February 5, 2012
As Super Bowl Shows, Build Stadiums for Love and Not Money: View
Bloomberg View
As you watch the Super Bowl Feb. 5, spare a thought for the taxpayers in the host city of Indianapolis. The stadium in which the game will be played has been financed largely at their expense and, like so many sports venues built with public money, the cost just keeps growing.
Lucas Oil Stadium, where the Colts play eight regular season games per year, has every amenity: a retractable roof, state-of-the-art turf, seven locker rooms, 137 luxury suites, 1,000 flat-screen televisions. And well it should: It cost $720 million to build.
Of this, the Colts paid only $100 million. To cover the rest, local officials raised taxes on hotels, restaurants and rental cars, and issued bonds that soon led to ballooning financing costs.
...
Although the economic rationale for publicly financing stadiums is poor, an important fact remains: People really, really like sports. And they will often be willing to pay a high price to keep their favorite teams or lure new ones. Sports are part of what makes a city a city -- what would Boston be without the Red Sox, or Chicago without the Bears?
But this calculus is an ethereal one. What price could a city government place on its citizens’ love for their sports teams?
The answer is that public funding for new sports stadiums should be up to voters to decide. Cities should make sure the public has access to independent evaluations of the costs and benefits of building a stadium -- not just the inflated “economic-impact studies” done at the behest of team owners and publicized in the media. It should also be made clear exactly what other subsidies the sports teams will be getting: from cheap loans to cheap rent to cheap land.
Related coverage...
Atlantic Yards Report, Bloomberg (well, his media company) calls for public vote on funding for sports facilities
Now the Brooklyn arena, as well as the two new baseball stadiums, have relatively less direct subsidy than many other deals.
But they didn't need it. They get indirect subsidies, access to sponsors in the nation's biggest media market, and other revenue opportunities.
The city government--hello, Mr. Bloomberg--produced and embraced cost-benefit analyses for the arena that differed significantly from that produced by the NYC Independent Budget Office.
And there was never a vote.
Posted by steve at 1:01 PM
February 3, 2012
Pricey Yankee Stadium parking garages hardly used and owner heading for default on $237 million in bonds
Lots part of new stadium deal but have turned into waste of space — 21 acres — producing nothing for taxpayers
NY Daily News
by Juan Gonzalez
Pshaw! Parking garages surely are a good deal for the taxpayers. Uh...
THE FIRM that built and manages the new Yankee Stadium parking garages can’t repay $237 million in tax-exempt bonds the Bloomberg administration arranged for it four years ago, new financial records show.
Bronx Parking Development Company LLC is running perilously low on cash reserves and faces a looming default by the end of the year, according to a report filed Friday by a trustee for the firm’s bondholders.
Time is running out, in other words, to avoid one of the biggest failures in decades of bonds issued by a New York City agency.
The simple fact is that Bloomberg and his aides made a costly mistake when they succumbed back in 2005 to the Yankees’ demand for a 9,000-space garage system. It was all part of the deal for the team to build a new stadium in the Bronx.
...Bronx Parking Development has turned into a giant tax deadbeat. The firm, which is not connected to the Yankees, has failed to pay any rent or property taxes, even though the garages sit on 21 acres of leased public land.
It currently owes the city a whopping $25 million.
Posted by eric at 1:01 PM
Super Bowl Lands on Taxpayers’ Backs as Stadium Deal Turns Sour
Bloomberg Businessweek
by Aaron Kuriloff and Darrell Preston
Hosting the Super Bowl has to be a civic moneymaker, right? Guess again.
While Super Bowl fans are riding zip lines through downtown Indianapolis this week in the runup to the National Football League’s championship game, taxpayers are digging deeper in their pockets to pay for the stadium where the game will be played.
The $720 million Lucas Oil Stadium, where the New York Giants meet the New England Patriots on Feb. 5, has prompted local officials to raise hotel, restaurant and rental car taxes, and make other payments on top of about $43 million in unexpected financing costs related to their sports and convention facilities.
“They said, ‘We’re going to have one great fantastic party with an unbelievable advertisement for Indianapolis and it isn’t going to cost taxpayers a dime,’” said Pat Andrews, 60, a blogger and community activist who ran unsuccessfully for City Council last year. “Well, baloney.”
Posted by eric at 12:57 PM
January 2, 2012
RebelMart's Mimeograph Machine, on sports: "we sit in silence when owners and leagues rip us off"
Atlantic Yards Report
Musician/designer/activist Scott M.X. Turner, he of the website/group Fans for Fair Play and the one-man band RebelMart, has moved from Brooklyn to Seattle, but he still keeps in touch with his daily Mimeograph Machine, a newsletter/broadside. (Sign up at rebelmartmx[at]gmail[dot]com.)
Below, with his permission, is Volume 1, Number 25, from 12/28/11, expressing some of the dismay regarding big-time sports that's going around.
RebelMart's Mimeograph Machine, on Sports
VOL. 1, NUMBER 25
Sports...
Fun. Despicable. Macho. Colorful. Epic. Eccentric. Racist. Capitalist. Good exercise. Sexist. Drunken. Homophobic. Adrenalizing. Musical. Classist. Memorable. Bonding. Violent. Lucrative. Divisive. Seductive. Life-affirming. Deadly.
I find it hard to explain to people why I like sports. It used to be because I ran with lots of political activists who deplored sports. They're right to. But they're wrong to toss it out with the bathwater.
They were also wrong to dismiss sports' enormous implications in the world today. A lot of sporting elements flail about in the world of political activism. In the battle royale of The People vs. The Man, knowing about sports is a vital thing. I'd say "tactic," but that makes the whole world-revolution thing sound exploitative. I like the whole world-revolution thing, you know.
I'm still a lefty and I still have that discussion all the time. I guess what I really mean is, I find it hard to explain to myself why I like sports. At least, still like sports.
And that's the rosin-caked razor's edge my sports-love balances atop.
I like sports and deplore sports. What other thing, besides life itself, contains as many descriptives as the top of this issue of the Mimeograph Machine?
Michael O'Keeffe, one of New York's best sportswriters -- hell, one of the Apple's best journalists, period -- once told me "Sports makes it hard to like sports."
Yeah!
I got on this jag about sports today after reading an article in the New York Times today -- about the New York Mets' desperate finances. Too many belly-button-examining books have been written about sports'n'culture'n'politics. Still, it made me think again about a very basic issue.
Sports fans are incredibly smart. Via sports, we can crunch numbers, solve complex geometry in milliseconds, explore military strategies, fathom chemistry, analyze financial formulas, present a sprawling vista of facts at the drop of a hat, beat Lincoln and Douglas in a debate, and most importantly, detect bullshit instantaneously.
So how come we sports fans are such fucking idiots?
We love our teams, our players, our games all the while knowing they're none of those things "ours." Jerry Seinfeld once famously said "you're actually rooting for the clothes." [AYR: see the video] Civic pride is a pretty unquantifiable thing -- yet it's always used to justify all the wasteful projects spend taxpayer dollars on.
Posted by steve at 4:26 PM
December 6, 2011
Feds open SEC probe into Miami Marlins stadium deal
The U.S. Securities & Exchange Commission has subpoenaed records from Miami-Dade County and Miami over the deal to build a new ballpark for the Marlins.
Miami Herald
by Charles Rabin, Martha Brannigan and Patricia Mazzei
Look who's just catching on!
Federal authorities have opened a wide-ranging investigation into the Miami Marlins’ controversial ballpark deal with Miami-Dade County and the city of Miami, demanding financial information underpinning nearly $500 million in bond sales as well as records of campaign contributions from the Marlins to local and state elected leaders.
In a pair of lengthy letters delivered to government attorneys Thursday, the U.S. Securities & Exchange Commission gave the city and county until Jan. 6 to deliver everything from minutes of meetings between government leaders and Marlins owner Jeffrey Loria and Major League Baseball Commissioner Bud Selig, to records of Marlins finances dating back to 2007.
In the almost-identical subpoenas, the SEC also requested documents concerning stadium parking garages built by Miami. The Miami Herald reported Nov. 22 that city leaders are now complaining they were hoodwinked into likely having to pay an annual $2 million tax bill on the garages.
The financing agreement to build the controversial new stadium in Little Havana left the county and city on the hook for almost 80 percent of the overall $634 million tab, which critics considered a giveaway to the Marlins. The deal was a contributing factor in the recall of Miami-Dade Mayor Carlos Alvarez, who championed it.
...Neither subpoena said exactly what the SEC was looking for, though federal investigations into municipalities generally focus on whether bond holders were misled about finances while being enticed to purchase the bonds.
Two former SEC attorneys who reviewed the subpoenas for The Herald said government investigators are likely looking at whether the city and county did proper due diligence into the Marlins’ finances, and whether there was any influence peddling to local politicians.
“There’s always the issue of pay-to-play. They want to know whether there were unlawful contributions,” said William Nortman, a Fort Lauderdale attorney and former SEC regional administrator. “Don’t forget, there was a lot of controversy over the building of this in Miami. They are examining how this came to be. They want to know whether inappropriate payments were made.”
NoLandGrab: Hey, SEC, you might want to look into another recent deal in which approximately $500 million of bonds were sold to fund construction of a basketball arena.
Posted by eric at 1:25 PM
November 8, 2011
Rogues Gallery: The AIANY (“American Institute of Architects New York”) Subway Corridor Posters Under the IFC Center Showing “Urbanized”
Noticing New York
Michael D.D. White notices something familiar on a subway advert, and offers a remedy.
On our way to catch and write about “Urbanized,” the new Gary Hustwit documentary about urban design we discovered, heading up from the A Train, that the subway corridor directly under the IFC Center theater hosting the film is lined with AIANY (“American Institute of Architects New York”) posters featuring different architectural projects. Some of those images are of Hall of Shame subsidy grabbers, and for sure at least the pictures of the of the net-public-loss Atlantic Yards Prokhorov/Ratner (“Barclays”) basketball arena are destined to be disgruntling.
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...
The subway images promoting the Prokhorov/Ratner arena and these other government assisted, government subsidized projects is also part of something else that has been a Noticing New York preoccupation recently: The pummeling we are getting everywhere we go reflecting a severe imbalance in the public dialogue delivered via paid speech. Big picture, the skewing of wealth in this country is working in conjunction with the increasing privatization of the traditional avenues and elements of public speech (including but not limited to public spaces and streets in which to speak). That means that we are forever being subjected to ubiquitous, insistent cues and reinforcements of (for example) the way Forest City Ratner wants things perceived.
Posted by eric at 9:58 AM
November 7, 2011
Political Footballs: L.A.'s Misguided Plans For A Downtown Stadium
Forbes
by Joel Kotkin
When is a stadium deal a bad deal? Um, always?
Indeed years of independent investigations have discovered that urban vanity projects like sports teams and convention centers add little to permanent employment or overall regional economic well-being. As a Minneapolis Fed study revealed, consumers simply shift their expenditures from other activities to the new stadium. Certainly mega-stadiums have done little to boost sad-sack, depopulating cities such as St. Louis, Baltimore or Cleveland.
Commitments to mega-projects tend to further drive urban areas into debt, largely by issuing more bonds that taxpayers are obligated to pay back. One particularly gruesome case can be found in Harrisburg, Pa., whose underwriting of a minor league baseball team helped push the city into bankruptcy. To get the stadium deal, Los Angeles, already over-indebted and suffering a poor credit rating, will issue another $275 million.
Such projects often obscure the real and more complex challenge of nurturing broad-based economic growth. This would require substantive change in a city or regional political culture. Instead the football stadium services two basic political constituencies: large unions and big-time speculators, particularly in the downtown area. The fact that the stadium will be built with union labor, for example, all but guaranteed its approval by the city’s trade union-dominated council.
Posted by eric at 11:11 AM
October 10, 2011
Want to be NFL owner? Packers near 5th stock sale
AP via Yahoo! Sports
by Dinesh Ramde
Here's a novel idea — a stadium renovation being done without public money.
The Green Bay Packers, the NFL’s only publicly owned team, are moving toward a new stock sale by the end of the year to raise money that would help pay for $130 million in renovations at historic Lambeau Field.
Each share would likely cost about $200 and include voting rights, though the value wouldn’t appreciate and there would be no dividends. Stockholders would be able to attend annual meetings at Lambeau, and they’d enjoy such perks as tours of the playing field and locker rooms.
We're not sure that stock that doesn't appreciate or pay dividends and can't be resold is a good investment, but heck, that's true of most investments these days.
The Packers plan to add thousands of seats and other stadium amenities in time for the 2013 season. While other teams often ask taxpayers to help pay for building upgrades, the Packers will foot the entire bill themselves through the stock sale and private financing.
That’s one reason Michael Constantine, a 26-year-old Wisconsin native who now lives in Seattle, intends to buy a share or two.
“I feel like the American public has spent enough over the last 20, 30 years to build and renovate stadiums,” said Constantine, a staunch Packers fan. “I prefer the sale of stock to raising any sales tax.”
Posted by eric at 10:47 PM
October 7, 2011
Silver lining in the Yankees disaster
Crains NY Business
by Greg David
The former Crain's editor, who has championed Atlantic Yards and its taxpayer-burdening arena from the get-go, is suddenly a critic of subsidies for sporting venues.
He must've listened to the clip of The Brian Lehrer Show we posted this morning.
The Yankees are crying in their beer (or cursing A-Rod) but there is one silver lining to their unexpectedly quick loss in the baseball playoffs: The defeat won’t damage the city’s economy much. Baseball, you see, isn’t like the sporting events that really power the economy—namely the New York City Marathon and US Open Tennis Championship.
It's more like basketball. Nets basketball.
The best study of the economic impact of a major league playoff game was published in 2008 by economics professors Victor Matheson and Robert Baade. It should be noted that Mr. Baade has been a critic of public money that is used to subsidize sports stadiums. Nevertheless, his research is pretty thorough. He found that the average playoff game generates about $7 million in economic impact for the home city. The figure would probably be a little higher in New York, so let’s say the benefit might be $9 million.
