Wednesday, January 14, 2009

As hearing on Yankees' bond request approaches, Brennan questions tax-exemption for stadium

The hearing this morning that Assemblymembers Richard Brodsky and Jim Brennan will hold on the New York Yankees' request for some $430 million in additional tax-exempt bonds will inevitably get contentious, as Brodsky assured the the attendance of New York City Industrial Development Authority chair Seth Pinsky and Yankees president Randy Levine only via subpoena.

With them will be city Comptroller William Thompson, a mayoral candidate, who issued his own scathing criticism of the Yankees's plan yesterday, and asked that the IDA's planned hearing Thursday on bonds for the Yankees and the New York Mets be postponed. The fourth person testifying will be George Sweeting of the Independent Budget Office.

Tax-exempt sports facilities?

In the Village Voice, Tom Robbins reports on the run-up:
Brennan, who chairs the Assembly Committee on Cities, says he wants to understand why a financially thriving private enterprise is being excused from paying real estate taxes.

"It seems ludicrous to be exempting the new stadium from property taxes," says Brennan. "The company is wealthy, and it is not relocating outside the city. They can surely finance extra amenities like a giant TV screen from their own internal funds without a subsidy of any kind."

In other words, Brennan's interested in a question at the heart of the city's funding schemes for sports facilities: build them on tax-exempt land and let PILOTs (payments in lieu of taxes) pay off construction bonds.

What about AY arena?

The same question applies to the Atlantic Yards arena. Right now, Forest City Ratner and parent Forest City Enterprises (FCE) seems to be struggling, and the New Jersey Nets are losing money. But the arena plan was conceived when the companies were doing well.

One major contributor to FCE's losses is the hit the company absorbs from the Nets. Should the relative success of a company running a sports team and hoping for a new sports facility be what determines whether the public should subsidize the facility?

If not, then Brennan (and Brodsky) might take a closer look at the Atlantic Yards arena, a project they wouldn't be scrutinizing after construction.

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