Wednesday, December 10, 2008

Brodsky announces expanded inquiry into aid for stadium projects

Given news reports of additional ($342.1 million, according to the New York Times) tax-exempt bonds for the Yankees and Mets stadiums, Assemblyman Richard Brodsky, chair of the Corporations committee, issued a statement saying he'll continue his inquiries.

The Times yesterday reported an increase in infrastructure costs and an ominous prediction:
George Sweeting, deputy director of the Independent Budget Office, said, “The additional costs that have emerged make it quite likely that that the city’s net benefit number is now negative.”

Brodsky's inquiry

Brodsky's press release:
Assemblymember Richard Brodsky (D-Westchester) today announced an expanded inquiry into the move toward additional taxpayer assistance of $450 million for the construction of the new Yankee and Met stadia. This assistance is in addition to the over $2 billion already given. The Chairman had begun the inquiry by chairing a public hearing on the taxpayer subsidies on July 2 of this year. His work revealed that contrary to public claims, there was little if any economic benefit to taxpayers in return for their money, that taxpayers, not the professional sports teams were paying for construction of the facilities, that the City did nothing to limit the ticket prices paid by those wishing to attend games, that the assessment of land beneath Yankee Stadium had been artificially and illegally inflated, that city officials strenuously and successfully sought a free luxury suite for themselves, that these issues and decisions were done secretively, and that elected officials, other than the Mayor, had little effective control of the process.

Subsequently, a Congressional Sub-Committee had two public hearings, the City withheld and then partially released requested documents, and still is withholding the bulk of those documents.


Did the public give $2 billion?

Note that it is very much a matter of debate as to whether the payments-in-lieu-of taxes, or PILOTs, represent a subsidy.

At a Congressional hearing October 24, Brodsky said, "Congressman, the private payments are the taxes they owe. It’s as though you built an extension on the house and you said to the taxing authority: send my payments to the bank to pay off the mortgage. The notion that this is being paid for by the Yankees is delusional.”

The Yankees' Randy Levine responded, “Mr. Brodsky, he really knows better. We don’t pay taxes now. We’re a tenant. We don’t pay taxes at the old Yankee Stadium. As I said before, there would not have been a new stadium, unless this mechanism was put into place.”)

"What public interest is served?"

The press release continued:
"We don't have the money to fund trains, schools or hospitals, yet two of the richest, most profitable companies in the world are turning to taxpayers for support," said Assemblyman Brodsky. "What public interest is served by these subsidies, especially when average citizens cannot afford the enormous increase in ticket prices? Who is protecting the public interest? How can we afford these subsidies when we can't find the money to fund mass transit or schools without enormous tax increases? We're going to get answers to these questions."

He continued, "We have watched as across New York IDAs have become vehicles for special deals that don't benefit the economy. It's not just that we can't afford these kinds of giveaways, it's that we have important economic development work that doesn't have the resources wasted on giveaways. The Assembly has been pushing to reform the system, and we're going to get at the truth of the stadium deals."

The Chairman said he would make announcements about the next steps in the inquiry shortly.


Note that Brodsky has not indicated that the inquiry would extend to the planned Atlantic Yards arena. Though construction has not yet begun, presumably some of the same discussions between the team owner and city/state officials are occurring.

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