Stadium bond deal facing Congressional scrutiny

Hughes' return delayed
Game 105: Just a speed bump

The New Stadium Looms

Juan Gonzalez of the Daily News (and one of the newest additions to the National Association of Hispanic Journalists Hall of Fame on Friday) has the latest on the Yankee Stadium funding scheme. Congress, he reports, is looking at the valuation the city and team put on the land for the new Stadium. A few representatives charge that the Yanks and New York may have overvalued the land to float more bonds than they should have.
Gonzalez reports:

A Congressional committee has launched a probe into whether the city and Yankees wildly inflated the value of the site for the team’s new stadium to float nearly $1 billion in tax-free bonds. Rep. Dennis Kucinich (D-Ohio) last week demanded “specific documents and reports” that could show the city claimed the land beneath the new Yankee stadium was worth nearly seven times its true value.

The massive switcheroo allowed the city to sell $941 million in bonds for the stadium, which must by law be linked to a site’s actual value. That means taxpayers are getting rooked because bondholders avoid paying tax on the interest they earn – and it could jeopardize the financing of the whole project.

Kucinich, who heads the House Committee on Oversight and Government Reform, is zeroing in on dramatically different estimates the city offered for the stadium land – one of $275 per square foot and another of just $45. A hearing is set for September. “There’s no way vacant land in the Bronx is worth $275 a square foot,” said a veteran city assessor, who asked not to be identified.

According to one survey — that conducted by the city — the parkland in the Bronx was worth $204 million or $275 per square foot. But in other documents, the Parks Document said the land was worth $45 per square foot. With unnamed Finance Department officials alleging something akin to fraud, this story could get interesting.

In the end, odds are that nothing will come of this. The new stadium is nearly finished; the old one is destined for the wrecking ball in a few months; and nothing short of an act of God is really going to stop that now. However, as more and more information has come to light, it seems clear that taxpaying New Yorkers got a raw deal on the Stadium. I’ll be curious to read the book on the history of this project that someone will write in a few years. I can’t imagine the Yanks will come out in a positive light.

Hughes' return delayed
Game 105: Just a speed bump
  • Simon B.

    I can’t vouch for it to be true in this instance, but keep in mind Kucinich is famous for these types of stunts. He likes to get his name in the paper as if he’s initiating some massive investigation from Congress, and really nobody cares usually. Just a couple days ago, I saw a Digg news article at the top of the site headlined something like “IMPEACHMENT TALKS UNDERWAY”, and of course all I saw was Kucinich’s name in the article, I knew it was BS. He does this nonsense all the time.

  • andrew33

    i hope simon b is correct because i’ve already read articles that the yankees were supposed to have released money to diffierent community groups in the bronx for parks and recreation areas – and have yet to do so. bad press like this isnt really needed when you are already considered greedy in every corner of the baseball world – which i dont agree with.

    hopefully its nothing

  • Chris

    I find it very hard to get worked up over this. This isn’t the same as the city paying for the stadium.

    If I’m doing the math correctly, it works out to very little money that the city is giving up compared to if these were taxable bonds. Consider $1B in bonds, with annual interest in the $50M range per year (5%)… total taxes on that would only be ~$20M, with most of that going to the federal government and the state.

    This deal seems comparable to deals that the city, state or federal government give to other industries. If you want to criticize every deal for every industry, that’s fine, but to single this out because it’s a sports stadium is not accurate.

    • Ed

      It makes very little tax difference for the city, an a little more for the state. It’s a bigger issue for the Federal government.

      Also, these financing deals often have stipulations that the construction be performed by a local company. If the Yankees use an NYC based construction company instead of one located outside of the city, then the payroll & income taxes paid by the construction company would be more than the city would get out of taxing the bonds.

  • http://www.spartacus.schoolnet.co.uk/CRsmithT1.jpg tommiesmithjohncarlos

    The David Ortiz tee-shirt strikes again!

    • pat

      its nice to see juan gone has something to fill his time since retiring from baseball

      • TheLastClown

        Can’t be the same one….can it?

        I didn’t think he was overly literate

        • http://www.riveraveblues.com Ben K.

          It’s not the same one.

          • Hank Winkler

            I call bullshit.

  • Geno

    It’s too bad that in today’s economic environment that big business can still openly defraud the public. That’s all this is, and it’s a shell game as old as money itself.

    Maybe we accept it because it’s baseball. If I absolutely had to choose between having an Enron-type steal from me or the NY Yankees, I suppose I’d choose the Yankees.

  • David Brown

    I would like to know why the Yankees are always bashed over the stadium issue, and RARELY IF EVER ARE THE METS. I do not see the Yankees charging THOUSANDS OF $$$$$$$$$$$$ in Personal Seat LICENCES like the GIANTS are, and Congress does not get involved with the Giants? Politicians like Rep. Dennis Kucinich sicken me. This guy BANKRUPTED Cleveland while he was mayor, yet he goes after others, over the economy. Escuse me what planet is he on? Why does he not complain about the Lower Manhattan Ground Zero mess, or hold hearings into how poverty striken CLEVELAND is? Lets try $635 MILLION for the WILLIS AVE BRIDGE to see REAL NEW YORK CITY WASTE.
    Remember thus Mr, Kucinich, your city has been LOSERS since Jim Brown left town, and thank GOD for our new stadium. PS: I hope you take in a game at Jacobs Field next year, when CC Sabathia is pitching for the YANKS against the TRIBE, and after we win don’t like the door hit you on the way out.

  • hornblower

    The fact that the Yanks will charge bloated prices for seats at the new stadium is reason enough for the public to get upset over these bogus land deals. People who have no interest in baseball end up paying anyway. Any tax break for a private business should require disclosure.
    Psls are also being extorted because the people of NJ are giving tax breaks to the Jets and Giants.
    When the pundits defend the practice by saying that you don’t have to go, they should be informed that you pay even if you stay home.

  • Pingback: River Ave. Blues | Perks of the new Stadium: free seats for city officials