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July 2, 2008
City on Yanks Bond Details: Reply Hazy, Ask Again Later
Runnin' Scared [The Village Voice blog]
by Neil deMause
Once again, we have to ask, if these deals are so good for us taxpayers, then why won't the public officials who orchestrate them just tell us the truth? The Village Voice's Neil deMause filed the following must-read report from today's Assembly hearing on subsidies for the new Yankee Stadium.
As promised, state assemblymember Richard Brodsky held a hearing this morning into the Yankees' latest request for $350 million (or so - see below) in city-backed tax-exempt bonds to help pay for extra doodads for their new stadium. The surprise: On the hot seat for the entire three-hour hearing was a single witness, Economic Development Corporation president Seth Pinsky, who at times struggled to come up with detailed responses to the questions posed by an increasingly impatient Brodsky.
Pinsky did explain one mystery right away: The reason no one can agree whether the additional Yankees bonds would total $350 million or $400 million or what is that the team hasn't submitted a formal request to the city, and won't until the Internal Revenue gives its blessing to the deal. "The Yankees have submitted a partially completed draft application to the [Industrial Development Agency] to put their project into the IDA queue," said Pinsky, and city lawyers have begun drawing up the paperwork, but nothing will go forward unless the IRS rescinds proposed rules that would have the effect of making the bonds more expensive. (Pinsky insisted no bond buyers would touch them at any price, effectively making them unusable for sports projects.) Likewise, a new set of bonds for the Mets (estimated by Pinsky at "tens of millions" of dollars) and promised financing for the Nets' Atlantic Yards project are on hold until the IRS comes to a decision.
Even the rough guesstimates in the Yanks' preliminary application, though, were not revealed at today's hearing - Pinsky's office had redacted them in the documents supplied to Brodsky. (At this point, visible steam all but shot out of the assemblymember's ears.) Pinsky insisted that letting on what the Yanks plan to spend their newfound money on could hurt their bargaining position with suppliers - leading Brodsky to snort that if the team wanted to keep the details a secret, CEO Lonn Trost shouldn't have gone bragging about them to reporters.
...Most of the hearing, though, was spent pressing Pinsky on why exactly the city needed to help finance the Yankees project in the first place. (Though the EDC chief rightly noted that the bulk of the tax-exempt bond costs would hit the federal government, the overall construction project is estimated to cost about $596 million in local subsidies, $419 million of that from the city.) Brodsky noted that in a "deviation letter" issued by the IDA to explain why the Yanks were being let out of the city's Uniform Tax Exemption Policy, the agency claimed that without public aid, the team would leave town:
Brodsky: Who in the IDA was told by the Yankees they would leave?
Pinsky: I don't recall.
Brodsky: Was anybody in the IDA told that?
Pinsky: I don't recall.
Posted by eric at July 2, 2008 6:20 PM