Yankee Stadium Bonds Request Defended as Good for the Bronx
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The Bloomberg administration is defending its decision to seek additional tax-exempt bonds for the new Yankee Stadium, pointing to the new jobs, increased revenue, and parkland the project will bring to the Bronx.
The new Yankee Stadium, scheduled to be ready for Opening Day 2009, has already received $942 million in tax-exempt financing, but the Yankees are seeking additional tax-exempt bonds that would primarily fund “scope improvements” such as a scoreboard, concession stands, and other stadium amenities.
Since the Tax Reform Act was enacted in 1986, private developers have faced more restrictions when trying to get tax-exempt bonds for stadiums. In 2006, the Yankees, with the support of the Bloomberg administration, avoided such restrictions by having the city and state pay off the bond debt with money received from the Yankees, also known as payment in lieu of taxes.
The IRS is in the process of closing this loophole, but city officials are requesting that they not.
At a hearing before the Assembly’s Committee on Corporations, Authorities, and Commissions in Lower Manhattan yesterday, the committee’s chairman, Assemblyman Richard Brodsky of Westchester, said the city’s Industrial Development Agency committed a “fundamental public policy breakdown” by ignoring the baseball team’s potential revenue streams and ticket prices when determining if public funding was necessary for the new stadium. In the process, Mr. Brodsky said, the city bypassed more worthy projects.
The president of the city’s Economic Development Corp., Seth Pinsky, said the IDA had a transparent process when determining whether the new Yankee Stadium was a viable option for tax-exempt public funding. He said legislators are singling out this particular project because the Yankees, who have baseball’s highest payroll, are involved.
Mr. Pinsky also disclosed that the Mets are in the preliminary stages of requesting additional tax-exempt bonds for Citi Field, but the bonds were previously approved by the IDA and left unused as a contingency plan.
