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November 3, 2009
Wrong Way PILOTs Would Crash into Atlantic Yards
The Huffington Post
by Daniel Goldstein
Imagine the city told you, that instead of paying property taxes on your home you could take the equivalent of the tax you would pay and use it for your mortgage. Not a bad deal…for the homeowner.
Now, lets say—the New York City Department of Finance (DOF), for example—worked with you to inflate the tax assessment of your property because the mortgage was $200,000 but your property taxes would only amount to $50,000 over the same time period. So, the DOF increased the tax assessment you won’t have to pay in order to meet the mortgage payments.
Even better…for the homeowner. For the City’s treasury, it’s all money down the drain.
The Yankees and Mets used this scheme which let taxpayers help pay for their new stadiums. Unfortunately, the Yankees financing was investigated, after the stadium was nearly completed, by New York Assemblyman Richard Brodsky and Congressman Dennis Kucinich. Plenty of evidence was found that the Yankees and the DOF were gaming the system by inflating tax assessments like the homeowner scenario above. In order to inflate the PILOT to meet the bond issuance the Yankees wanted, comparables for the Bronx assessment were found in a far-flung, and much more expensive area—Alphabet City. But nobody did anything about it. (Last month The Village Voice’s Wayne Barrett started looking more in-depth into this Bloomberg-favored scheme.)
Next up on the tax-exempt bonds tour is developer Forest City Ratner’s proposed Nets arena in Brooklyn. The big difference between Ratner’s arena and Yankee Stadium is that Ratner has yet to be approved for the bonds from the state or start construction, which means a political Sullenberger could (and should) swoop in to stop the scam before it happens.
Posted by eric at November 3, 2009 6:55 PM