...None of this should come as a surprise. While the Yankees are a tourist attraction, the majority of fans are New Yorkers. Season and multi-game ticket packages account for the vast majority of ticket sales for the Yankees, as anyone trying to go to a single game knows. Many tickets are resold by Yankee fans looking for some extra dough, so the number of out-of-towners is larger for playoff games, as is the out-of-town media contingent. Still, seats are primarily occupied by New Yorkers who drive and take public transit, and go home after the game.
...The irony, say people like Professor Baade, is that baseball stadiums get the biggest subsidies. In New York, the situation is more perverse. The Bloomberg Administration wants to charge the marathon a fee for the police and other services it provides. That may be understandable, but shouldn’t Yankees pay for the extra burden of the playoffs too?
NoLandGrab: As Baade explained this morning, people who attend baseball (or basketball) games are spending money that they might spend on other entertainment, like a movie or theater. They don't generate new and separate economic activity. Plus, movies and theater aren't subsidized like baseball (or basketball) games are. And no one ever factors in the substantial costs, like police overtime (or massive - and noisy - infrastructure upgrades.
Posted by eric at 4:16 PM
Stadium and Dollars
WNYC's Brian Lehrer Show
Stadium-finance expert Robert Baade joins guest-host Mike Pesca to poke gaping holes in claims that stadiums and arenas are economic engines.
Posted by eric at 1:34 PM
September 24, 2011
Yankee Stadium Parking Woes Drag On
Transportation Nation
by Jim O'Grady
The new Yankee Stadium, and its excessive parking, continues to pay great dividends for Bronx residents.
The New York Yankees are headed to the playoffs. But the company running Yankee Stadium’s parking garages remains mired in a slump. With the baseball season just about over, the numbers are in: paying customers have filled only 45 percent of the stadium’s 9,000 parking spots on game days this season.
And now development officials say they are looking to tear down one of the garages and replace it with a first class hotel and conference center. The idea is that development will bring in extra revenue and make the remaining parking spots more valuable.The Yankees argued when seeking city council approval that it’s new stadium would require more parking. But the opposite happened.
...The Bronx Parking Development Company, which owns the eleven garages and surface lots that serve the new Yankee Stadium, built thousands of extra spots. One garage was erected on parkland that New York City, over many residents’ objections, gave to the company. The city has worked since then to create an equal amount of parkland in the area, but progress has been slow: the All Hallows High School baseball team, just four blocks from the stadium, has been without a home field for five years.
...The new Yankee Stadium opened in 2009. Its extensive parking system has underperformed from the start. Now the Bronx Parking Development Company is struggling to pay back the $237 million dollars it owes in tax-exempt bonds.
The company’s next bond payment is November 1. Company vice president Chuck Lesnick said he didn’t know whether the company will need to dip into its cash serves to meet the obligation, a sign that the enterprise could be teetering on default. Lesnick said in an interview that he’d even be open to selling off surface parking lots around the stadium to raise extra money.
Posted by eric at 10:30 AM
September 22, 2011
Adding context to coverage of the MSG renovation; will that come with Barclays coverage too?
Atlantic Yards Report
A New York Times Dining section article yesterday on the upgrade in food offerings at Madison Square Garden, headlined At Madison Square Garden, it’s Hey, Getcher Lobster Roll, contained this piece of welcome context:
The Garden is being renovated without state or city subsidies, although it will continue to benefit from its longtime property tax exemption. To pay for the work, the Garden has said that the cost of Knicks season tickets will jump an average 49 percent, and Rangers seats will go up by 23 percent. Twenty new courtside-access suites (fitted with bathrooms and fireplaces) have a yearly rental fee of about $1 million each; all are spoken for. Their food spectrum will be drawn from Mr. Vongerichten’s suite menu and the other upscale concessionaires.
Will the future coverage of the Barclays Center, describing all the ways the Nets are trying to play to the public, mention the subsidies, tax breaks, naming rights and luxury suites behind the new building?
NoLandGrab: Yes! All Dining Section coverage of the Barclays Center is sure to add that context.
Posted by eric at 11:15 AM
August 5, 2011
Why Do Mayors Love Sports Stadiums?
The Nation
by Neil deMause
A must-read from the expert in sports swindles. And after you read it, send a copy to every one of your elected representatives.
On a busy streetcorner in downtown Brooklyn, the steel girders are starting to rise. After a decade of protests by residents (including local celebrities like Steve Buscemi, Jennifer Egan and Jonathan Lethem) and innumerable lawsuits, developer Bruce Ratner’s vision of a new arena to bring the New Jersey Nets basketball team to Brooklyn—with the aid of about $500 million in city and state subsidies—is taking root, with a scheduled opening in September 2012.
Yet Atlantic Yards, as Ratner has dubbed his twenty-two-acre development project on the edge of the bustling neighborhood of Prospect Heights, won’t look much like the image he first unveiled in 2003. The “Miss Brooklyn” office tower, which was supposed to bring jobs to the community, is gone, a victim of the virtual collapse of New York’s commercial real estate market. Meanwhile, the condo towers that were supposed to provide more than 2,250 units of affordable housing are unlikely to be built anytime soon, if at all. (The latest plan involves a “modular” building, akin to stacking shipping containers thirty-four stories high.) The Nets, meanwhile, are spending two seasons playing in Newark’s Prudential Center, another heavily subsidized building ($200 million fronted by taxpayers) that was supposed to revitalize its surrounding neighborhood but that still rests among the same discount stores and fast-food joints that lined Market Street before the arena opened in 2007.
It’s a story that could have been told in almost any American city over the past two decades. Owners of teams in the “big four” sports leagues—the NFL, MLB, NBA and NHL—have reaped nearly $20 billion in taxpayer subsidies for new homes since 1990. And for just as long, fans, urban planners and economists have argued that building facilities for private sports teams is a massive waste of public money. As University of Chicago economist Allen Sanderson memorably put it, “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”
The article is also cross-posted on the NPR web site under the headline "Stop The Subsidy-Sucking Sports Stadiums."
Related coverage...
Atlantic Yards Report, From Neil deMause in The Nation: Why Do Mayors Love Sports Stadiums?
Here's the basic explanation:
Why do new sports facilities have such a hold on local elected officials? The simplest explanation is fear: because team owners can choose new cities but cities can't choose new teams — thanks to the leagues' government-sanctioned monopolies over franchise placement — mayors feel they must offer owners anything they want.
However, as described, most teams don't leave, just use the potential as a threat.
Other justifications: sports facilities serve as monuments to the people who helped get them done. (As we've learned, elected officials like groundbreakings and ribbon-cuttings.)
Consulting firms produce glowing "economic impact studies," leading one public official to comment, "Unfortunately, it doesn't appear that elected officials are much into evidence-based decision-making."
And, deMause also cites "[o]utright manipulation" and increasingly clever financing deals, as with the two baseball stadiums in New York.
Posted by eric at 11:48 AM
August 4, 2011
The inconsistency of the New York Times editorial page: Islanders owner should build new arena on his own, but request that Ratner "pay his own way" forgotten
Atlantic Yards Report
Is the New York Times editorial page consistent when it comes to public subsidies for sports facilities? Of course not.
An editorial in yesterday's New York Times was headlined Voters Nix $400 Million Hockey Tix:
Voters in Nassau County, showing far better sense and grasp of arithmetic than their elected leaders, have rejected a scheme to raise their taxes so their county could borrow $400 million to build a new hockey arena.
The Times, sounding like it's channeled the collected works Neil deMause, observes:
1. The deal stunk. That’s usually so when governments throw money at sports teams. Mr. Mangano was asking for a 4 percent tax increase, an estimated $14 to $58 more a year per household, in return for gauzy promises of new jobs and tax revenue...
...3. If [Islanders owner] Mr. [Charles] Wang needs a new arena, let him build it. Last we checked, professional sports was still a private (and highly lucrative) business, not a public utility.
What happened to "Mr. Ratner should pay his own way"?
All well and good, but the Times is not exactly consistent. Remember the newspaper's stance in a 3/27/05 editorial headlined A Triple Play for New York Teams:
But the city and state are each supposed to contribute $100 million to build streets and sidewalks and prepare the site for development. That's unnecessary: Mr. Ratner should pay his own way.
(Emphasis added)
That position was forgotten in all subsequent editorials.
Related content...
The New York Times, Voters Nix $400 Million Hockey Tix
Posted by eric at 10:30 PM
August 3, 2011
What the Long Island Vote Means for the Islanders (and NHL Fans)
Grantland
by Katie Baker
The vote returns had scarcely been counted by the time many settled on that most universal of solutions: "Move to Brooklyn!"
With a brand new arena rising in Atlantic Yards that will soon hold the Brooklyn s, it seems like an obvious fit. But fit is actually exactly the problem: the arena's original design was tweaked (as these things always are) to lower costs, and the result is less than ideal. The ice surface could be regulation size, but so many seats would have to be taken out to make it so that the arena would end up with the smallest capacity in the league. And the Isles would be the Barclays Center's lowly second tenant. Those are worrisome limitations for a franchise trying to forge a fresh start.
Posted by eric at 8:54 AM
August 2, 2011
Are the Islanders Moving to Brooklyn Now or What?
Runnin' Scared
by Neil deMause
Everyone's favorite critic of publicly funded sports facilities weighs in on the Nassau Coliseum fallout.
So Nassau County held its vote on the $400 million New York Islanders arena plan yesterday, and for team owner Charles Wang things went about as well as ... it's tempting to say "as well as a typical Islanders game," but that'd be cruel. In any case, the final vote was 57-43% against funding a new arena (plus a new minor-league baseball stadium for an as-yet nonexistent Atlantic League team) with a 4% property tax hike, one that just might have been illegal.
...The question, though, is where the Islanders would go? CBSSports.com runs down the likely leading candidates, marking Brooklyn, Quebec City, Kansas City, Houston, Seattle, Milwaukee, and Hamilton as the front-runners. But each option comes with significant hurdles.
...Brooklyn's new Barclay Center, the home of the Nets starting next year that is rapidly taking shape atop the ghost of Freddy's, has been widely talked up as a prospective landing place for the Islanders: It's new, and it's easily accessible by Long Island Rail Road if you don't mind the change at Jamaica. Unfortunately, as part of developer Bruce Ratner's plan to downsize the Brooklyn arena's budget, he shrunk the arena as well — to the point where the floor is now far too small to accommodate an NHL rink. (The Post reported today that the Barclays would be an "NHL-regulation size arena," but they appear to be talking about seating capacity, not floor size.) Tearing out the lower seating bowl and rebuilding it to fit hockey might be feasible, but would no doubt be pricey.
(Barclays Center CEO Brett Yormark tells the Voice in an emailed statement: "The Barclays Center will have an ice rink that can support professional hockey. Due to the venue's design, the capacity for hockey would be a few thousand seats less than for basketball. While we hope to explore hockey opportunities in the future, our primary focus at the moment is to build the best sports and entertainment venue in the world." Which doesn't answer much about what "can support" means — would it end up like the old America West Arena in Phoenix, with some seats that couldn't see the nets? — and Yormark didn't respond to questions about cost.)
Posted by eric at 2:13 PM
With voters defeating bond for Nassau Coliseum, a big boost for the Barclays Center (if no new plan in Long Island emerges)
Atlantic Yards Report
Nassau County voters (those that bothered to turn out), given an actual opportunity to weigh in on the public funding of a new arena for the NHL's Islanders, resoundingly rejected a proposed $400 million bond issue.
Barclays Center promoters got a big boost with the defeat yesterday by Nassau County voters (well, about ten percent of them) of a bond measure to replace the Nassau Coliseum, home of the hockey Islanders and numerous concerts and shows.
While it's possible some new plan may arise to house the team, or refurbish the building, where the Islanders have a lease until 2015, the demise of the Coliseum, with no replacement, would divert events to other venues.
The closest? The Barclays Center, accessible to many Long Islanders via the Long Island Rail Road. So, even without the Islanders, the Barclays Center would gain.
...The package for the Atlantic Yards project, of course, was never put to a vote, nor presented as starkly, as tax breaks and direct subsidies were spread among city, state, and federal taxpayers.
The vote yesterday, scheduled on a summer Monday rather than Election Day, drew only about ten percent of voters--likely those motivated pro and con.
Meanwhile, let the ridiculous speculating about the Brooklyn Islanders resume.
Related coverage...
The Brooklyn Blog [NYPost.com], Nassau nix leaves door open for Islanders move to Brooklyn
For some time, officials overseeing the planned Barclays Center being built for the NBA’s Nets in Brooklyn have said the arena would be too small for NHL hockey.
However, arena officials yesterday confirmed the Barclays Center will be fitted with an NHL-regulation size arena when it opens in Sept. 2012, although they declined comment on potential interest in the Islanders.
The arena holds 18,000 seats for basketball, but some seating would have to be removed to accommodate hockey. Sources said the arena could hold about 14,500 seats for hockey.
Marty Markowitz, who, surprisingly, was not on an illegal foreign junket, had two cents left over after his recent $20,000 fine:
"If they come here, I would personally take the first spin on the Zamboni."
NoLandGrab: No doubt accompanied by Jamie.
Yahoo! Sports, After voter rejection, Islanders to Brooklyn noise pollution
NetsDaily, With Islander Arena Voted Down, Is Barclays Center A Possibility?
Posted by eric at 1:37 PM
August 1, 2011
When it comes to Nassau Coliseum coverage, Times reporters express skepticism for sports facility projections, give prominence to critic saying emphasis on sports distracts from real estate deal
Atlantic Yards Report
Today's Times article, $400 Million Plan on Nassau Coliseum Goes to Vote, contained a couple of astonishing paragraphs.
First, a declaration, sans caveat, that projections are generally overblown:
As cities like Cincinnati, Houston and Seattle have learned, the construction of stadiums and arenas almost always costs more than expected, rarely produces the economic benefits initially promised and can saddle local governments with tens of millions of dollars in debts, driving holes through budgets.
