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September 10, 2008

Kucinich's Subcommittee to look at stadium and AY arena deals

Atlantic Yards Report

Apparently the July 2 State Assembly hearing on financing the new Yankee Stadium was just a warm-up, since some tough questions about the deals for Yankee Stadium, the Mets' Citifield, and yes, the planned Atlantic Yards arena will be raised next week in Congress.

Rep. Dennis Kucinich (D-OH), who chairs Domestic Policy Subcommittee of the Oversight and Government Reform Committee, yesterday announced a hearing to be held September 18. It follows up on two public hearings the subcommittee held last year (3/29/07 and 10/10/07) that looked more broadly at some of the policy issues.

No witness list has been announced, but I assume someone from the New York City Industrial Development Authority, whose Seth Pinsky was on the hot seat July 2, will be among those present.

While no legislation has been proposed yet, the Subcommittee's concern may put pressure on the Internal Revenue Service (IRS) to clarify and finalize a proposed rule regarding PILOTs (payments in lieu of taxes) to finance sports facilities. That rule could stymie tax-exempt funding for the Atlantic Yards arena--or the city and state could succeed in getting the arena grandfathered in under the ruling that allowed funding for the two baseball stadiums.

The Yankees and Mets, with the assistance of New York City and State, gained "private letter rulings" (PLRs) from the IRS in October 2006 allowing an aggressive plan for tax-exempt financing. After financing for those stadiums was approved, the IRS issued a revised regulation that would eliminate what its chief counsel called a "loophole."

New York City and State would like to see the loophole extended for additional financing for the two stadiums, as well as for the Atlantic Yards arena, which officials contend should be grandfathered in under those old rules, given that it was proposed and proceeded long before October 2006. However, the project was not approved until December 2006.

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Posted by lumi at September 10, 2008 5:05 AM