As groups lobby against tax-exempt bonds for sports facilities, is WFP hamstrung by ACORN's AY deal?
That's why two letters issued yesterday said very much the same thing--but with a curious discrepancy that suggests that the housing group ACORN's role in the Atlantic Yards project may have hamstrung the Working Families Party from explicitly criticizing tax-exempt bonds for the AY arena.
Yesterday, a coalition of groups, notably Good Jobs New York, the New York Public Research Interest Group, the anti-AY group Develop Don't Destroy Brooklyn and the Yankees resisters at Save Our Parks, sent a letter to New York State's Congressional delegation, asking them to "clearly communicate to the Treasury Department and the IRS that its regulations should be clarified to ensure that in the future no sports facilities will be eligible to receive federal tax exempt financing." (Click on graphics to enlarge.)
In other words, even though the Yankees and Mets were able to use a "loophole," in the words of the chief counsel of the IRS, to use PILOTs to pay off stadium construction, they shouldn't be allowed to gain any more tax-exempt bonds. Nor should Atlantic Yards developer Forest City Ratner, even though city and state officials are lobbying Washington to make sure that these projects escape a proposed new regulation tightening the availability of such bonds.
The WFP effort
Yesterday the New York Working Families Party asked supporters to send a message urging Mayor Mike Bloomberg to stop lobbying to help the Yankees get more tax-free bonds. The message, which mentioned neither the Mets stadium nor the Nets arena, pointed out, as did testimony by Good Jobs New York and others at a Congressional hearing last October, that subsidies for sports facilities can divert funds from critical infrastructure.
Yesterday, Develop Don't Destroy Brooklyn posted an email sent out by the WFP, signed by several officials, including WFP Co-Chair Bertha Lewis, executive director NY ACORN, and a signatory of the Atlantic Yards Housing Memorandum of Understanding (MOU) and a staunch supporter of the project.
The letter also cited only the Yankees Stadium but laid out the broad policy argument, calling it "very sensible" for "private sports teams [to] not have access to tax-free bond money meant for public development projects."
The letter added, "If they succeed, other sports teams in NYC, and around the country, could see billions more in public money heading their way."
The policy argument applies, obviously, to the Atlantic Yards arena. Indeed, as DDDB points out, Forest City Ratner could proceed with taxable bonds. But that could cost an estimated $165 million in revenue, reason enough to doubt Bruce Ratner's nonchalance in claiming the project would be funded no matter what.
As a Working Families Party representative commented on this blog in September 2006, the WFP is neutral on Atlantic Yards. Indeed, City Council Member Letitia James, the most prominent political opponent of AY, is an WFP member.
Then again, given that ACORN is a founder of the WFP, the party can't ignore ACORN's position. So, even though the WFP could legitimately mention all three sports facility projects, it chose to mention only the Yankees deal.
ACORN hamstrung WFP on this issue?
Why? I'll speculate that the WFP faced some internal pressure from ACORN, which is required, according to the Housing MOU (above) to "take reasonable steps to publicly support the Project by, among other things, appearing with the Developer before the Public Parties, community organizations and the media as part of a coordinated effort to realize and advance the Project and the contemplated creation of affordable housing."
Though that clause strikes me as difficult to enforce, I can't imagine that Forest City Ratner is happy with anyone lobbying public officials to tighten regulations on tax-exempt bonds. So if Lewis and ACORN were going to criticize "corporate welfare," the least they could do was not mention by name one of the chief recipients of such tax breaks.