Ok, so why did that Times, at the arena groundbreaking last year, uncritically quote outlandish statements about Atlantic Yards benefits?
The article closes with a gimlet-eyed view of what's at stake:
“[Islanders owner Charles] Wang wants to make money and [County Executive Ed] Mangano wants to save the Islanders,” said Clifford B. Sondock, the president of the Land Use Institute, which opposes the project. “Ed and Charles have made this an issue of the Islanders when it is really a real estate deal.”.
And what about "Jobs, Housing, and Hoops"?
Posted by eric at 10:09 PM
A Story of Three Arenas: Of Sports, Money and Democracy
MetroFocus
by John Farley
Why does the mixture of sports and building incite such furious debate?
The current dispute over whether to replace the aging Nassau Coliseum has elicited significantly more controversy than most big development projects, but that shouldn’t come as a surprise to Tri-state residents. Similar controversies have consumed the planning and construction of two other arenas in recent years: Atlantic Yards’ Barclay Center in Brooklyn and Newark’s Prudential Center in New Jersey. MetroFocus looks at why these projects, which pit the public’s love of sports against its fear of economic waste and exclusionary political processes, continue to get built.
...The Atlantic Yards project is perhaps the most glaring example of arena-mania bumping awkwardly up against the democratic process. The project began in 2003 when developer Forest City Ratner announced its plan to build a $2.5 billion development featuring affordable housing and a new arena that would bring the New Jersey Nets to Brooklyn. Since then, an organized opposition claims that a small group of powerful politicians teamed up with wealthy corporate interests to bypass the city’s public land review process and used illegal eminent domain procedures to force residents from their homes. Daniel Goldstein of the opposition group Develop Don’t Destroy Brooklyn has called the project “a corrupt land grab” and “a failure of democracy.”
NoLandGrab: At least Nassau County voters get to have their say about a new Coliseum. On a Monday. In August. With some uncertainty over polling locations.
Posted by eric at 2:13 PM
Residents Divided Over New Nassau Coliseum Proposal
CBS New York
Hey, just what Nassau County taxpayers need! A $400 million "investment" in a hockey arena.
Monday’s special election will decide the fate of the project. Voters will decide if the county should borrow $400 million for a new Nassau Coliseum and a minor-league baseball stadium.
Islanders’ owner Charles Wang says he’ll move the team without a new arena.
There's a threat.
“Nassau County is effectively bankrupt. They have too much debt. They can’t pay their bills. So it flies in the logic of them going to borrow $400 million to build a stadium,” said Clifford Sondock of the Land Use Institute.
The plan with interest would cost each homeowner about $58, though County Exec. Ed Mangano estimates it will cost homeowners $13.80, based on revenue sharing from sales, hotel and entertainment taxes, and the creation of more than 1,500 construction jobs and 3,040 permanent jobs.
Hmm, these promises seem vaguely familiar.
“I’m a resident in East Meadow, near the coliseum, love hockey, I don’t want to pay for it,” said resident Irwin Kahn.
Posted by eric at 10:03 AM
July 31, 2011
Public vote (!) tomorrow to replace Nassau Coliseum; demise would boost Barclays Center; Daily News, Post, slam (!) public arena funding; economist warns of "corporate welfare to pro sports team owners"
Atlantic Yards Report
There's a referendum Monday in tax-strapped Nassau County on a $400 million plan to replace the Nassau Coliseum (and build a minor league ballpark), and you can bet that Barclays Center backers are hoping the whole thing blows up, thus sending events--no, not the main tenant, the hockey Islanders, but concerts and shows--to that new arena rising near the Long Island Rail Road terminal in Brooklyn.
There's reason for question the plan, as I'll describe below, but it's notable how the New York Daily News and New York Post editorial pages, steady backers of Atlantic Yards, have discovered their inner Daniel Goldstein, fervently denouncing the "scheme."
(It's also notable that the public gets a voice decide--though it should be pointed out that a Monday in August is not exactly designed for mass turnout. Neither the public nor local elected officials voted on support for Atlantic Yards. Note that the Nassau County Legislature and then the Nassau Interim Finance Authority would then decide.)
Were the editorial pages just bamboozled by "Jobs, Housing, and Hoops"? Is this "good government" week? Or did someone (Rupert, Mort?) make the call?
Meanwhile, "thousands of union workers, Nassau County officials, hockey fans and Islanders players" held a rally this week, the business community is opposed, the rival teams Devils and Rangers registered their support, and Governor Andrew Cuomo stayed studiously neutral (in contrast with his office's unyielding support for Atlantic Yards, a state project).
...
It's not at all the same funding mechanism as that for the two baseball stadiums in New York City and the Atlantic Yards arena--the questionable but legal use of tax-exempt bonds as PILOTs (payments in lieu of taxes), a magic trick that requires tax-exempt land and diverted phantom taxes.
Nor is the $400 million sought from voters to be used for land purchase and infrastructure, as the nearly $300 million in direct funding (plus much, much more in indirect support) for Atlantic Yards.
Rather, Nassau Coliseum backers want voters to pay for construction--but, unlike with Atlantic Yards and the two stadiums, at least the government would get a percentage of rent.
Posted by steve at 8:15 PM
July 29, 2011
Losing $30M in annual fees shows city whiffed big-time on new Yankee Stadium, Citi Field
NY Daily News
by Juan Gonzalez
Here's a shocker — New York City's park users are getting screwed at the expenses of the Yankees and Mets.
If you want to know why more than 450 city park workers are about to be laid off or why the Parks Department has imposed outrageous fee increases, just take a look at the new Mets and Yankees ballparks.
Deals the Bloomberg administration negotiated in 2006 have stripped some $30 million in annual revenue the Parks Department once generated from Shea Stadium and the old Yankee Stadium.
This is not something City Hall wants you to know. Parks officials only confirmed the revenue loss after the Daily News asked why budget documents showed a dramatic drop in the agency's franchise income since 2008.
...As recently as 2008, the two ballparks represented nearly half of the $51 million in concessions revenue generated by the entire Parks system.
On top of that, the city was taking in an additional $6 million annually from parking fees at Shea and the old Yankee Stadium.
Once the new ballparks opened, all that revenue disappeared - even the parking money.
..."The elected officials who voted for this welfare for rich professional teams should be ashamed of themselves," said Geoffrey Croft, director of New York City Park Advocates.
NoLandGrab: Don't worry. Surely that lost revenue will be made up with the Barclays Center, right?
Posted by eric at 1:00 PM
July 6, 2011
Chargers Say They Don't Have to Pay Rent in Lockout
voiceofsandiego.org
by Andrew Donohue
As if we needed it, here's another reminder of why stadiums and arenas are such a bad deal for taxpayers.
The first stop in our exploration of whether an NFL lockout will cost San Diego taxpayers: figuring out if the Chargers still have to pay rent at Qualcomm Stadium.
There's a clause buried in the city of San Diego's contract with the team that allows it to forgo paying the $2.5 million rent if a "force majeure event" prevents the team from using the stadium.
Force majeure literally means a "superior force" and is an unexpected event, like a natural disaster, war or other "act of God," that would keep a party from living up to its contract.
The National Football League's 32 teams collectively have decided that they need a greater share of the league's revenues and have begun a battle that threatens the upcoming season. It's not entirely unforeseen, either. This labor strife has been simmering for years.
The Chargers say, though, that the lockout is indeed a force majeure.
Here's a little icing on the cake.
Intuitively, losing out on $2.5 million in rent would seem bad. But there are years in which the city actually sends the Chargers more money than it receives from the team because the team gets rent credits for things such as property taxes on skyboxes and compensation for lost ticket sales because of the addition of disabled seating.
NoLandGrab: This sounds like the equivalent of throwing out one's tenants and then using it as an excuse to stop paying the mortgage.
Posted by eric at 10:51 AM
June 23, 2011
New plan to replace Nassau Coliseum touted as a win-win, must be approved by residents, but questions linger
Atlantic Yards Report
So, it looks like the Islanders--who couldn't fit into the Barclays Center, which can't accommodate major league hockey--might get a new arena, according to this press release:
Uniondale, NY - Nassau County Executive Edward P. Mangano today announced an important step in creating a state-of-the-art sports-entertainment destination center at the Hub in Nassau County. Joined by New York Islanders owner Charles Wang, County Executive Mangano announced that the County has reached a lease agreement that retains Long Island’s only major professional sports team in Nassau County through 2045 should residents approve building a new arena at the site of Nassau Veterans Memorial Coliseum. According to an independent economic impact analysis conducted by Camoin Associates, a nationally recognized firm in public and private sector economic development, the agreement will generate $1.2 billion. This revenue will be used to pay off the $350 million in construction costs associated with the new arena, $433 million in debt service payments and provide an additional $403 million for the County to hold the line on property taxes. Furthermore, Camoin Associates estimates the creation of 1,515 new jobs during the arena construction phase and the creation of 3,040 permanent jobs beginning in the first year the arena is operational.
Words of caution
Is this a good deal? Well, Neil deMause of Field of Schemes wrote about this 5/12/11:
So who exactly would be paying off the bonds? As noted above, Mangano wasn't exactly saying. "Revenue from the sales tax generated by the new arena" sure sounds like a STIF [Sales Tax Increment Financing], though, which is an extremely dangerous funding method given that 1) you could just end up cannibalizing existing sales tax receipts and 2) there's always the danger that if the economy slumps, sales tax receipts will go down, and then you end up having to dip into the general fund to make the bond payments. The Nassau Interim Finance Authority, which took over the county's finances in January, seems to agree, issuing a statement that it's "deeply concerned" about the arena plan and its "fiscal implications for the county."
Posted by eric at 11:27 AM
Republicans Support Massive Debt Increase
The Capitol
by Richard Brodsky
The former Assemblyman, noted critic of Yankee Stadium, and surprising Atlantic Yards mute weighs in on Nassau County's plan for a new Nassau Coliseum.
The county has the highest property taxes in the world, is nigh on bankrupt, has a control board running its finances and has a bus system close to shutting down. Therefore, the Republicans who control the county Legislature just approved a referendum to allow the borrowing of $400 million to build a new home for the local ice hockey team, the New York Islanders, to be paid back by those same beleaguered property-tax payers.
This follows another Republican’s successful initiatives to build three new sports facilities with taxpayer money. Mayor Michael Bloomberg structured $10 billion or so worth of deals for the Yankees, the Mets and the Brooklyn Nets. With Republicans like these, who needs Socialists?
The economics of taxpayer-built sports facilities are almost always awful, with taxpayers receiving little or no benefit in return for massive outlays of public dollars.
...What Mangano and his allies have figured out is that the electorate and politicians go slightly nuts when professional sports and government intersect. All the ideological purity and defining political slogans go out the window. There’s a real pattern of distressed and broke governments cutting schools, hospitals and libraries—you name it—but finding the money to build a stadium.
...The real question is whether Nassau voters will drink the same Kool-Aid. In what passes for political strategy, Mangano has scheduled the referendum for August 1, apparently on the theory that there will be little public debate, the press will not pursue the reality of the deal, nobody will be around and a targeted get-out-the-vote effort can muster enough support to pass it.
NoLandGrab: Why are stadium referenda and public hearings ever held in November? That's a rhetorical question.
Posted by eric at 11:11 AM
June 10, 2011
Red Bulls’ Stadium Bonds Sap New Jersey Town as Condominium Visions Vanish
Bloomberg
by Romy Varghese
A cautionary tale from across the Hudson. When will politicians ever learn that arenas and stadiums ≠ economic development?
On a May evening, soccer fans streamed down a Harrison, New Jersey, sidewalk lined with posters depicting cafes and parks that don’t exist. They were headed to the $200 million Red Bull Arena, which rises above warehouses and industrial wreckage that were to become condos for New York City commuters and transform the town.
Harrison predicted that redevelopment revenue would cover its $39 million debt to buy and clean up land under the stadium for the Major League Soccer team owned by Dietrich Mateschitz, billionaire founder of the namesake energy-drink company. Instead, most construction projects haven’t begun. The community, across the Passaic River from Newark with a per- capita income 69 percent of the state average, had its credit rating slashed and is firing police and firefighters.
“The numbers didn’t make any sense; the economics didn’t make any sense,” said George Zoffinger, who criticized the deal in 2006 as president of the New Jersey Sports & Exposition Authority, a state agency that runs sporting and entertainment complexes. “Now the taxpayers are going to pay.”
Larger communities have been stung, too: The recession undermined the finances of stadium deals in Houston and Cincinnati. Harrison, a town of 14,000, spent years wooing a soccer team, only to see its prize become a burden.
...Town officials in December had to borrow $3.1 million -- 21 percent of its municipal tax collections -- to make the debt payment on the 2006 issue, and they anticipate doing so again this December, Moody’s said.
Meanwhile, the New York Red Bulls, whose owner is No. 208 on Forbes magazine’s list of the world’s billionaires, are challenging their taxable status. The team refuses to pay a $1.4 million property levy, according to Moody’s.
To close its $6 million budget gap, Harrison plans to dismiss 17 percent of its police and 29 percent of its firefighters on July 1, according to an e-mail from Town Clerk Paul Zarbetski.
Posted by eric at 10:22 AM
May 21, 2011
The Miscalculations Encouraged By the Fuzzy Math of Subsidies: Yankee Stadium Bonds on Verge of Default- A Case Study
Noticing New York
This article reviews the imminent financial disaster of publicly-subsidized Yankee parking garages and includes a cautionary note regarding Atlantic Yards.
The default is illustrative of a danger everyone should be on guard against when it comes to development through subsidies: Beware of miscalculation because those involved in development are likely to have put away their sharp pencils. Subsidies, generate fuzzy math, fuzzy thinking and they take peoples' eyes off reality and real costs. Those who are expert at working City Hall to finagle subsidies do not necessarily have the same skill sets as those who know how to shave a profit out of the real world, and frequently there is also the danger that their thinking is that if and when they are off on their numbers they will be patching things together at the back end with additional subsidy flows, perhaps with a “too big to fail” argument. That seems to be the case with Atlantic Yards. (The latest about Atlantic Yards fuzzy math was reported upon by Atlantic Yards Report yesterday.)
