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September 12, 2008

Yanks land deal ain't fair ball

NY Daily News
by Juan Gonzalez


Q. How can it be that the land under the new Yankee Stadium is worth 17 times as much as the land under the old Yankee Stadium, which sits just a infield pop-up away?

A. Because the city appears to be colluding with the Yankees to hand the nation's taxpayers the bill for tax-exempt bonds!

In January 2007, the city assessed land under the new Yankee Stadium at 10 times the market value of virtually all other land in the South Bronx neighborhood.

The assessment - not including the new ballpark - worked out to a fair market value of $275 per square foot. But a Daily News analysis of city property records shows that city assessors said land on a dozen blocks around the site was worth an average of less than $25 a square foot.

Lawmakers in Washington and Albany are investigating whether city officials inflated the new stadium's land value to make it possible for the Yankees to pay back nearly $1 billion in tax-free bonds for the project.

The Yankees deal calls for the team to begin paying back its original bonds once the new stadium opens in April through the use of something called Payments in Lieu of Taxes. IRS rules say such payments can't be higher than the official tax on the property that is being financed.

In other words, the Yankees need the highest possible assessment to be able to make their huge debt payments.


NoLandGrab: If the Yankees, or the Nets, for that matter, are permitted to issue tax-exempt bonds rather than taxable bonds, it can save them hundreds of millions of dollars in interest payments. Supporters say that most of the tax burden falls on the Federal goverment — but we're all federal taxpayers. And if the onus for funding our city's new sports venues is being spread around the nation, you can bet that we, in turn, are being handed a bill to help fund stadiums and arenas in other states, too.

Posted by eric at September 12, 2008 1:49 PM