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June 18, 2008
Treasury official: Intangible benefits, political constraints fuel stadium deals
Atlantic Yards Report
The only parties who seem to be justifying the use of tax-exempt bonds backed by fixed PILOTs (payments in lieu of taxes) to build sports facilities are sports team owners and their municipal backers. Academic analysts of professional sports and a wide array of civic groups criticize the provision as a wasteful subsidy.
Even the Chief Counsel for the Internal Revenue Service, Donald Korb, called the plan the IRS (seemingly reluctantly) approved for the construction of stadiums for the New York Yankees and New York Mets a "loophole" the IRS tried quickly to close.
Rep. Dennis Kucinich, who chairs the Domestic Policy Subcommittee of the House Committee on Oversight and Reform, doesn't think the IRS should let the stadium deals go through in the first place and has called for a moratorium until the IRS and Treasury Department explain their positions.
After all, as testimony last year showed, the Treasury Department had trouble justifying the deals, suggesting that local decisionmaking was affected by perceived intangible benefits as well as political and fiscal constraints.
That suggests that projects like the Atlantic Yards arena are essentially political projects that require significant scrutiny in the news pages, not cheerleading in the sports pages.
Posted by eric at June 18, 2008 9:14 AM