In the case of Atlantic Yards, say for example with the mega-project’s implausible initial job-projection numbers, fuzzy math is cultivated as a habit to get a foot in the door for what would otherwise have been an unacceptable project. Atlantic Yards' false projection of a ten-year build-out rather than a multi-decade build-out is another example.
Posted by steve at 11:36 PM
May 20, 2011
After Hundreds Of Millions Of Dollars Of Public Subsidies, Barely Used Yankees Parking Garages Face Financial Collapse
Transportation Nation
by Jim O'Grady
The Bronx's All Hallows High School baseball team has been rendered nomadic by the Yankees, having to play all its games on the road. But that's not the half of it. This is a must-read story for those who want to learn how an auto-centric stadium plan has turned into a fiscal and urban-planning fiasco.
The team, like the rest of the neighborhood around Yankee Stadium, is still waiting for promised replacement fields.
But so few Yankee fans are parking at eleven garages and lots around the new stadium that the company managing them may soon default on $237 million in tax exempt bonds used to build them. In an effort to stave off collapse, the garages recently hiked prices to $35 a game. But as of last month, they were two thirds empty on game days.
These guys must have slept through Econ 101. No one's parking here, so we'll raise the price of parking?
According to public documents and two separate analyses, the Bronx Parking Development company owes the city $17 million in back rent and other payments. The city is paying $195 million to replace the parkland it gave to the Yankees. And New York State spent $70 million to build Parking Garage B. That’s where Derek Jeter and his fellow players park, along with VIP ticket holders. The garage is not open to the public, and allows those who use it to enter directly into the stadium.
Bettina Damiani is project director at Good Jobs New York, a government watchdog group. “It doesn’t seem to make sense to publicly subsidize the stadium and also publicly subsidize the parking garages,” she said, adding it isn’t just about the money. “This is about the impact it’s had on an entire generation of kids who have not had access to open public park space the way they did have.”
The new Yankee Stadium is smaller than the old one. But when the team insisted in 2006 that it needed 2,000 extra parking spots, the New York City Industrial Development Agency issued 237 million dollars in tax exempt bonds for an expanded parking system–paving over the neighborhood’s only regulation baseball diamonds to do it.
The Yankees insisted from the beginning that they needed 9,000 parking spots, 2,000 more than before. They even made it a legal condition for not moving out of the Bronx.
...But the MTA tells WNYC that more than 50% of a typical sell-out crowd arrives by train, bus or ferry. Many fans who do drive skip the $35 dollar charge for a spot at a Yankee garage and either park on the street or at cheaper lots in the neighborhood. One local garage advertises on a flyer that says, “Don’t pay 35 dollars.” Its prices start at $15.
Little has changed from 2006 outside the stadium on game days. Traffic cops stand on corners directing the circling cars. By first pitch, every one of the area’s 3,200 curbside spots is filled.
Angel Castillo, a car-owner who lives four blocks from the stadium, sees it all season. “Oh my God, sometimes if I come and the game starts, I gotta wait when the game finished one hour after the game,” he said. “After midnight.”
NoLandGrab: Mayor Bloomberg, Council Speaker Christine Quinn, Yankees management and others responsible for this disaster were egged on in 2006 by discredited "sports economist" Andrew Zimbalist Jr., who wrote then in a New York Times Op-Ed that "all parking revenue would go back to the state and more than pay off the investment."
Related coverage...
ESCHATON, Getting Everything Wrong
Nobody could have predicted rich out of touch assholes would get everything wrong. First, it's New York. Not everybody drives. Second, if you charge $35 for a parking spot people are going to look for cheaper options, even in New York. Third, a big f**k you from the kids whose ball field you took away. Fourth, stop handing taxpayer money to rich assholes, especially if those rich assholes are building unnecessary parking garages in New york City.
Posted by eric at 12:19 PM
May 17, 2011
Company’s Arenas Leave Cities With Big Problems
The New York Times
by Ken Belson
If Karl Marx were around today, he would be calling publicly funded arenas, rather than religion, the "opium of the people." Or at least of the political "leaders" elected by those people.
The plan sounded great during the real estate boom: build a midsize arena, stuff it with sports, music acts and monster trucks and create a centerpiece for the new city center being developed on a dusty mesa here, 20 miles north of downtown Albuquerque.
But trouble started almost from the day the doors of Santa Ana Star Center opened in 2006. Global Entertainment, the company hired to build and manage the arena, failed to book enough events, and the minor league hockey team it recruited folded. Attendance was light because of high ticket prices and the arena’s remote location. Unrealistic sales targets and high turnover among the arena’s staff added to the problems.
The arena, which Global Entertainment said would be profitable in a year, has lost so much money that Rio Rancho has had to spend millions of dollars each year to keep it afloat. The city fired Global Entertainment in 2009 and sued it to recoup hundreds of thousands of dollars in unpaid bills.
A new arena manager has brought in more business, but the losses have continued to mount, eating into the city’s already tight budget and pushing lawmakers to eliminate jobs and cut costs, including asking police officers to buy their own practice ammunition.
NoLandGrab: The "opium of the people" quote is particularly apt, since despite example after example after example of the failure of publicly funded arenas and stadiums to deliver on the promises made about them, politicians and developers and team owners continue to succeed in getting them built on the taxpayer's dime.
We also wonder what Marx would make of the fact that so many failed arenas end up as home to mega-churches.
Posted by eric at 12:53 PM
May 5, 2011
Like, OMG, NJ, a mall is not public infrastructure!!!!!!!!!!!
The Torch
by Nicole Gelinas
This blog focuses on New York. But the new managers of the Xanadu-cum- “American-Dream@Meadowlands” mall project over in Jersey noted helpfully yesterday that “Manhattan can see us.”
OK, then. What Manhattan sees today is an unwise leadership decision on the part of New Jersey Gov. Chris Christie.
Yesterday, Christie officially threw state support behind the resurrection of this long-failed project to build a mega-mall in northern New Jersey.
Having called the unfinished building “the ugliest damn building in New Jersey and perhaps America,” Christie pledged to see the supposedly private-sector project through under new ownership.
To that end, the state will offer $200 million in new financial help.
...If the dozens of other political vanity projects — from sports stadiums to Atlantic Yards to Destiny USA — that came before this one are an indication, the mall will continue to be a boondoggle.
NoLandGrab: This is the same Chris Christie who wouldn't spend NJ taxpayers' money on the badly needed ARC tunnel project. We guess an indoor ski slope is more important than good commuter-rail access.
Posted by eric at 10:14 AM
April 6, 2011
CITYNOTES: Mod Times
The Brooklyn Rail
by Theodore Hamm
A must-read piece on the public funding of sports facilities, and the broken promises that inevitably litter their wake.
Since its inception in 2003, the Atlantic Yards project has experienced many setbacks, but never a shortage of hype. Its initial monumental Frank Gehry design promised to make Downtown Brooklyn another Bilbao; the arena and series of 16 towers would rain manna, not just on the starting squad of the Nets, but on the local black community; and the mantra of “affordable housing” spoke for itself. Such grand plans enabled the developer to rake in more than $300 million in direct public subsidies, and much more in indirect ones, including some seriously sweet deals from the MTA. Now, going on eight years later, a standard fare arena is being built, and we’re facing the frightening prospect that it will be surrounded by modular housing towers.
Whether a prefab high-rise can withstand all of the elements is a question for wind engineers. My focus instead is on what this prepackaged model, microwave-ready and recyclable, suggests about the views of the city’s future held by our leading players. For clues into the present outlook, let’s turn to the not-so-distant past.
In the early 1970s, prior to the ascension of their recently departed figurehead, the Yankees were owned by CBS, and their president was a charismatic fellow named Michael Burke. At the time, the ballclub sought to renovate Yankee Stadium, and wanted the city to help pay the cost. The Giants had already decided to move to Jersey, and there stood a real chance that the Yanks could follow suit. But Burke helped convince Mayor Lindsay, with whom he shared a stylistic affinity, to ante in $24 million in order to keep the Bombers in the Bronx.
It was the first in a series of shakedowns, but it was done with high-minded intent. As Burke told New York magazine in 1972, “What sets a baseball team apart from, say, a dry cleaning business is that because of the peculiar nature of the ball club, you’re a citizen of the city with civic responsibilities. If you have any sense of the city, you have a commitment.” By commitment, Burke was referring to the rejuvenation of the area surrounding the stadium. That same article reported that a Lindsay administration official named Paul Levine had circulated blueprints for how the neighborhood would look by the time renovations were completed in 1976. Presumably those forecasts did not include arson and the other forms of mischief that set the Bronx on fire.
Things didn’t quite go according to plan, of course.
Posted by eric at 11:28 AM
March 31, 2011
In Shadow of Yankee Stadium, 3 Unfinished Ball Fields
The New York Times
by Corey Kilgannon
Boston Red Sox president Larry Lucchino called the Yankees the "evil empire" a few years back. Which makes their enablers in New York City government Darth Vader.
On Thursday, the New York Yankees begin their regular season at Yankee Stadium, a gleaming $1.5 billion behemoth that opened in the Bronx in 2009 as the new home of one of the richest franchises in sports.
But next to the stadium is a lingering eyesore – a protracted construction project that was supposed to have been transformed into three public ball fields months ahead of opening day. Instead, some coaches and neighborhood residents say, it remains a joyless Mudville.
Just as the new stadium was enveloped in controversy, from its financing to its ticket prices, the construction of the three fields has also prompted debate.
The city promised to build the fields, which are starting to take shape directly across 161st Street to the south of the stadium, to replace others that were bulldozed in 2006 to make way for the stadium.
The razed fields, in Macombs Dam Park, were the only regulation baseball diamonds nearby, and were home to neighborhood pickup games and youth leagues, and to teams from schools like All Hallows High School, a parochial institution several blocks away.
“We’ve gone five years now with no ball fields here,” said Sean Sullivan, 55, the principal of All Hallows and a coach of its baseball team, which has spent five years scouring the city for home fields. “They took the parks away from my kids, and now our team is a bunch of gypsies.”
The team, which played part of its 2009 season in Staten Island, is still searching for a site for its league opener on April 7.
The fields were originally to be completed late last year, as the centerpiece of Heritage Field, a 10-acre park where the former Yankee Stadium stood. But the groundbreaking was delayed until last June, and city officials now say the fields will not open until fall 2011.
“They built the new stadium in record time, but building replacement parkland for the community is literally dragging,” said Helen Foster, who represents the neighborhood on the City Council.
...Ms. Foster accused the Yankees of doing little to help local residents in one of the poorest parts of the country. “There’s this perception in this area that the Yankees’ needs come before everyone else’s,” she said.
Posted by eric at 11:14 AM
March 27, 2011
The American Jobs Creation Act, Job Creation That Wasn’t: What Happens When Government Doesn’t Manage Its Programs
Noticing New York
This blog post begins with a review of a federal program that has"jobs creation" in its title, but managed not to create any jobs, but did improve the bottom line of participating corporations . One can't help to think about Atlantic Yards as another example of government-gone-missing when it's time to get public benefits for public resources expended.
In the case of Atlantic Yards we have two levels of AWOL government, each level with its own fictional job creation program that is not fulfilling its ostensible purpose: At the state level the ESDC (the “New York State Urban Development Corporation” doing business as the “New York State Urban Development Corporation”) does not monitor or pay attention to how many jobs are created at the megadevelopment and on the federal level (Congress again neglecting the declared core of a program) we have the non-job-creating EB5 program that we will get to in a minute. Perhaps what mightily facilitates the ease with which the EB-5 program is abused is that it is not known by any formal title, like the American Jobs Creation Act, leaving the New York Times to struggle as it refers to Ratner’s 'enrollment’ of “498 Asian investors” in “an obscure federal program that grants [“sells” is a better word] green cards in exchange for a $500,000 investment in a job-producing American project,” thereby stumbling compliantly into having referred to `job-production’ which is, as discussed, actually nonexistent.
As for ESDC, it pushed through Ratner’s net-loss-to-the-public basketball arena (now the Ratner/Prokhorov arena) with the unsound idea that even if public money would be lost on it, at least jobs would be created. But there are numerous problems with the idea that ESDC or the government is on the case in this regard:
ESDC doesn’t have a place to start from in tracking jobs, since all the job creation figures bandied about to promote the project were insanely phony to begin with.
ESDC doesn’t itself actively keep track of or monitor job creation. When stories surface about the number of jobs being created (or lack thereof) it is Forest City Ratner that is supplying the figures.
The actual jobs, to the extent that they can be detected, are much lower than (expected?- NO) originally bruited. Very low indeed.
Ratner is doing what he can to keep employment resulting from the megadevelopment at a minimum, particularly union employment, including through the use of untested modular construction.
The role of government to monitor and administer its own job creation programs really oughtn’t be delegated by abdication as, for instance, to the CBA (so-called “Community Benefits Agreement”). Rather, to the extent that this is what ESDC did with Atlantic Yards, Forest City Ratner has actively gone out of its way to avoid hiring an Independent Compliance Monitor as called for by the CBA.
To the extent that any part of the provision of jobs is meant to be related to the provision of minority jobs, the responsibility for tracking that remains in the hands of someone Ratner hired, Darrle E. Greene, best known for being indicted for (and ultimately having to make restitution for) falsifying numbers he was submitting to government. When the disgraced Greene was found to be involved in the Aqueduct Raceway scandal (involving multiple parallels to Atlantic Yards) Greene was forced to withdraw from the Aqueduct transaction but he is still around for Atlantic Yards.
Posted by steve at 8:55 PM
March 12, 2011
Sports costing taxpayers billions
NewJerseyNewsroom.com
by Evan Weiner
Evan Weiner takes a look at America's bottomless stadium sinkhole.
