Jan
07

City gives up luxury suites

By

Score one for the little guy. After facing intense scrutiny over aggressive e-mails and shady land dealings, the City of New York will be giving up its luxury suite at the new Yankee Stadium for a cash payment. While this doesn’t really solve the rampant problem of the tax-exempt bonds, it’s a victory, albeit a small one, for good government groups.

Fernanda Santos has the story in The Times today:

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.

The city will relinquish use of the 12-seat box in exchange for whatever revenue the Yankees generate by selling the seats, minus the cost of marketing them. Although neither the city nor the Yankees have publicly disclosed the market value of the suite, similar suites at the new stadium are being sold for as much as $600,000 a year…

Under the new arrangement with the city, the Yankees will be allowed to keep the parking spaces and use of the billboards, and the city will be guaranteed at least $100,000 for each baseball season, even if no one buys the suite. The deal was formalized last month in a letter from Mr. Pinsky to the Yankees president, Randy Levine, that was made public on Tuesday. A similar arrangement is being negotiated with the Mets, which also gave the city free use of a suite in its new ballpark, Citi Field.

While I think this is a fair deal, Assemblyman Richard Brodsky is a bit skeptical. “The taxpayers who are paying for the construction of Yankee Stadium cannot afford to buy tickets for the games, but the mayor was getting a luxury box, so he had to back off,” he said to The Times. “But the reason he backed off is because next week, the city is going to give the Yankees more taxpayer money.”

Next week, the city should just make the Yankees take taxed bonds. This whole thing would be over. Either way, King Mayor Bloomberg has discovered that if he doesn’t play nice, he doesn’t get his perks, and the city will give up a luxury box it probably could have gotten through more legitimate means. Such are the way of things.

Categories : Yankee Stadium

54 Comments»

  1. UWS says:

    Not closing italics tag? Fail.

  2. leftylarry says:

    Yea, let’s make life miserable for the Steinbrenners and every other remaining business that is good for NY.
    NY is aobut to take a massive, massive hit revenue-wise, Real Estate-wise and jobs-wise.
    Let’s let these A-holes damage the Yankees and Mets too.Giants, Jets and that revenue is already gone.

  3. Chris says:

    If you hate Bloomberg that much, then what were your thoughts of Giuliani, who agreed to stadium deals with the Mets and Yankees that were much more team friendly?

  4. Steve S says:

    Its good to be the King

  5. CountryClub says:

    Wow, killing Rudy? Do you remember what NYC was like before he got there? Not saying all of his methods were the best….but his results were welcomed by all.

  6. ceciguante says:

    i don’t understand all the opposition to tax free bonds. the yankees bring a TON of money into new york city, much more than they save on these bonds. that has tremendous value to the bronx, the city, the state, and to all new york taxpayers. to slam tax free bonds as the tabloids always do (when i doubt their writers know much about them) is just a knee jerk liberal reaction. the media has vilified PILOT financing (payments in lieu of taxes), but i’ve never once seen an intelligent writeup in any NY tabloid on what they are and how they work. and i have worked on deals involving PILOT financing for schools. nobody raised hell about that, it was considered efficient and a win-win scenario, even in the media. but not when it’s the yanks. then it’s written up negatively.

    the fact is, the yankees get portrayed as “evil” because it’s a narrative that sells as a stark contrast to egalitarian notions of “baseball is american as apple pie.” in any other industry, the yanks would be considered heroes, without the squash-the-little-people overlay. but passions abound when it comes to the national pasttime, people feel entitled to have their product cheap. there is an argument there, but it gets taken too far when people start trashing tax-free bonds they don’t even understand.

    ben writes about the city’s “aggressive emails” (hyperlinked), but when you click through to his prior post on 11/30, even he admits these emails are “fairly benign.” what really happened is, somebody leaked 5 pretty normal emails to the daily news, and they wrote a typically inflammatory story about them. but the most telling fact i read in those emails (linked as .pdfs from the news’ story) is that most other cities get seats/perks when a new stadium is built. if that’s true, why is NYC portrayed with the yanks as some corrupt, evil duo, disregarding the sanctimonious residents of the bronx? if it weren’t for the yanks, most of us would never have even been to the bronx, let alone spent any money there (which benefits — guess who? — bronx residents). so i’m pretty tired of this naive liberal bias against tax-free financing.

