and savings to the Yankees is between $585 million and $826 million."

Facts

AM Brodsky says use of PILOTs to pay bonds is a cost to City, but before and after project, City will be collecting exactly the same amount in real estate taxes from the Yankees

AM Brodsky counts lost income tax on tax-exempt bonds as a cost of project, but:
§ Many bond purchasers may not be NYC/NYS residents and would not pay taxes even if bonds were taxable

§ Yankees have said that without tax-exemption, they would not have done project, so bonds for a new stadium would never have been issued on a taxable basis

AM Brodsky looks at project costs and ignores benefits (2006 IDA cost-benefit analysis est. $41MM net benefit)

City is contributing capital only to infrastructure ($174 MM for parks; $37 MM for general infrastructure;
$39 MM for Metro-North; $31 MM for soft costs)

APPENDIX

Noteworthy Votes by AM Brodsky (2005 to 2008)

AM Brodsky voted repeatedly in favor of new Yankee Stadium
Park Alienation (June 2005; S5818)
05-06 Budget Amendment, incl. ~$70MM for Garages (June 2005; S5928)
06-07 Budget, incl. ~$70MM for Garages (March 2006; S7166/A10486)
06-07 Budget Amendment, incl. ~$70MM for Garages (April 2006; S7265/A10653)
06-07 Tech. Budget Amendment, incl. ~$70MM for Garages (April 2006; A10652)
Education, Labor, Family Assistance and Econ Devel. Budget, incl. ~$70MM for Garages (S6807c)
Just this year, AM Brodsky voted in favor of bailing out two sports enterprises:
New York Racing Authority ~$140MM bailout (February 2008; A9998)
Monticello Raceway incentives (June 2008, S8700/A11744)

Selected, Recent Tax-Exempt Financings of Economic Development Projects (2002 to 2008)

2002: Chatham Ridge Redevelopment in Chicago, IL ($18 MM)
2002: Gallery Place Project in Washington, DC ($74 MM)
2002: Mandarin Oriental Project in Washington, DC ($46 MM)
2005: Downtown Mixed-Use Redevelopment in Kansas City, MO ($115 MM)
2006: Former Myrtle Beach Air Force Base Mixed-Use Redevelopment in Myrtle Beach, SC ($31 MM)

The Brodsky statement

Statement of Emma Furman, Deputy Chief of Staff to Assemblyman Richard Brodsky

NOW AND THEN: WHICH TIME DID THE CITY TELL THE TRUTH?

“FACT V. FICTION”, New York City’s non-denial denial response to the facts in Assemblyman Brodsky’s Yankee Stadium Report requires only a re-statement of the City’s own sworn statements to reveal the truth.

JOBS

Now: “Yankees currently project 1,000 new, permanent jobs.”

Then: Page 7 of the Yankees sworn March 2008 Core Application to the IDA.

Number of existing permanent jobs: 125

Number of jobs after completion of new Stadium: 140

Then we did the math……………………net increase: 15

Now they scramble to change what the documents reveal. Nice pivot. What did you expect them to say once the sworn data was made public?

LAND ASSESSMENT

Now: “Referenced valuations looked at land for different purposes”

Then: For the IRS the City valued the Stadium land at $204 million, $275 psf

For the National Park Service the City valued the same land at $21 million, $30 psf

For New York State the City valued the same land at $40 million, $50 psf

Well, the whole point of valuing the land separately is to not change the value because of the actual building on it. That is valued separately. Three different land appraisals, three different City financial needs, three different values, three different sworn submissions to the Feds. You couldn’t make this stuff up. And by the way, take a look at land values elswhere in the neighborhood, including another City deal, the Bronx Terminal Market, put together by Related. Land value there? $9 per square foot. Exactly how do they do these assessments?

LUXURY SUITE

Now: “Deal was disclosed as early as 2006 in official statement for project bonds.”

Then: There have been plenty of press conferences extolling non-existent jobs etc. Did anyone mention luxury suites publicly? Did anyone mention that ticket prices were going to skyrocket so that the same taxpayers paying for the Stadium couldn’t afford to go, but the political class gets to go free? Gimme a break.

PROCESS

Now: “One of the most transparent projects in City history.”

Then: Transparent? Was the “Deviation Letter” saying there was no required public economic benefit made public? Nope. Was the decision to issue a billion dollars in tax-free bonds made by elected officials? Nope. Exactly who is the IDA and how did they come to control City debt?

COST

Now: “City will be collecting exactly the same amount in real estate taxes from the Yankees.”

(And in and earlier press release) “Funding for the $800 million in construction costs is being provided fully by the Yankees.”

Then: In a sworn letter to the IRS the City says. “The City has determined to use its property taxes (in this case PILOTs) to finance the construction and operation…of the Stadium.”

Now which City statement do you want to believe, the press release or the sworn statement to the IRS? The Yankees are getting close to $1 billion in taxpayer money.

All we did was read the sworn statements in previously undisclosed documents, and compare it to the press releases then and now. These are the City’s own words, not anyone’s opinion. We’re not happy to uncover this mess. But at a time when we can’t fund the capital needs of the MTA, or schools, or hospitals, the City can pour billions into sports facilities. But the truth is the truth, and the City will have to live with it.

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