As National Football League Commissioner Roger Goodell and his owner team personnel continue bargaining with National Football League Players Association Executive Director DeMaurice Smith to reach a new agreement that covers players working conditions, New Jersey Governor Chris Christie wrestles with his state's budget and the possible layoffs of government workers and still has one budget item that will not go away. New Jersey still owes about one hundred million dollars on a facility that no longer exists — Giants Stadium.
More than 100 days from now, National Basketball Association Commissioner could announce that NBA owners have voted to lockout their employees — NBA players — because the owners and the players could not reach a new collective bargaining agreement. NBA owners claim they are losing copious amounts of money yet in Manhattan, the owner of Madison Square Garden (Cablevision's James Dolan) is pocketing money from his regional cable TV network and sellout crowds at Knicks games and not paying some $13-14 million annually in property taxes on a prime piece of real estate between 31st and 33rd Streets and Seventh and Eighth Avenue. Dolan is paying two players more than $20 million a year each (Amar'e Stoudemire and Carmelo Anthony) which suggests he has the means to pay the taxes.
In cash strapped New York City where Mayor Michael Bloomberg has declared war on teachers’ tenure and salaries and New York State where Governor Andrew Cuomo has promised that he will change the way Albany does business and cut expenses, there is no stomach to put the Garden back on the tax roll. Some of those Knicks fans who love STAT (Stoudemire) and Melo (Anthony) may be out of jobs but as long as the team gets tax breaks that seems to be okay with the fans. The more tax breaks, the more money that can be spend on a player.
New York has laid out hundreds of millions of dollars for infrastructure at the new Yankees and Mets stadiums as well as giving the two franchises many tax breaks and incentives. Former New Jersey Nets owner Bruce Ratner has gotten a slew of tax breaks and incentives to build a Brooklyn arena. New York City Mayor Rudy Giuliani built the two most expensive minor league baseball stadiums ever in Brooklyn in Coney Island and on the Staten Island waterfront.
Posted by eric at 12:04 AM
March 11, 2011
A year after the ceremonial groundbreaking for the arena: Where's the affordable housing? The other promised benefits? The Carlton Avenue Bridge?
Atlantic Yards Report
A year after the ceremonial groundbreaking (coverage, columns) for the Atlantic Yards arena, what have we?
Yes, Forest City Ratner can invite their useful enablers, like Daily News columnist Denis Hamill and Nets Daily's "Net Income," to the top of the Atlantic Center to cast their appreciative eyes on an arena rising. And a sports fan blogger can chronicle the construction.
Barclays Capital, thanks to naming rights the state gave away, can use the arena as a giant billboard, helped by a good deal for branding the adjacent subway and rail station.
Mikhail Prokhorov, the Nets' majority owner, can bask in his newfound global profile, enabled by the myopic media.
What about the benefits?
But what about the rest of the project and all the promised community benefits, the justification for city and state subsidies, and override of zoning, and other special assistance?
The first tower is delayed, despite promises from the developer and happy talk from the city.
The job numbers are far smaller than promised--last month, 150 workers were reported by FCR to be at the site.
Projected tax revenues? Inevitably well below estimates, given delays in the project, especially the office tower, Building 1.
The open space? Well, they'll make a temporary plaza on the arena block instead of Building 1 and the Urban Room.
The Carlton Avenue Bridge? Forest City Ratner, rather than come up with $14 million on its own, wanted state taxpayers to put up $9 million.
The timetable? Bruce Ratner, who in May 2008 insisted that "We anticipate finishing all of Atlantic Yards by 2018," asserted last September that a decade was "never supposed to be the time we were supposed to build them in.”
NoLandGrab: To paraphrase a recently indicted, disgraced, Atlantic Yards-boosting politician, "f*ck the affordable housing, f*ck the other promised benefits, f*ck the bridge. And f*ck the public!
Posted by eric at 11:49 PM
March 6, 2011
Atlantic Yards and "great unbuilt stadiums" (and the "same site" error)
Atlantic Yards Report
There's a certain Frank Gehry Brooklyn arena missing from Slate's If You Don't Build It … A slide-show essay on Seattle's floating dome, Edmonton's Omniplex, and other great unbuilt stadiums.
Still, it's worth a read:
While the stadiums we erect can embody both civic pride and civic catastrophe, unbuilt stadiums reflect our ambitions and our shortcomings more brightly. The ballparks we imagine, design, and fail to see through to completion are testaments to our egos, our metropolitan insecurities, our ever-changing sense of aesthetics, and our growing economic expectations.
I'd say that thinking an arena could be wrapped in four towers housing 10,000 office jobs was a tad overoptimistic.
Getting AY wrong
Unfortunately, the slide show has an incorrect reference to Atlantic Yards:
O'Malley had been hoping to secure land for a privately built stadium at the Brooklyn site now known as Atlantic Yards (currently home of a modern, divisive stadium project).
It's not the same site.
Posted by steve at 10:20 PM
March 3, 2011
Did Barclays do the Nets a favor in buying naming rights, or was the favor from New York State, which gave the rights away?
Atlantic Yards Report
The Nets are in London as part of the NBA's (and their) march toward world branding.
In Nets Repay Barclays for the Favor, Nets Daily blogger Net Income (aka "the Leni Riefenstahl of the New Jersey Nets") has an exclusive:
This much is indisputable about the Nets' move to Brooklyn: If Barclays hadn't agreed to a $400 million naming rights deal in 2007, the arena now known as Barclays Center would never have been built. It was the critical commitment at the critical time for the Nets. Without it, the whole effort would have lacked credibility.
So dressed in suits and ties (Jordan Farmar and Johan Petro wore bow ties), Nets players and Avery Johnson spent part of their first day in London at a presentation to some 300 Barclays Capital executives and employees Wednesday. It was the first team event, other than a photo at the London Tower Bridge.
The "favor" did not come from Barclays.
Barclays made an investment, from its advertising budget. (You could argue that American taxpayers sure helped.)
The favor came from the state of New York, which gave away naming rights, and then neglected to count that gift as a subsidy.
And, of course, what was announced as a $400 million deal was cut significantly, after two renegotiations nearly in half.
Posted by eric at 11:23 AM
March 2, 2011
In Edmonton, at least, Atlantic Yards haunts Andrew Zimbalist
Atlantic Yards Report
Somehow my critique of sports economist Andrew Zimbalist's contradictions is getting taken seriously in Edmonton, Alberta.
Related coverage...
Edmonton Journal, Sports economist Zimbalist under attack for his shifting views on arena building
In an interview with the Journal's Gary Lamphier, Zimbalist made it clear he's no fan of the Community Revitalization Levy mechanism (which is proposed in Edmonton) as a way to generate public funding for arenas or stadiums. Too often, he told Lamphier, CRLs fail to live up to initial forecasts.
Zimbalist also liked to see solid commitments from developers before a project proceeds, not just vague promises. Zimbalist also challenged Katz's argument that the Oilers' financial viability depended on a new arena. "Citing Forbes magazine's annual survey of NHL franchises -- the only source of public information available -- Zimbalist said the team ranked among the most profitable in a league where half the 30 clubs are mired in red ink," Lamphier wrote.
Lamphier's article caught the attention of gadfly Norman Oder, who has been keeping a close eye on the multi-year attempt to build a new arena at the Atlantic Yards in Brooklyn.
Oder wrote on his blog, Atlantic Yards Report, that the somewhat pessimistic and definitely tough-talking position that Zimbalist took in Edmonton with Katz is in conflict with the much more optimistic view that Zimbalist took when he was hired by the Brooklyn arena developer, Bruce Ratner, to do a feasability study.
NoLandGrab: Guess it all depends upon who's signing Mr. Zimbalist's paycheck.
Posted by eric at 12:39 PM
February 27, 2011
Everyone is getting a break because who can afford to pay retail on taxes?
Daily News
by Adam Lisberg
It's no surprise that developer Bruce Ratner, via his Atlantic Yards project, can be seen feeding heartily from the public trough.
Nobody pays retail in New York, right?
That's true for the city's buildings, too.
Every one of the biggest new private construction projects in New York is helped along by some sort of public subsidy.
The World Trade Center floats on a sea of tax-free subsidized bonds and taxpayer-funded infrastructure. Same with the Barclays Arena under construction at Brooklyn's Atlantic Yards.
...
"These days, a publicly subsidized project doesn't necessarily equate to a large public benefit," said Bettina Damiani of the watchdog group Good Jobs New York, which is still smarting from the giveaways for the new Yankee Stadium.
Related coverage...
Atlantic Yards Report, Everyone's getting tax breaks, says Daily News columnist, who neglects the ironies of the free-market Bloomberg administration
Daily News columnist Adam Lisberg, in Everyone is getting a break because who can afford to pay retail on taxes?, points out some ironies:
...
But he doesn't go far enough. After all, it's Mayor Mike Bloomberg who regularly invokes the free market when talking about the sports industry or the entrance of Wal-Mart.
Instead, Lisberg lets an apologist speak:
"If it was a more rational level of taxes, we wouldn't need it," said Steven Spinola, head of the Real Estate Board of New York.
Posted by steve at 6:39 PM
February 21, 2011
Jesse Jackson, 1996: "Between these mountains of the ball parks and the jails was once Campbell's Soup and Sears and Zenith... and stockyards."
Atlantic Yards Report
Once upon a time, before developers muddied up sports facility projects with mixed-use add-ons that might or might not deliver jobs and taxes and publicly-accessible open space, such projects could be seen plain.
Consider the Rev. Jesse Jackson's stirring 8/27/96 speech at the Democratic National Convention in Chicago. The prepared text was amplified and amended in the remarks as delivered; Jackson, among other things, went off on stadiums and called--15 years before it became more mainstream--for investment in infrastructure.
As Michael Lewis explains in his book Losers: The Road To Everyplace but the White House, Jackson abandoned his notes and became the only speaker to fully engage the crowed, addressing the issue nearly everybody had ignored: economic justice.
Sports facilities as mountain tops
Jackson said, in part:
The Republicans in San Diego put forward the image, the vision of a big tent. On the cover was Gen. Powell and Jack Kemp. But clearly you cannot judge a book by its cover. For inside the book was written by Newt Gingrich and Ralph Reed and Pat Buchanan, all the rights that made Gen. Powell possible are now under assault for the next generation and all that Kemp believed in until last week is now under assault.
What is our challenge tonight? Just look around this place. This publicly financed United Center is a new Chicago mountain top. To the south, Comiskey Park, another mountain top.
To the west, Cook County jail. Two ball parks a jail. That jail, mostly youthful inmates 80 percent drug-positive, 90 percent high school dropouts, 92 percent functionally illiterate, 75 percent recidivist rate. They go back sicker and slicker.
Between these mountains of the ball parks and the jails was once Campbell's Soup and Sears and Zenith and Sunbeam and stockyards. There were jobs and there was industry; now there's a canyon of welfare and despair. This canyon exists in virtually every city in America. One-tenth of all American children will go to bed in poverty tonight. Half of all America's African-American children grow up amidst broken sidewalks, broken hearts, broken cities and broken dreams. The number-one growth industry in urban America -- jail. Half of all public housing built to last 10 years. Jails. The top wealthiest 1 percent wealthiest Americans own as much as the bottom 95 percent -- the great inequality since the 1920s. As corporations downsize jobs, outsource contracts, scab on workers' rights, a class crisis emerges as a race problem. But the strawberry pickers in California, the chicken workers in North Carolina deserve a hearing. We must seek a new moral center.
And today?
This new moral center does not come, as the Rev. Al Sharpton suggested last March at the Atlantic Yards groundbreaking, via fractional team ownership by one very rich celebrity.
"I'm glad I lived to see the color line in ownership broken in Brooklyn, where we've gone from Jackie to Jay-Z, where we can not only play the game but we can own a piece of the game," Sharpton asserted. "So my mother saw Jackie and my daughters will see Jay-Z--we have come a long way."
Sharpton was wrong not just on theory but on facts: the majority owner of the Charlotte Bobcats when it was established in 2002 was Robert L. Johnson, founder of Black Entertainment Television.
Posted by eric at 9:16 AM
February 16, 2011
Sports territorial rights put Newark, Brooklyn and the N.Y. Islanders at a disadvantage
NewJerseyNewsroom.com
by Evan Weiner
An interesting perspective on the business of sports, especially as it pertains to the New York metropolitan area.
When Mikhail Prokhorov arrives in Brooklyn with his New Jersey Nets franchise, can he bring with him a National Hockey League team — specifically the New York Islanders? The answer according to someone who has been around hockey for a long time is no because the Madison Square Garden's owners, the Dolan family, and the league won't allow Charles Wang's Islanders to invade New York Rangers territory.
...NHL Commissioner Gary Bettman has thrown water on the idea that Wang's Islanders could move about 20 miles west of the franchise's present location in Uniondale. The NHL does have the right to control franchises shifts as does the National Basketball Association according to the latest court case (the 2009 Phoenix Coyotes bankruptcy proceedings in Judge Redfield Baum's courtroom in Phoenix) involving a league and that league's ability to control franchise shifts. In 1994, NBA Commissioner David Stern and the majority of the league's 27 owners blocked the sale of the Minnesota Timberwolves to New Orleans interests led by boxing promoter Bob Arum. The Arum group planned to move the Minneapolis franchise to New Orleans.
New Jersey Governor Chris Christie has already met with Stern to discuss the possibility of replacing Prokhorov's Newark-based franchise with another NBA team. It is hard to imagine Stern warming up to the idea of putting a third team in the New York metropolitan area although ultimately it is the NBA owners, not Stern, that decides where a franchise can operate.
...American sports is not a private entity.
It is a government-subsidized business. Cities are building stadiums and arenas for teams and in some cases paying owners outright to make sure the owner keeps a franchise in town like Louisiana does with New Orleans Saints owner Tom Benson. The "major league" sports industry has grown financially thanks to antitrust exemptions and all sorts of tax breaks for owners.
