Wednesday, January 07, 2009

Documents emerge about stadium subsidies; mayoral candidates shy away from criticism

The big news in today's papers is that, as the New York Times reports, in an article headlined City Gives Up Its Stadium Suite in Exchange for Cash: After intense criticism, the Bloomberg administration has given up a perk it worked fervently to secure: a free luxury suite at the new Yankee Stadium.

But lower down in the article there's a hint at the larger story:
“Does the Bloomberg administration really think that giving up a suite at Yankee Stadium is going to soften the blow that this project has had on city taxpayers?” said Bettina Damiani, director of Good Jobs New York...

Indeed, though Rep. Anthony Weiner, a stated mayoral candidate, criticizes the suite deal in the Times, Tom Robbins in the Village Voice points out that both Weiner and Comptroller William Thompson, a fellow candidate, are unwilling to criticize the larger question of taxpayer funds supporting the stadium via tax-exempt bonds.

If they're unwilling to raise that issue, it's unlikely they'd look closely at a similar funding scheme for the planned Atlantic Yards arena. The main critic of the stadium deals is Assemblyman Richard Brodsky.

(There are two levels of subsidy. First is the difference between taxable and tax-exempt bonds. Much larger, and more debatably, is whether tax-exempt bonds repaid by payments in lieu of taxes, or PILOTs, represent a full subsidy.)

Data emerges

Also in the Voice, Neil deMause reports that the New York City Industrial Development Agency just released its cost-benefit documents for the $342 million in new tax-exempt bonds the Yankees and the Mets are requesting from the city, a week ahead of a January 15 public hearing. (This is actually more transparent than usual, though deMause notes that a late-afternoon release of documents ensures they get little scrutiny in the next day's press.)

Notably, the city's cost-benefit analysis reflects only on the impact on the city, not that on the state or federal governments, which presumably are taking a bigger hit. Rep. Dennis Kucinich has been investigating whether the federal government should supply such subsidies.

deMause writes:
Covering 116 pages, the paperwork... goes into mind-numbing detail on just what gewgaws the teams would be using the money for: For the Yanks, such items as $38,608,134 for "Counter Terrorism Structure Hardening" and $4,750.000 for "Perforated Metal Mesh Panels Upgrades"; for the Mets, "Structural hardening and upgrade perimeter security" and "Modification of office and rotunda flooring material" (no price breakdowns provided).

All of which is well and good, but what of the question that this hearing is meant to address: Why should the city be giving the teams tax-subsidized financing to buy all this stuff?.... On this matter, the 116 pages are silent: Beyond recalculating the city's original dodgy figures for how much tax revenue it expects from the overall stadium projects (the new projections went up -- duh), there's no detail at all of the costs and benefits of the new bonds themselves. The city Independent Budget Office has estimated the public cost of the new round of bonds at about $96 million, most of which will come out of federal coffers (since bondholders will mostly be ducking federal taxes), but you'd never know it from the city's official paperwork.


Among the costs are $40 million in construction delay from litigation, $10.5 million for suite-level upgrades, and $34.6 million for contingencies. Go to page 56 of the Yankees document (PDF) to see the role of ubiquitous environmental consultant AKRF.

The threat to leave

Part of the application dutifully requires the Yankees to certify whether "the Applicant, but for the contemplated financial assistance," would "locate the related jobs outside the State of New York."

Remember, when asked about the threat to leave by Brodsky at a hearing last July, city official Seth Pinsky was vague. When asked by Rep. Dennis Kucinich in October, the Yankees' Randy Levine was similarly vague, though he claimed to reporters that New Jersey has wooed the Bronx Bombers--a claim for which there's no specific evidence.

The document released yesterday states:
A senior officer of the Yankees has publicly stated that absent financial assistance from the New York City Industrial Development Agency to develop and construct the Project, the Yankees would have been forced to leave the Bronx, New York. Although no alternative location for the Yankees was identified, the possibility of jobs being relocated outside of the State of New York was never ruled out.

There's a bit of a difference between "forced to leave" and "never ruled out."

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