    • Old Ranger says:

      Damn, you are the man, about time someone showed some sense…and knowledgeable insight.
      I am not a economist, but it is almost like the people are bitching about lower taxes…Yankees will be a very good tax base for the Bronx. Erregaurdless of what the Liberal Newspapers print, it was a good deal for both parties involved.

      • Although Brodsky has a point… why MORE tax free bonds now?

        The Stadium is built; they’re not going to abandon the project and walk away now. The Yankees signed a non-relocation agreement when the first deal went through; it’s not like Hal and Hank can threaten to move to New Jersey if the city doesn’t pony up more tax-free bonds to cover their cost overruns.

        With the economy in the can now, the city can damn sure use the tax revenue generated by the additional 450M in public financing the team is asking for…

        • Old Ranger says:

          True but, the city could also do like the rest of us do…cut some of the spending $$$$ that is in the budget. Cost of living isn’t 13%, why increase the budget by 13% every year?
          Damn, we got caught up in the politics trap again! We are of different parties, which means we will never agree…may I suggest we stop now?

  7. Januz says:

    I agree with you 100% about liberal bias against anyone conservative and about the new Stadium (Why else did they believe Ronald Reagan and George Bush Jr were inferior and stupid?) Disagreeing with ones policies and politics is fair game and necessary in a democracy. But not thinking someone is inferior because you disagree with them. That is arrogance. The same thing applies to funding sports. Since most people who like them are NOT highbrow and culturally refined, it should be opposed . However, funding ballet, classical music, jazz, and other forms of art is a necessary expenditure of taxpayer dollars. Look at how much money is being used to fund Lincoln Center’s rebuild? I would be willing to bet any amount of money that if I did a poll in Harlem and asked what is Alvin Ailey” at most 10% might know it. If I asked who the Yankees are, I bet 90% would know.Here is another example: People like Wallace Matthews, talk about Mark Teixeira’s salary and complain about it. Why not complain about the $20,000,000 LIBERAL George Clooney gets per picture. Is that any better? I don’t think so.

  8. D.B.H.O.F. p.k.a The Last Don says:

    I personally do not care about this issue too much. I am all good with the Yankees getting any deal they can work out, that is their job. The amount of money paid to the players puts tons of tax money into the pot. All the jobs created, and money spent keeps money in NYC.

    I understand both sides of the argument, I just do not see the Yanks as the bad guys like a lot of people do in this. All the corruption that goes on in NY, and the Yanks getting tax free bonds gets people all huffy?

    Off topic kinda but the fellow that asked the question about Giuliani :

    “Do you remember what NYC was like before he got there?”

    Yes I do, and the man did a great job cleaning up the city in a ton of ways. I am not the biggest fan of Giuliani or any other politician, but the man did some very great things for the city (and I am talking pre 9-11)

    • All the jobs created, and money spent keeps money in NYC.

      FWIW, the Yankee Stadium Project created 15 actual, real, new jobs. That’s it.

      That’s not according to Brodsky, that’s according to the actual claims made by the Yankees on the documents given to the city.

      • ceciguante says:

        15 person-years of work?
        or 15 individual careers of work? (i.e. 15 people x 45 years?)

        big difference

        besides, this ignores the many people from all around the country who will make the trip to the bronx to see the new stadium, but who already saw the old stadium and otherwise wouldn’t return. just like when the skydome opened and toronto sold out games for 10 or 15 years, this stadium is going to be packed for a long time.

    • I understand both sides of the argument, I just do not see the Yanks as the bad guys like a lot of people do in this. All the corruption that goes on in NY, and the Yanks getting tax free bonds gets people all huffy?

      What, so the Yankees teaming up with unscrupulous, self interested politicians to gain financial benefit at the expense of city and state taxpayers is okay because other corporate entities also team up with unscrupulous, self interested politicians to gain financial benefit at the expense of city and state taxpayers?

