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October 21, 2008

New Treasury Department regulations would grandfather in tax-free bonds for Atlantic Yards arena

Atlantic Yards Report

The White House has thus far been unwilling to endorse a new stimulus package for the American people, but Norman Oder has breaking news of a Treasury Department stimulus for billionaire team owners.

In a big boost for developer Forest City Ratner, worth perhaps $165 million, the U.S. Treasury Department has issued a regulation (PDF) that would grandfather in tax-exempt bonds for the planned Atlantic Yards arena under a rule the Chief Counsel of the Internal Revenue Service (a bureau of the Treasury Department) called a “loophole.”

The Treasury Department, not heeding a request from Rep. Dennis Kucinich (D-OH) to delay action until his inquiries into sports facility finance issues are concluded, on Monday filed a new regulation that, in fact, would eliminate the loophole for new projects. However, a “transitional rule for certain projects substantially in progress” would allow tax-free bonds for the arena, as well additional tax-free bonds for new stadiums under construction for the Yankees and Mets, as requested by city and state economic development agencies.
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"The IRS's attempt to favor Bruce Ratner to the tune of an estimated $165 million on the backs of federal taxpayers, for a project that does nothing for those taxpayers, is obscene and offensive in the midst of an historic $700 billion bailout and a national fiscal crisis," commented Develop Don't Destroy Brooklyn (DDDB) spokesman Daniel Goldstein.

Bettina Damiani, Project Director of Good Jobs New York, noted that part of the regulation seems written to help the three sports teams: "The mumbo jumbo language that will help the NYC applicants borders on the comical. Isn’t it interesting that in the midst of what some people have called a global economic crisis, officials found the time to give more tax breaks to rich sports franchises?"

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Posted by eric at October 21, 2008 4:27 PM