NoLandGrab: Just a couple quibbles. First, the arena would have to be substantially retrofitted to accommodate professional ice hockey, and given the Bruce's money woes, that's not likely to happen any time soon. Second, many Brooklynites would have been much happier if the Dolan's had had a kill button for the Nets, too.
Posted by eric at 10:54 AM
January 25, 2011
Dave Zirin on the Green Bay Packers and the road not taken in professional sports
Atlantic Yards Report
Edge of Sports columnist Dave Zirin is now blogging for The New Yorker, and his first piece, Those Non-Profit Packers, reminds us of the the way professional sports didn't go, toward non-profit ownership, with the unique example of the Green Bay Packers:
In 1923, the Packers were just another hardscrabble team on the brink of bankruptcy. Rather than fold they decided to sell shares to the community, with fans each throwing down a couple of dollars to keep the team afloat. That humble frozen seed has since blossomed into a situation wherein more than a hundred thousand stockholders own more than four million shares of a perennial playoff contender... Shareholders receive no dividend check and no free tickets to Lambeau Field.
....The Packers’ unique setup has created a relationship between team and community unlike any in the N.F.L. Wisconsin fans get to enjoy the team with the confidence that their owner won’t threaten to move to Los Angeles unless the team gets a new mega-dome. Volunteers work concessions, with sixty per cent of the proceeds going to local charities. Even the beer is cheaper than at a typical N.F.L. stadium.
And while a member of the Packers board thinks costs today would make it tough to duplicate the ownership structure, even if the N.F.L. allowed it, Zirin sees a counterargument:
It may be exorbitantly expensive to run a team, but people don’t buy N.F.L. teams as a civic service. Being an N.F.L. owner is like having a license to print money... In the United States, we socialize the debt of sports and privatize the profits.
NoLandGrab: "Socialize the debt... and privatize the profits?" Why, that's the same business model as real estate development.
Posted by eric at 4:11 PM
January 6, 2011
Teams and Owners Find Public Money Harder to Come By
The New York Times
by Ken Belson
Amazing! Ken Belson, who frequently covers the Nets for The Times, manages to write a news-analysis piece on the public funding of sports facilities that doesn't mention the Nets or Atlantic Yards. The article does, however, mention the Yankees, Mets, Giants, Jets and Red Bulls, none of which are owned by the developer of The Times's headquarters building, aka Nets' minority owner, Atlantic Yards developer and corporate-welfare queen Bruce C. Ratner.
The sports world is littered with examples of governments spending hundreds of millions of dollars to host the World Cup or Olympics or to help build stadiums and arenas for privately owned home teams.
But the tide may be turning, ever so slightly. In the last few years, owners of the Mets and the Yankees in New York, the Jets, the Giants and the Red Bulls in New Jersey and the Cowboys in Texas built stadiums that they financed primarily themselves. Last week, San Francisco was chosen to host the next America’s Cup even though the city had no money to offer the race organizers.
The question for economists, fiscal hawks and even Tea Party activists who oppose public subsidies for professional sports is whether these examples represent a growing resistance or are exceptions to the rule. The answer is a little bit of both.
Cities that are short of cash can no longer afford to build stadiums, which is why teams in Sacramento, San Diego and San Francisco have struggled to win support for public subsidies.
Really? Nobody told New York City.
“I would like to be hopeful about the end of subsidies, but I’m not,” said Dennis Coates, who teaches sports economics at the University of Maryland-Baltimore County. “The bottom line is, no matter how often the public sector says no, the people who want to build a facility will come back to that well because no is not permanent, but yes is.”
Coates and other economists note that while voters are increasingly reluctant to shoulder the entire cost of new stadiums, politicians are finding new ways to keep their home teams happy, either by providing land, paying for parking structures, public transportation and access roads, and offering tax breaks.
Posted by eric at 11:34 AM
December 28, 2010
Brodsky, in final report, warns of importance of further public authorities reform, "failure to receive value for investments," doesn't mention AY
Atlantic Yards Report
AYR remains the only source of Atlantic Yards news that has dug out from under the snow.
Departing Westchester Assemblyman Richard Brodsky, the crusader for public authority reform who focused on the new Yankee Stadium rather than the Atlantic Yards project, has left with a valedictory report warning of the need for further reform, including this common-sense statement, "In an era when government is instructed to behave more like business, the failure to receive value for its investments is a crisis that can no longer be ignored."
Unmentioned in the six-page report (embedded below) is Atlantic Yards, nor the state's failure to receive any value for giving away arena naming rights.
Indeed, "the massive transfer of public property into private hands... not... accompanied by commensurate public benefits" hints at Yankee Stadium ("publicly funded sports facilities by IDA's") and the Columbia University expansion ("university construction using eminent domain powers") but not the equally controversial Atlantic Yards.
But Brodsky, who ran unsuccessfully for Attorney General, does get the politics:
To be sure, the rhetoric of job creation and economic development is powerfully expressed by elected officials, authority leaders and private sector beneficiaries of these transfers. But in the end the State has failed to protect its assets and interests.
And the issues he cites in the report, including added staff and increased power for oversight (the need for which I've previously reported), remain basic. Brodsky told City Hall News the future if very much up in the air:
Ultimately, ensuring that PARA is enforced is up to everyone in state government, he said, not just one legislative chamber or one governor.
“Everyone, the speaker, the new chair, the members, the governor, the comptroller. This is real and big and it has enemies,” Brodsky said. “Everyone is on the hook.”
Posted by eric at 9:57 AM
November 8, 2010
NBA's Financial Situation: David Stern's Conflicting Message About the Thunder
Bleacher Report
by Phil Caldwell
After hearing David Stern’s rhetoric this past summer, perhaps Seattle’s barren professional basketball scene might soon be shared by another 32 cities? This past July, the hated commissioner claimed the NBA was losing “huge amounts of money” and put the number in the $350 to $400 million range for the 2009-10 season alone.
If that is anywhere close to truth, perhaps Seattle ought to be celebrating escaping this mess, rather than mourning their lost franchise?
Stern has an impossible, conflicting task this year. While trying to convince skeptical city council members across the nation to pony up hundreds of millions to replace arenas barely two decades-old, he’s also pleading poverty in an effort to lower the NBA players' salary structure.
Sources confirm the poverty argument, listing that the teams losing money include Atlanta, Memphis, Detroit, Miami, Orlando, New Orleans, Oklahoma City, Indiana, New Jersey, Minnesota, Charlotte, Milwaukee and Philadelphia—news that makes Seattle and Vancouver fans a bit gleeful.
Build new billion-dollar arenas using public taxpayer money for a league that is losing hundreds of millions? How does this make sense?
NoLandGrab: Why, that's a good question. One way around having to answer is by circumventing the city council via a state override, since New York's state government — and its courts — seem to be plenty gullible.
Posted by eric at 10:07 AM
September 28, 2010
Sports debate between Zirin ("The socializing of debt and the privatizing of profit") and Leitch ("I know I am willfully putting on blinders")
Atlantic Yards Report
Norman Oder relates an interesting debate between two sportswriters at the recent Brooklyn Book Festival.
"It makes no sense to be a sports fan," says Will Leitch, founder of the influential sports blog Deadspin and now a contributing editor to New York magazine. "It's kind of dumb that we do it, but we do it, because it's awesome."
Leitch said that at the Brooklyn Book Festival on September 12, and his take on sports--savvy and clever, but willfully divorced from any overarching politics--deserves notice, because it's far more prevalent than that of fellow panelists Dave Zirin, who writes about the politics of sports for The Nation and his syndicated Edge of Sports column.
And Leitch and Zirin got into a forceful but friendly disagreement about that overarching frame.
..."The problem is that Bruce Ratner is following a template which unfortunately we know the answer to," Zirin continued. "There used to be a time ten years ago when you would debate this question of public stadium funding... and there would be dueling opinions, one side saying they bring a benefit . This cannot be seen as a debate anymore ."
(The subsidies for the New York arena and stadium deals are more subtle than in other states, but still substantial.)
Zirin said sports facilities serve "like neoliberal Trojan horses," gaining subsidies even as local leaders neglect infrastructure.
"We're talking about very real choices," he said. " Ralph Nader says you better turn on politics or politics turns on you . I feel, as a sports fan, we better turn on sports, or sports are going to turn on us with an absolute vengeance ."
...Leitch acknowledged that fandom is illogical and said he agreed with most of the "vast majority" of Zirin's take.
But not all.
"There are so few things in the world that are black and white," he said. "If you win you're happy; if you lose you’re sad. Everything else is gray. Sports is the one thing that I have. I know that everything that goes into it is gray, but for three hours, if they win, I'm happy, if they lose I'm sad. That's something I want to protect."
"I know I am willfully putting on blinders," Leitch said. "I'm fully aware of that... but, sorry, life's hard enough, give me sports."
"Because I love sports," Zirin responded, "I don't want to be affected by a lot of the racism, sexism, homophobia, hyper-corporatism... we have an obligation to fight for sports." He suggested that, despite the offensiveness of the team name Washington Redskins, "you let it go because it's sports."
He also suggested that the economy of sports has changed drastically. However hated Dodger owner Walter O'Malley was, Zirin noted, he made money from fans buying tickets (and, I'd say, television).
Now, said Zirin, "we're scenery. Now it's public funding of stadiums, personalized seat licenses, sweetheart cable deals, corporate sponsorships."
NoLandGrab: And don't forget eminent domain abuse.
Posted by eric at 11:33 AM
September 25, 2010
Sport Culture Capper: Yankees, Professional Sports and Criminals Wearing Yankee Hats
Noticing New York
This blog entry uses a New York Times story as a jumping-off spot. The story is about how many criminals are wearing Yankees garb.
I don’t usually pay much attention to the world of sports fan culture when I analyze the urban planning concerns of locating huge stadia in the middle of the urban fabric or complain about the unfairness of how these private profit-making enterprises are being financed on the backs of all of the rest of us, but I have an irresistible temptation to write about the subject now and before I’m through maybe I will have made clear why I personally am not much of a professional sports fan. . . .
. . . . Did everyone catch the story on the front page of the New York Times last week about how New York Yankee caps and baseball jackets seem to have become the apparel of preference for the city’s criminal element?:
A curious phenomenon has emerged at the intersection of fashion, sports and crime: dozens of men and women who have robbed, beaten, stabbed and shot at their fellow New Yorkers have done so while wearing Yankees caps or clothing.
...
Somehow it did not seem so surprising to our Noticing New York sensibility that predatory criminals, the bank robbers and thieves written about in the article, should identify with the Yankees who along with their owners have turned professionalized theft from the community into a business. While the recent new stadia including Yankee Stadium have fewer seats (to boost prices) the Yankee Stadium is actually bigger than the old in order to suck up “inside the cloister of its privately-owned walls the economic activity that once upon a time existed in the surrounding Bronx community.” (See: Saturday, November 14, 2009, The Yankee’s Hoggish New Stadium Monopoly Taxes The Rest of Us.) As reported by WNYC, and what we wrote in that story, the new Yankee Stadium includes: “a `mega-mall’ that is in decimating competition with local merchants taking away the business that used to be theirs.”
Read the rest of the post to why it makes a kind of sense for criminals to emulate owners of sports franchises. There is also a critique of sports fan culture and why fans might channel their energies more constructively and keep from becoming antisocial.
Posted by steve at 7:50 AM
September 12, 2010
Yankees parking garages nearing default on bonds
Field of Schemes
The publicly-subsidized parking garages for the new Yankee Stadium are losing money. This is an example why claims like the $6 billion lie for the Atlantic Yards project need to be examined closely so that government doesn't give away taxpayer money while receiving no public benefit.
When New York Daily News columnist Juan Gonzalez reported back in June that the parking garages at the new Yankee Stadium were losing money and could cause the garage operator to skip rent payments to the city, city Economic Development Corporation spokesperson David Lombino wrote to Gonzalez (and to me):
When the bonds were issued, an independent analysis found that typical parking demand would eventually generate enough revenue to cover bond expenses, rent and PILOT. Last year, occupancy was lower than the analysis predicted. As the economy improves, we can expect that occupancy would improve. So far this year, there are more vehicles using the parking lots (through April), and if occupancy returns to typical historical levels in line with the independent analysis, revenues will increase and based on these assumptions the lots will generate enough revenue to cover bond expenses, and to begin paying rent and PILOT. That could be as soon as this year.
Or not. Gonzalez writes in today's News that the garages are on the verge of defaulting on their bonds, with the nonprofit Bronx Parking Development warning bondholders that it has "insufficient funds" to make a $6.8 million payment due October 1. The problem: Too many Yankees fans are taking the train to the game, or parking at the nearby Gateway Center mall where rates are much cheaper.
Posted by steve at 10:48 AM
September 9, 2010
Sports facilities win as libraries lose: Times columnist points to New Jersey, but the case is even stronger in New York City
Atlantic Yards Report
Following up on some tough coverage of how stadiums in New Jersey soak taxpayers, New York Times sports columnist George Vecsey today points out the parlous state of Camden libraries, which will be closed now on Fridays.
He writes:
Obviously, there is no direct economic link between stadiums new and vanished and libraries shuttered or unshuttered. But the cost of extravagant new stadiums all over the country suggests a skewed sense of priorities in all of us.
Bringing it home
Um, actually, there is a link. Right here in New York City.
Mayor Mike Bloomberg wanted to cut libraries by, oh, about $75 million. Most of that proposal was scaled back to "only" about $15 million, so five-day service was "saved," which is another way of saying a day of service was lost.
The city gave $100 million in direct subsidies for Atlantic Yards, then added $105 million, and since has said--though it's questionable--that the total is under $180 million.
Either way, that's money that could have gone to libraries (unlike in New Jersey, where Camden libraries rely mainly on city, not state funds).
Posted by eric at 11:46 PM
September 8, 2010
As Stadiums Vanish, Their Debt Lives On
The New York Times
by Ken Belson
Shocker! The Times discovers that stadiums are a money-suck for taxpayers. Double-shocker! They focus on New Jersey, with nary a mention of business-partner Bruce Ratner's super-colossally expensive basketball palace.
