As the new Yankee Stadium near completion and the date rapidly approaches for the NYCIDA to determine whether or not the Yankees and Mets deserve another round of tax-exempt bonds, more stories are coming out that don’t portray the latest bond request in the latest light. Before we get to those, however, let me give some air time to the Yankees.
Earlier this week, Darrell Rovell interviewed Randy Levine about the state of Yankee economics, and the two got to talking about the stadium. Since CNBC doesn’t allow embedding of their videos, watch the video by clicking below.
Rovell posted a transcript of the interview on the CNBC website. The relevant part from the Yanks’ team president:
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.
In one sense, Levine is arguing semantics. In another sense, he’s flat-out wrong. I guess it’s not inaccurate to say that taxpayer money isn’t being spent on the stadium itself. Tax-payer money is getting spent on infrastructure improvements in the South Bronx, but those do have a value to the community. Whether the South Bronx, though, needs more parking lots is up for debate. The Metro-North stop is a wise and overdo investment.
Levine’s statement is not quite accurate though because the city isn’t getting money it should be getting through taxes if they continually grant the team tax-free bonds. I’m certainly not opposed to an initial outlay of tax incentives for construction, but at some point, that outlay has to stop. When the team wants more bonds to cover cost overruns and items such as bathrooms, suites, fancy video boards and team offices. Clearly, at this point, the team should be awarded taxed bonds. Enough is enough.
Meanwhile, I’d challenge Levine on the job statement too. This work has generated a bunch of temporary construction jobs, and that’s good. That “1000 new jobs” figure, however, is completely inaccurate. According to a recent examination of the Yanks’ own bond application (available here as a PDF), the stadium will generate a whopping 22 new permanent jobs, and the taxpayer subsidy would be around $2 billion if this latest round is approved. An economic stimulus it is not.
Now, I know many people are fine with subsidies for the stadium. To a extent, I am too, but not to this extreme. The city needs the taxes, and the Yanks shouldn’t get any exemption that others constructing $2-billion buildings wouldn’t get. It’s just bad government.
Hat tip to iYankees on the Darrell Rovell interview.