      That’s an awfully low bar we’re setting. Corruption is justified if it’s extremely pervasive (and benefits things that we like)? That’s how the economy got in the shithole in the first place…

      • Old Ranger says:

        Corruption is corruption and should never be tolerated, by anyone. Sometimes (most times) I think these guys get elected and act like kids in a candy store…can’t keep their fingers out of the cookie jar.
        As far as jobs is concerned, what about all the people working in the construction business?

        • A) Those aren’t permanent jobs. That’s a temporary benefit. Come next year, all those guys will have to find something else to do.
          B) That’s still a bone of contention in the neighborhood, as the construction jobs were supposed to go to local businesses and contractors. Many if not most of these guys are from Jersey.

          • ceciguante says:

            if you had to build a $1+ billion stadium, would you agree at the start to give the construction contracts to guys from the south bronx?

            i sure as hell wouldn’t. that industry has enough pitfalls and corruption as it is. no way any sane business would limit itself to hiring from the illustrious construction and engineering industry hotbed of the south friggin bronx. please.

            • If that’s the case, they shouldn’t have included glorious promises to use local businesses. If they always planned on using Turner Construction and its army of Jersey workers, say so up front. Don’t lie to us to make us feel better about signing off on your project by promising to benefit citizens of the South Bronx by falsely claiming the jobs would be theirs.

    • Old Ranger says:

      Like before; “He done good, even before 9/11!”
      It doesn’t matter the party of a person, it’s what they do while in the office.

  9. Januz says:

    I am someone who remembers all too well what life was like under David Dinkins……….. A walking disaster area. I also remember him funding The National Tennis Center, and opposing baseball stadium funding. This is a classic example of liberal bias, the funding of an elitest sport that had even less interest in this country than ladies gymnastics. To make matters worse, look at the numbers of kids playing tennis in this country since it was erected……. It went way down to the point where it does not qualify for the top 20 sports in this country. Great job USTA, the only decent American players are the Williams Sisters (Of course, Richard Williams coached his daughters HIMSELF instead of depending on those clowns. Think he knew something?). It reminds me of “Hockey In Harlem”. It makes wealthy liberals feel good. However, how many players reached the NHL or college hockey from that program? I know the answer to the NHL is ZERO.
    Finally I will bet the Yankees win Title 27 in the new stadium, before a new American player wins a Grand Slam event or makes the NHL out of “Hockey In Harlem”

    • Again, dude, utterly off topic and nongermane. And, pretty weird, bizarre, and convoluted.

      Hockey in Harlem makes weathly liberals feel good? And… that has something to do with the Dinkins administration? WTF?

      Nevermind, don’t explain, I don’t want to know any more of your thought processes.

      • Januz says:

        I used Hockey in Harlem as an example of something that liberals like to praise, but the RESULTS are still a zero in producing NHL players (I did not single Dinkins out for that). I singled out Dinkins for the funding of the failed National Tennis Center, over baseball, and I noted the miserable RESULTS of the USTA in finding good young AMERICAN players.
        My views are not strange in the least, they are very constant and mainstream conservative. I am strongly in favor of funding things such as the New Stadium & Citi Field that in the end produce intended results (Wins, Titles, Tax Revenue, Reconigition etc) and oppose stuff like tennis, ballet and other things that 99% of the population care nothing about.

      • The Honorable Congressman Mondesi says:

        Don’t bother… You can’t argue with this kind of stuff.

        /goes back to enjoying ballet, classical music, jazz, and other forms of art

  10. NY Yankee Fan says:

    I think Randy Levine said it best:

    Levine: We’ll, I’d like to make this very clear. The way this stadium is being constructed and financed, every single penny, every single penny, is going to be paid for by the New York Yankees. There are no taxpayer funds that are being used to fund this stadium, which is different from 99.9 percent of stadiums all over the world. No taxpayer money will be used to fund this stadium. The Yankees are funding the entire bill of the construction and, unlike today, the maintenance and operation of the stadium. The Yankees are on the hook, there’s no liability for the city or any governmental agency. So this is a $1.3 billion investment in the poorest congressional district in the country. It’s the largest investment in the Bronx and, in these hard times, this has generated over 6,000 construction jobs by moving us across the street from the old Yankee Stadium to the new Yankee Stadium, we’re going to create approximately 1,000 new jobs. So this is a good thing.

    http://www.cnbc.com/id/28544778

    The so-called tax free bond merely means that the city and state government will not PROFIT from the Yankees building something that in most places the government would pay itself. It sounds great to the misinformed to believe that somehow the governments is “losing” money, but it is not.