It’s the gift that keeps on taking. The old Giants Stadium, demolished to make way for New Meadowlands Stadium, still carries about $110 million in debt, or nearly $13 for every New Jersey resident, even though it is now a parking lot.
The financial hole was dug over decades by politicians who passed along the cost of building and fixing the stadium, and it is getting deeper. With the razing of the old stadium and the Giants and the Jets moving into their splashy new home next door, a big source of revenue to pay down the debt has shriveled.
New Jerseyans are hardly alone in paying for stadiums that no longer exist. Residents of Seattle’s King County owe more than $80 million for the Kingdome, which was razed in 2000. The story has been similar in Indianapolis and Philadelphia. In Houston, Kansas City, Mo., Memphis and Pittsburgh, residents are paying for stadiums and arenas that were abandoned by the teams they were built for.
...How municipalities acquire so much debt on buildings that have been torn down or are underused illustrates the excesses of publicly financed stadiums and the almost mystical sway professional sports teams have over politicians, voters and fans.
Rather than confront teams, they have often buckled when owners — usually threatening to move — have demanded that the public pay for new suites, parking or arenas and stadiums.
...With more than four decades of evidence to back them up, economists almost uniformly agree that publicly financed stadiums rarely pay for themselves. The notable successes like Camden Yards in Baltimore often involve dedicated taxes or large infusions of private money. Even then, using one tax to finance a stadium can often steer spending away from other, perhaps worthier, projects.
Unless those economists, like Andrew Zimbalist, are paid by the developer.
“Stadiums are sold as enormous draws for events, but the economics are clear that they aren’t helping,” said Andrew Moylan, the director of government affairs at the National Taxpayers Union. “It’s another way to add insult to injury for taxpayers.”
Related coverage...
Atlantic Yards Report, Times continues tough scrutiny of stadium deals in... New Jersey
The article doesn't mention Atlantic Yards, or the new baseball stadiums. However, even if they don't have taxpayers on the hook for bonds, they have significant infrastructure and land subsidies--about $300 million in direct subsidies for the arena--and highly questionable bond financing schemes, in which PILOTs are used to pay off the debt, relying significantly on federal tax breaks.
Indeed, the combination of subsidies and tax breaks, including $194 million in federal tax breaks on tax-exempt bonds, added up to what the New York City Independent Budget Office (IBO) calculated (using somewhat higher estimates for the total bond deal) as $726 million in savings on the arena for developer Forest City Ratner.
And that's without assuming--as did Assemblyman Richard Brodsky, in the case of the new Yankee Stadium--that the use of PILOTs to pay for a sports facility constitutes a full subsidy in itself.
...And, unmentioned in the article, the state in the case of the Brooklyn arena simply gave away naming rights, another subsidy (worth more than $200 million) that even the IBO didn't calculate.
Field of Schemes, Times fumbles ball on Giants Stadium debt
Neil deMause weighs in on the problems with The Times's conclusions.
Whether the debt on an old stadium is paid off before it's demolished doesn't matter one whit. While "Whattaya mean, we're still paying for that pile of rubble?!?" is a natural reaction, it doesn't make much economic sense. Stadium debt is, when you come down to it, a bookkeeping measure — the construction expense is sunk the moment you sign the contract to build the thing. The rest is just a matter of (in a manner of speaking) what kind of mortgage your municipality wants to take out.
If the state of New Jersey had chosen to pay off Giants Stadium by selling 20-year bonds, in other words, it still would have represented the same expense to the public — but since the bonds would have been retired faster, suddenly it wouldn't make Belson's hall of shame. That's nonsensical. If cities shifted to paying for their stadiums with suitcases full of twenties, would that make them better deals?
...The real scandal here isn't how debt service is financed, but rather that cities and states are tearing down perfectly functional stadiums just so that teams can stop paying rent, costing taxpayers millions. Now there's a headline I'd like to see in the Times.
Posted by eric at 11:36 AM
August 26, 2010
Marlins’ profits came at taxpayer expense
Yahoo! Sports
by Jeff Passan
Shocker! The owners of a professional sports team actually lied about their financial situation while bilking the taxpayers for a new stadium! Here's a must-read about the great pro sports swindle.
The swindlers who run the Florida Marlins got exposed Monday. They are as bad as anyone on Wall Street, scheming, misleading and ultimately sticking taxpayers with a multibillion-dollar tab. Corporate fraud is alive and well in Major League Baseball.
A look at the leak of the Marlins’ financial information to Deadspin confirmed the long-held belief that the team takes a healthy chunk of MLB-distributed money for profit. Owner Jeffrey Loria and president David Samson for years have contended the Marlins break even financially, the centerpiece fiscal argument that resulted in local governments gifting them a new stadium that will cost generations of taxpayers an estimated $2.4 billion. They said they had no money to do it alone and intimated they would have to move the team without public assistance.
In fact, documents show, the Marlins could have paid for a significant amount of the new stadium’s construction themselves and still turned an annual operating profit. Instead, they cried poor to con feckless politicians that sold out their constituents.
The ugliness of the Marlins’ ballpark situation is already apparent, and the building doesn’t open for another 18 months. Somehow a team that listed its operating income as a healthy $37.8 million in 2008 alone swung a deal in which it would pay only $155 million of the $634 million stadium complex. Meanwhile, Miami-Dade County agreed – without the consent of taxpayers – to take $409 million in loans loaded with balloon payments and long grace periods. By 2049, when the debt is due, the county will have paid billions.
Most harrowing is the takeaway that baseball’s biggest welfare case could have funded a much greater portion of the ballpark. In 2009, when the Marlins started spending some of their profits on their portion of the stadium, they still had an operating income of $11.1 million. The team fought to conceal the $48.9 million in profits over the last two years because the revelation would have prompted county commissioners to insist the team provide more funding. Loria, an art dealer with a net worth of hundreds of millions, wouldn’t stand for that. He wanted as much public funding as possible – money that could’ve gone toward education or to save some of the 1,200 jobs the county is cutting this year.
...“It’s not that teams need new stadiums, either,” said Neil deMause, whose book “Field of Schemes” blew the lid off ballpark boondoggles. “They need new revenues. It’s really just a bailout. It would be cheaper to just give the teams the money. But then it would just look like a handout. The stadiums have become part of the business model for teams.”
Not nearly enough credit goes to the proliferation of new stadiums for turning the game into a $6 billion-plus business. In case after case, teams built stadiums with a majority of the funding from public sources and today keep nearly all of the profits generated from games.
Posted by eric at 10:12 AM
July 14, 2010
On Steinbrenner memories and Yankee Stadium subsidies
Atlantic Yards Report
Norman Oder looks at media coverage of the death of The Boss, including this nugget from Field of Schemes:
On Field of Schemes, sports facility watchdog Neil deMause observed:
Most of the coverage so far has talked about the seven championships the Yankees won during his tenure and his "bluster"; less attention has been given to his role in the debacle that is New Yankee Stadium.
...Steinbrenner is survived by his children Hank, Hal, Jessica, and Jennifer, $1.2 billion in public subsidies for his new stadium, and a big hole in the ground where promised parks were supposed to be by now.
Posted by eric at 10:10 PM
June 19, 2010
The Atlantic: one idea that has outlived its usefulness is "publicly financed stadiums"
Atlantic Yards Report
From the July/August 2010 issue (Ideas) of the Atlantic magazine:
Ideas That Have Outlived Their Usefulness
• The mortgage-interest deduction
• Jared from Subway
• Publicly financed stadiumsI think Neil deMause of Field of Schemes (interviews) was ahead of the curve on this one.
Note that Atlantic Yards, as with the new baseball stadiums, is not directly publicly financed in the blatant way some other sports facilities are, but relies on significant infrastructure subsidies, tax breaks, and a tax-exempt financing scheme that the Treasury Department no longer allows.
Posted by steve at 8:23 AM
June 16, 2010
Stadium Status: Federal Subsidy for Private Development
Next American City
by Willy Staley
More coverage of the Internets Celebrities' Stadium Status.
New York City, as Stadium Status shows, was fooled three times over in one year. Starting in Queens, our hosts Dallas and Rafi take a look at Shea Stadium’s replacement, Citi Field, which uses the old Shea Stadium’s footprint as a parking lot. Then, they go uptown to The Bronx to see The House that Ruth Built reduced to rubble directly across the street from a shinier version of the same, only this time with a Hard Rock Cafe built into the ground level, and prohibitively expensive tickets. About half of each stadium’s cost was covered by taxpayer subsidies. In the case of the new Yankee stadium, the taxpayer bill was about $1 billion. And yet, in interviews with fans in and around the stadiums, no one seems upset. Everyone, after all, likes a new ballpark.
The main event of the video is Dallas and Rafi’s examination of the controversial Atlantic Yards project in Downtown Brooklyn. The project, which will receive twice the amount of subsidy that the Yankees received, is a basketball arena for the New Jersey Nets, and 16 high-rise residential buildings. As Dallas and Rafi point out, the only thing worse than the Nets was the use of eminent domain to remove so-called “blight” from the neighborhood, clearing out a few hundred residents to make room for the project’s massive footprint.
Despite all the destruction, the development got most of its political support because of Ratner’s promise of 2,250 units of affordable housing, which that particular area or Brooklyn lacks. But, even that is dependent on a great deal of public subsidy, and some critics fear Ratner won’t deliver. Even if he does, the Internets Celebrities point out, he only has to deliver a fraction of those units in the first decade of development.
Additional coverage...
The Consumerist, Do New Stadiums Really Give Back All They Get From Taxpayers?
Are new stadiums, like Citi Field, the new Yankees stadium, and the proposed new Nets stadium/Atlantic Yards project, really worth the oodles of public dollars, tax breaks, and the hundreds of residents displaced, their land seized under eminent domain? Stadium Status is an awesome new 20 min documentary by the Internets Celebrites that examines the issue and has come to a firm "Nahhhh" as its conclusion.
...I was in Detroit recently. They have a nice new stadium. Just a few blocks away down the main drag it still looks like a bombed-out warzone.
Posted by eric at 11:35 AM
June 9, 2010
Internets Celebrities Take On Atlantic Yards
The Local [Fort Greene/Clinton Hill]
by Liza Eckert
Do you have any idea how big 22 acres really is? The Internets Celebrities, a trio of gonzo online filmmakers, didn’t. So while they were out shooting their most recent video, “Stadium Status,” they decided to walk the perimeter of Atlantic Yards.
It took them 30 to 40 minutes to make the whole trip, said director Casimir Nozkowski, though their stroll is shown manically speeded-up in the film, above (which contains some profanity).
NoLandGrab: Based on current (and future) traffic conditions, however, walking might still be speedier than driving.
Posted by eric at 9:32 AM
June 4, 2010
Internets Celebrities In Brooklyn: Do Not Despair
Who Walk In Brooklyn
Regular denizens of Eastern Parkway hardly need an introduction to writer and guerilla filmmaker Dallas Penn but with the ICs, DP has two partners, co-conspirator and co-host Rafi Kam, and director Casimir Nozkowski. Tonight they’ll be screening their latest and— dare I say it?— greatest work yet, Stadium Status. Don’t be jealous! It literally couldn’t have been done without you too, at least those of you who pay taxes and have seen “one thin dime” of your money go to support scumbags like George Steinbrenner, Fred Wilpon and Bruce Ratner.
One might wonder, is “scumbags” a proper term for an editor and historian to use? And what about “scumbags,” as I’ve put it, like Rudy Giuliani, George Pataki and Michael Bloomberg, not to mention almost the entirety of the New York State legislature, New York City council and the Borough Presidencies of Brooklyn, the Bronx and Queens? In 1995, Christopher Wallace famously asked “Who Shot Ya’?” It’s long past time the people of NYC demanded their own answer, especially at a time when great institutions and good people like the Brooklyn Public Library are threatened with severe budget cuts.
NoLandGrab: Please note that the screening took place on Tuesday, June 1st.
Related coverage...
Nostrand Park, Internets Celebrities Stadium Status Premieres
As you can well imagine Stadium Status examines the forthcoming Barclay’s Arena, future home of the Brooklyn Nets. Since the film was produced after Citi Field and the new Yankee Stadium were complete, it’s in the scenes featuring the opposing sides in the Atlantic Yards battle where Kam, Nozkowski and Penn show their growth as filmmakers. Already well versed in delivering men on the street satire and punditry, the Internet Celebrities step aside and let the Atlantic Yards antagonists speak for themselves. A particular rich scene finds a worn out Daniel Goldstein, Devevlop Don’t Destroy Brooklyn founder, and the last Atlantic Yards holdout, making his case one last time to halt Atlantic Yards.
Found in Brooklyn, Stadium Status-Our Tax Dollars at Work!
I don't know about you, but shouldn't we be paying for better schools and keeping the libraries open? Here is an excellent short touring the new Yankee, Shea and future New Jersey Nets Stadium in the Atlantic Yards. Showing how the stadiums really ARE NOT revitalizing the neighborhoods they take over.
Posted by eric at 12:20 PM
June 3, 2010
Stadium Status
Internets Celebrities
Sports fans know when the fix is in, and it's in big in New York City. The Internets Celebrities deconstruct stadia mania.
Stadium Status from Internets Celebrities on Vimeo.
"It's hard being a sports fan these days."
Stadium Status is a documentary which examines the rush of new sports stadiums in NYC as the latest example of an obscene national trend. New stadiums are built every year and the private businesses that own them benefit from huge sums of public money for their creation. Are we getting our money's worth?
Internets Celebrities are Dallas Penn, Rafi Kam and director Casimir Nozkowski
Featuring Neil deMause and Killian Jordan
Additional Cinematography - Ian Savage
Original Music - Bless-1
Additional coverage...
Atlantic Yards Report, From the Internets Celebrities, short film "Stadium Status" takes a cheeky look at two new stadiums, with a segment about Atlantic Yards
The Internets Celebrities--guerrilla filmmakers and comedic investigators--have done short films on such subjects as bodegas and the "Ghetto Big Mac."
