Dec
10

Yanks back at the city’s stadium trough

By

Ed. Note: Yes, the Yanks are about to sign CC Sabathia for seven years. You can read our coverage of the contract right here. Now on with your regularly scheduled programming.

At this point, is anyone really surprised that the Yankees have asked for and are receiving more tax-free bonds? Charles V. Bagli, take it away:

With opening day for the city’s two newest baseball stadiums only four months away, the price tag for taxpayers continues to rise. The Bloomberg administration has issued fresh estimates for utility work, lighting and the cost of replacing the parks and ball fields that once stood where the new stadium for the Yankees is being erected.

The city also plans to issue $341.2 million in additional tax-exempt bonds on behalf of the Yankees and Mets to complete the stadiums, whose combined cost is about $2.2 billion. The teams are responsible for paying off the bonds, but they pay tens of millions of dollars less in interest because payments to bondholders are exempt from city, state and federal taxes.

The city and the state are also investing more than $660 million in parks, garages and transportation improvements around the stadiums and are providing the teams with an estimated $500 million in tax breaks related to construction materials and other items. The city had planned to issue a public notice of the latest bond offering and a required public hearing on Monday but decided to wait at least a week until it completed a cost-benefit analysis. With public costs mounting, critics of the deals say the city will be hard pressed to demonstrate that the economic benefits of the stadium projects outweigh the cost to taxpayers.

Neil deMause questions the accuracy of the exact figures, but the fact remains the same. As services throughout the city — education, security and public transit — suffer, the taxpayers are yet again shouldering more of the burden of the stadium than we originally expected we would.

I realize by now the stadium is pretty much a moot point. The Yankees aren’t going to fork over money denied to the public, and the new structure will open in a little over three months as scheduled. But one of the roles a healthy media should play is that of public watchdog. New Yorkers had little chance to understand the public ramifications of the new stadium because the newspapers didn’t start reporting on these issues until it was far too late. The teams could have built new stadiums without these subsidies, and while there will be benefits the neighborhoods and communities enjoy from the stadiums, they won’t justify the costs.

Categories : Yankee Stadium

14 Comments»

  1. jsbrendog says:

    yawn. we all know theyre bastards and the system is broken and crooked

    • jsbrendog says:

      thsi was nto meant in any detriment to you guys for writing this, as usual well written and well played. just speaking to the content :-)

  2. Jon W. says:

    This is a shocker indeed. When it comes to politicans, believe exactly the opposite of what they tell you, and you’ll have the truth.

  3. mustang says:

    “Yankees have asked for and are receiving more tax-free bonds”

    And they just played a guy 7-160 million.

    Classic.

  4. Chris C. says:

    Ben, you are right on the money……..I’ve been saying this for a year now, but you still get these dopes who wear pinstriped goggles championing all the new jobs and revenue coming into the city. Complete bullshit. These people don’t read or have the mental capacity to understand what’s going on. That “revenue” all amounts to tax money the Yankees should owe anyway, but will be waived in leiu of them paying back the interest-controlled junk bonds……..which will never be fully paid back regardless.

    All this for a stadium the DIE HARD Yankee fans never wanted anyway, and the people who don’t care about the team are forced to foot the bill for.

    There was a time when this would be a criminal offense.
    But unfortunately, the criminals are running things now.

    • dexcente says:

      “That ‘revenue’ all amounts to tax money the Yankees should owe anyway”
      “interest-controlled junk bonds…….which will never be fully paid back regardless.”

      You have absolutely no idea what you’re talking about.

  5. Jim M. says:

    It is not as simple as a choice between funding schools and police and issuing tax-free debt for the New York Yankees. The Yankees could issue a billion dollars more or less of tax-free debt and it would not add or take away a penny for schools or police. The city is forgoing tax revenue by allowing the Yankees to issue more debt, but it does not actually cost the city any additional money that would otherwise be used elsewhere. Of course, this all assumes that the Yankees would not issue the debt unless it were tax-free. If they would issue it either way -then forget the above.

    • Clayton says:

      I have to agree here.

      The line that the “taxpayers are yet again shouldering more of the burden” is not a true statement. The city has decided not to recieve tax revenue, but the Yankees will still have to pay back the bond. And the bond does not affect the funding for any of the city services; the city is acting like a bank giving out a loan.

      I have dealt with this on a much smaller scale in my town and giving out tax-free bonds is common practice because of the incentive for the corporation to build or invest in the community. You forgo the bond tax for future property and income tax on land that hopefully has increased in value. And after the city handed out the first bonds for building the stadium, it is nothing to keep issuing bonds as long as the Yankees are making payments.

      Now giving out the bonds in the first place is the real question. If you don’t think the Yankees were really going to leave the Bronx, then it makes no sense because the city’s incentive is gone. But were people willing to take that risk?

      • Chris C. says:

        “The city has decided not to recieve tax revenue, but the Yankees will still have to pay back the bond.”

        Right……INSTEAD of paying taxes. So the YAnkees will be paying NO TAXES on a stadium that was paid for with a good portion of other people’s tax money.

        Does that sound right to you?

        “Now giving out the bonds in the first place is the real question. If you don’t think the Yankees were really going to leave the Bronx, then it makes no sense because the city’s incentive is gone. But were people willing to take that risk?”

        Which “people” are you talking about? Rudy Guiliani, and a few other roguies? Because I’m not sure the people who matter had a choice, did they?
        No baseball team has left this state in 50 years, and the Yankees were threatening to move to the swamps in JERSEY?????
        THAT’s a risk????

  6. Neil deMause says:

    Tax-free bonds absolutely do cost the government something: Bondholders are able to invest their money without paying taxes on the proceeds, so the city, state, and federal governments are forgoing that revenue. Unless you assume that there’s an infinite number of tax-free investments that people could be making if the Yankees bonds didn’t exist, but by that logic you might as well never try to tax anything.

    The cost to taxpayers isn’t the full amount of the bonds, obviously. If you follow the link below, I try to use the IBO’s methodology to do some estimates: about $500,000 cost to the city, $1.5 million to the state, and a whopping $70 million and change to the feds. This is why Congress tried to outlaw the use of tax-free bonds for stadiums back in the ’80s: It enables cities to stick federal taxpayers with a huge chunk of the bill. And while it’s admittedly fun to think about Red Sox fans helping pay for the Yankees’ new stadium, that doesn’t make it good public policy.

    http://blogs.villagevoice.com/.....s_dema.php

    • Clayton says:

      I understand that the city is losing revenue by not collecting the taxes on the bond. However I disagree with statements that “taxpayers are yet again shouldering more of the burden” or that the “about 500,000 cost to the city, $1.5 million to the state, and a whopping $70 million and change to the feds.”

      It is not costing the taxpayers any money because if these bonds were never issued then there would be no income received and budgets are not made on the possibilty of receiving money from bond taxes. Also, I doubt that the city of New York would have difficulty issuing more bonds but I could be wrong on that issue.

      However, I completely agree that it makes no sense to give these tax breaks to a billion dollar corporation because they said one time that they might move to jersey. I don’t call it a cost, I call it lost revenue.

    • dexcente says:

      Please don’t make me have to go through this whole thing again on yet another website.

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