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September 16, 2008

Brodsky: city manipulated assessed value for Yankee Stadium (and a lot more)

Atlantic Yards Report

A not-so-understated press release issued [Monday] by Assemblyman Richard Brodsky about the Yankee Stadium deal indicates

1) an interim report from Brodsky's Assembly committee is coming [Tuesday];

2) Brodsky will be testifying Thursday in the Congressional hearing, which will look into not just the Yankee Stadium deal but also that contemplated for the planned Atlantic Yards arena; and

3) the city, according to the report, manipulated the assessed value of the stadium to meet the need for an IRS tax exemption.

That latter tactic, already the subject of columns by Juan Gonzalez of the Daily News, has potential parallels in the case of Atlantic Yards. Why? Only a high assessed value--likely much higher than that faced by Madison Square Garden--would be necessary to ensure that the PILOTs (payments in lieu of taxes) are sufficient to repay the tax-exempt bonds planned. (A lower assessed value means lower foregone taxes; the bond payments can't be higher than the foregone taxes.)

Update: The AP has responses from city officials and the Yankees.

article

[full press release after the jump]

“THE HOUSE THAT YOU BUILT”: BRODSKY RELEASES REPORT ON PUBLIC SUBSIDIES FOR NEW YANKEE STADIUM

Interim Report “The House That You Built” Reveals Massive Subsidies, Inflated Tax Assessment, Lack of Job Creation, Questionable Actions by NYCIDA, Luxury Suite Acquisition, Violation of IRS Requirements, Excessive Ticket Prices And Other Issues

What: Press conference to release the Brodsky Report “The House That You Built”

When: Tuesday, September 16, 2008 at 12:00 p.m.

Where: Corner of 164th Street and Jerome Avenue (directly behind the new Yankee Stadium), Bronx, New York

Assemblyman Richard Brodsky (D-Greenburgh), Chairman of the Assembly Committee on Corporations, Commissions and Authorities, will release tomorrow, Tuesday, September 16, 2008 at a press conference being held on the corner of 164th Street and Jerome Avenue (directly behind the new Yankee Stadium) in the Bronx, THE HOUSE THAT YOU BUILT: An Interim Report Into Public Financial Assistance for The New Yankee Stadium.

The 30-page document is based on a five-month investigation into the decision by the New York City Industrial Development Agency and others to provide hundreds of millions of public dollars for the construction of the new Stadium. The findings of this investigation are detailed in the Report and include:

  • $550 - $850 million dollars in taxpayer investment resulted in the creation of only 15 new permanent jobs

  • The public, not the Yankees, is paying the costs of constructing the new stadium

  • A luxury suite was secretly acquired by NYCIDA and the Mayor’s Office with the proceeds from stadium bonds

  • The City manipulated the assessed value of the Stadium to meet the need for an IRS tax exemption

  • Sworn commitments to the IRS, the National Park Service, and state officials were not kept

  • NYCIDA may have violated existing law in its creation of massive amounts of public debt, and its failure to assure public benefits from the massive taxpayer investment

  • The City refused to protect the public from excessive ticket price increases by the Yankees

  • Independent investigations of the actions of DOF, NYCIDA, and other public and private parties must be undertaken immediately

The Report is based on a review of thousands of pages of documents, sworn testimony by City officials, and meetings with City officials. It uncovers in depth the actions and decisions that led to the Yankees receipt of cash contributions from the City and State of about $350 million, and additional subsidies of between $200 and $500 million in interest savings on IRS approved tax-exempt bonds, for a total taxpayer investment of between $550 and $850 million and how in exchange the Stadium project will create 15 new permanent jobs, and little in private investment. The Report will be presented to the United States Congress in testimony to be given by Chairman Brodsky this Thursday in Washington.

Posted by lumi at September 16, 2008 5:20 AM