    • Ben K. says:

      Consider the source of your information before your proclaim the rest of us to be misinformed.

    • “we’re going to create approximately 1,000 new jobs”

      That is a blatant, boldfaced lie.

      It sounds great to the misinformed to believe that somehow the governments is “losing” money, but it is not.

      In the deal, the city is forfeiting its right to ever charge the Yankees any property tax on the land underneath the stadium, for the life of the stadium.

      Not one cent, into perpetuity.

  11. NY Yankee Fan says:

    I do not need Randy Levine to tell me something that is plain as day and an issue I have followed with some interest. In fact, if not for the ability of the Yankees to offset the payments to build the stadium against the profit sharing, I do not see how they would not have demanded the tax payers actually contribute funds to build the new stadium, which we currently are not. Rudy originally was willing to contribute money to the new stadiums, which was canned by Bloomberg. Presently, the public will only be paying for improvements relating to transportation (subways, Metro-North). In the end, the tax free bonds premits the Yankees to borrow the money to pay for the stadium’s construction (they do not have over a billion dollars laying around) at better rates then if they would receive on the bonds (the debt instruments) if they were not tax free.

    I am sorry that I use the word misinformed, but it is accurate. The misinformation, in my opinion, is coming from politicans trying to score political points. But, it is always possible that I am the one misinformed, so I am ready to be corrected with a citation to what public money is being kicking in for the actual contruction of stadium.

  12. NY Yankee Fan says:

    Put another way, the use of tax free bonds makes the construction of the actual stadium revenue neutral for the city and state. The government does not profit on the construction of the stadium being funded by the Yankees with the assistance of loans, but it also does not have to contribute taxpayer money to build the stadium.

  13. NY Yankee Fan says:

    Below is cite to an interesting article on the financing of the stadium and why it is still a good deal for the Yankees even though it will be paying the entire frieght of $51 million for the muni-bonds. It should be noted that because the Yankees have to borrow even more money to build the same stadium that the team will actually be forced to pay more then the original estimate of $51 million.

    http://money.cnn.com/2007/08/1...../index.htm

  14. NY Yankee Fan says:

    To answer your question, the bonds are issued by the New York City Industrial Development Agency (administered by the New York City Economic Development Corporation) and repayed by the New York Yankees.

    http://en.wikipedia.org/wiki/New_Yankee_Stadium

    • Ben K. says:

      Exactly. That’s tax-payer money.

      (And if you could please use the “reply to this comment” link when doing so, we’d appreciate it.)

      • NY Yankee Fan says:

        No, investors lend the money through the use of the bonds and the Yankees pay it back. A partial quote from from wikipedia is as follows :

        “Michael Bloomberg, who succeeded Giuliani as mayor, exercised the escape clause in the agreements to back out of both deals, saying that the city could not afford to build new stadiums for the Yankees and Mets. Bloomberg said that unbeknownst to him, Giuliani had inserted a clause in this deal which loosened the teams’ leases with the city and would allow the Yankees and Mets to leave the city on 60 days’ notice to find a new home elsewhere if the city backed out of the agreement.[6][7] At the time, Bloomberg said that publicly funded stadiums were a poor investment. Under Bloomberg, the New York City government would only offer public financing for infrastructure improvements; the teams would have to pay for the stadiums themselves. Bloomberg called the former mayor’s agreements “corporate welfare.” Giuliani had already been instrumental in the construction of taxpayer-funded minor league baseball facilities KeySpan Park for the Mets’ minor league Brooklyn Cyclones and Richmond County Bank Ballpark for the Staten Island Yankees.”

        Time to sleep, thanks for an interesting discussion.

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