They got some ink from the Times the other day as their more ambitious new film Stadium Status debuted.
I'll get to the Atlantic Yards segment in a bit, but first, their explanation for the project:
Our starting point for this movie was simply asking the question: why did the Yankees and the Mets get to build record-breakingly expensive stadiums in the SAME YEAR? Considering we were on the brink of a massive recession and now face massive budget shortfalls in New York state, it seemed problematic that so much public funding went into these buildings – with little assurance of any tangible public benefit.
From there, we employed our usual investigation methods. Namely, go to a place and start filming. We actually got into Citifield and were able to film there. Yankee Stadium confiscated our tape – but we still managed to talk to people and capture the exterior of the massive new structure.
We looked at the communities being affected by these stadiums and tried to see who exactly was benefiting from these teams getting to build new revenue-maximizing ballparks – directly across from the old ones.
Sources
Their on-camera sources include the indispensable Neil deMause of the Field of Schemes blog--"Yankee Stadium is about half public money," he says. The problem isn't that the city's fronting the money in the first place, says deMause, it's that they're not getting it back.
Develop Don't Destroy Brooklyn, Watch "Stadium Status": The Funniest Take Down of Bloomberg's Stadium Mania
The short includes something we've not seen through all these years, a sped-up real time walk around the permiter of the project site to show just how enormous it is.
Posted by eric at 10:58 PM
Must See on the Internets: "Stadium Status"
Develop Don't Destroy Brooklyn
Coming soon on YouTube is the Internets Celebrities' must-see video "Stadium Status," which humorously and bitingly eviscerates the stadium/arena mania under the Bloomberg administration.
Atlantic Yards is front and center.
Stadium Status should be live on YouTube later today, and we'll post it as soon as we're able to. Here's a short preview to tide you over.
Related coverage...
The New York Times, Three Men and a Video Camera, Out to Reveal Urban Truths
Their most recent and ambitious effort, “Stadium Status,” which will be shown for the first time Tuesday evening at the Brooklyn Public Library, takes on local sports franchises that get millions of dollars in tax breaks and other incentives while their neighbors scramble to make ends meet in a sour economy. The idea that luxury lives next door to poverty is not lost on the filmmakers.
“In this city you can have the poorest and the wealthiest, sometimes in the same ZIP code,” Mr. Penn said. “But even in this huge city, people feel separated and that shouldn’t be. I hope our films can show that one way or another we are all connected.”
...In “Stadium Status,” the filmmakers lament that sports franchises promise trickle-down benefits to local merchants who never get the same type of economic incentives. “You go to the stadium, you’re not going shopping or eating on River Avenue,” Mr. Penn said. “Yankee Stadium is like a mall, where everything happens in the confines of the stadium. At the end of the game, you just go to your car and get on the Major Deegan.”
Posted by eric at 9:35 AM
June 1, 2010
Stanley Cup economic impact in Philly: Not so much
Field of Schemes
Has Andrew Zimbalist gotten religion? Or is it just that he's not being paid by the Philadelphia Flyers?
Sunday's Philadelphia Inquirer featured a rare article that debunks the usual wild claims of economic windfalls from pro sports playoff games: Despite the Flyers playing in the Stanley Cup Finals, notes the paper, neither the team nor the city will reap all that much money as a result.
In particular, notes economist Andrew Zimbalist, the claims by Flyers president Peter Luukko that the city will gain $200,000 in tax revenue per game are likely inflated, since "pretty much all the people who are going to be at the arena will be from Greater Philadelphia, and they spend money at the arena instead of spending it somewhere else in the Philadelphia economy."
Of course, that's not exactly what Zimbalist said in his economic impact analysis paid for by then-New Jersey Nets owner Bruce Ratner, in which he assumed substantial increased tax benefits to New York from moving the Nets to Brooklyn. But like they say in academia, better late than never.
Posted by eric at 8:47 AM
May 18, 2010
Boosting the Wilpons?
The Neighborhood Retail Alliance
Richard Lipsky, always careful to avoid biting the hand that feeds him, assails subsidizing sports venues in Queens while positing that over in Brooklyn, they "might actually make some sense." Especially if the developer has paid you to lobby for it.
It has to do with the economics of sports franchises. As one expert has pointed out: "Local political and community leaders and the owners of professional sports teams frequently claim that professional sports facilities and franchises are important engines of economic development in urban areas. These structures and teams allegedly contribute millions of dollars of net new spending annually and create hundreds of new jobs, and provide justification for hundreds of millions of dollars of public subsidies for the construction of many new professional sports facilities in the United Sates over the past decade. Despite these claims, economists have found no evidence of positive economic impact of professional sports teams and facilities on urban economies."
So, by all means, offer a spot in Willets Point to a dying hockey franchise-it makes as much sense as NYC spending billions to evict existing business owners and their thousands of employees in order to house the largest car dependent shopping mall in NYC. And as far as Atlantic Yards is concerned, where thousands of units of housing give the development a greater economic rationale, that might actually make some sense. The arena is gonna get built and the Islanders would be value added to the arena.
NoLandGrab: Gotta love Lipsky's blog tagline — "Protecting Neighborhood Business For Over 20 Years." Which "neighborhood business," exactly, are you protecting in Brooklyn? Forest City Ratner?
Posted by eric at 12:03 PM
May 17, 2010
Times columnist criticizes corporate welfare for stadiums and companies making bogus threats to leave city; Atlantic Yards would have fit right in
Atlantic Yards Report
In a column in today's New York Times headlined Companies We Keep, and Pay For, Metro columnist Jim Dwyer criticize the willingness of city mayors to subsidize companies to move from other parts of the city into the rebuilt World Trade Center.
Such corporate welfare has been provided in response to threats to leave that "were barely disguised feints, and sometimes not even that." Dwyer cites the magazine publisher Condé Nast, and other media businesses, including the Times itself. The biggest winners were in the financial industry.
And while Mayor Mike Bloomberg canceled his predecessor's subsidies for new baseball stadiums, writes Dwyer, "A few years later, Mr. Bloomberg used hundreds of millions in public money to help the Yankees and Mets build stadiums."
What about AY?
Equally worthy of mention--but unmentioned--is Bloomberg's willingness to subsidize a new basketball arena in Brooklyn.
Posted by eric at 11:01 AM
May 14, 2010
An arena for the Islanders near CitiField? Not without major subsidies (and what about financing and the arena glut?)
Atlantic Yards Report
Norman Oder reports on news of discussions between Mets' COO Jeff Wilpon and Islanders' owner Charles Wang about relocating the latter to Queens.
The Brooklyn arena would be a much better bet for a move for the Islanders from the Nassau Coliseum--except it can't support major league hockey as designed.
"I'd love to have more teams move here," Mayor Mike Bloomberg said at a news conference, according to Newsday. "That'd be great." So great, in fact, he signed on well before Atlantic Yards was publicly announced.
Related coverage...
Queens Crap, Atlantic Yards, part 2?
Posted by eric at 11:05 AM
April 27, 2010
At what point does the “subsidy” become “unscrupulous?”
NYC Restorations
Atlantic Yards yes, ferries no?
A recent article from the NY Daily News about their shutting down a shuttle from Rockaway Beach to Manhattan had this to say:
Deputy Mayor Howard Wolfson explained to the packed room of riders at the Belle Harbor Yacht Club how the city was subsidizing nearly $20 per passenger trip on the ferry. Wolfson noted this was a far cry from the 56 cents per subway ride the city provides in subsidies for each straphanger.
“The clear metrics that were established to determine whether or not this would be a success have not been met,” Wolfson said.
So what are the clear metrics that were established? What makes this a success or a failure, according to the Mayor’s office? Why is the city’s subsidizing of the ferry a failure when the financial exceptions made for the creation of a baseball or football stadium is deemed a success?
...So let’s get back to the original question – at what point does the subsidy become silly? Why is the metric used for public transportation seemingly thrown into the bin when we look at stadium construction, or expensive condo units? Why does the MTA shut down umpteen bus lines and an entire subway line because of budget cuts, and how can we then afford to foot the bill for Forest City Ratner’s Atlantic Yards development? How can the deputy mayor say on one hand that the subsidies for the Rockaway ferry are untenable, but on the other, that Yankee Stadium was a giant success and boy-oh-boy Atlantic Yards is going to be an even bigger one?
I think we’ve gone past silly into surreal.
Posted by eric at 11:45 PM
April 5, 2010
NYT op-ed argues against skybox tax subsidies, (indirectly) undermines Forest City Ratner's plan for the Barclays Center
Atlantic Yards Report
It's pitched mostly as a baseball piece, tied to the new season, but today's New York Times op-ed, Throw Out Skybox Tax Subsidies, could just as easily been written to explain how the new basketball arena in Brooklyn is being funded and marketed.
Richard Schmalbeck, a law professor at Duke, and Jay Soled, a professor at the Rutgers Business School, write:
UNTIL the 1970s, Major League Baseball was a populist sport. Bleacher seats cost as little as a dollar, meaning middle- or even working-class fans could afford to take their families to a game a few times each season.
But in the years since, tickets to baseball games — along with other professional sports events — have skyrocketed in cost. Over the last two decades, the average ticket price for a Chicago Cubs game has increased 265 percent, more than four times the inflation rate. Add in parking, concessions and souvenirs, and a family trip to one of this week’s opening day games could easily cost a few hundred dollars.
There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.
That means that anyone who wants a good seat is in competition with businesspeople wielding deductions--and that ballparks are today designed with fewer seats but more luxury skyboxes.
For arenas, too
The same could be said about arenas. There are to be 104 suites at the Atlantic Yards arena, down from a once-projected 170. The team's interim home, the Prudential Center in Newark, has 82 suites, nearly three times as many as the 29 suites at the Izod Center.
NoLandGrab: Yes, yet another subsidy for Bruce C. Ratner.
Posted by eric at 11:48 PM
March 25, 2010
Atlantic Yards YES! Teachers (and students) NO!!
NYC Schools Chancellor Joel Klein is warning that, due to New York's severe budget crisis, several thousand teachers might soon be laid off, affecting every single city school district. Yet Klein's boss, Mayor Michael Bloomberg, has lavished hundreds of millions in subsidies on Bruce Ratner's Brooklyn basketball palace.
NY1 News, Klein Warns Of Thousands Of Teacher Layoffs
Facing severe cuts under Governor David Paterson's proposed budget, Schools Chancellor Joel Klein told the City Council's Education Committee Wednesday that 8,500 teachers could soon be laid off.
The chancellor said in a worst-case scenario the department would be forced to lay off 15 percent of math, English, science and social studies teachers.
Who needs math, English, science and social studies when you have hoops? Like Jay-Z said at the Atlantic Yards groundbreaking ceremony: ""I think about growing up in New York Ci--I mean Brooklyn, in Marcy Projects, and shooting jump shots and thinking I could make it to the NBA."
"The children of New York City schools are going to pay for the mistakes that adults made with the economy. And we have to do everything we can to stop that from happening," said United Federation of Teachers President Michael Mulgrew.
Well, not quite everything. Former UFT President Randi Weingarten was an unequivocal booster of Atlantic Yards.
"Are teaching jobs really the only place left for the budget cuts? Has the department of education again looked at its spending on service contracts? Can some cuts be focused on the central administrative offices?" asked [City Council Education Committee chairperson Robert] Jackson.
"Oh, we've been cutting the fat. And I think there is no fat. That was the whole point of the exercise today," responded Klein.
NoLandGrab: Jackson, of course, didn't ask if there were any mega-project boondoggles that could perhaps be cut instead.
Posted by eric at 10:33 PM
February 3, 2010
Stadium Development: New Yankee Stadium Helps Lift Bronx to Poorest, Hungriest Place in America
Runnin' Scared
by Steven Thrasher
Our own Neil deMause, who literally wrote the book on the subject, has repeatedly tried to show what a boondoggle stadium-building can be for cities and neighborhoods.
Here's new evidence of what the new Yankee Stadium has brought to The Bronx. Not only is the borough home to one of the poorest congressional districts in America -- the home of the new, heavily-subsidized stadium and the current World Champs can also boast that their 'hood is also the hungriest Congressional district in the nation!
As of the last census, in 2000, the 16th Congressional District was the poorest in the nation, with 42.2 percent of residents living below the poverty line. Now, nearly a decade later, a new Gallup poll finds that more than 36 percent of people in the 16th have reported that there are times when they have not had money to buy food for themselves or their family.
This compares to a hunger rate of "just" 16.5 percent in the greater New York/New Jersey/Long Island area.
The Gallup poll from which this finding comes was begun at the beginning of last year, so economic relief from all the good jobs and economic activity spurred by opening the new Yankees stadium may not have been included. But wait! The Daily News also offers this telling metric of how well the boondoggle is floating The Bronx's boat: City Harvest says that while only 381,364 Bronx residents visited "emergency food programs" in the third quarter of 2008, in the third quarter of this year -- at the height of the first season in the new park -- that number had increased by 17 percent, to 445,900 people.
...There's also a Atlantic Yards harbinger in the News story: Brooklyn is home to the 6th hungriest Congressional district in America. You're in sixth place now, Brooklyn, but just wait! When you get the Nets Arena, maybe you'll compete with the home of the Bronx Bombers for the chance to become number one in poverty and hunger.
NoLandGrab: And let's not forget that while a third of residents in the Yankees' neighborhood are going to bed hungry, the money-minting, penny-pinching team consistently underpays the rent that it owes the city.
Posted by eric at 4:25 PM
Goooaaalll! K.C. Wizards Score a Home
The Wall Street Journal
by Maura Webber Sadovi
Kansas City, Kansas, managed to green-light a soccer stadium project without public approval, by repurposing an existing bond issue that was ahead of schedule due to higher-than-projected sales tax revenues.
Even as a stadium building boom is tapering off, some local governments are using creative financing to stay in the game. Among the most recent to write a big check: Kansas City, Kan.
About $147 million in bonds backed by the state of Kansas and local sales-tax revenue were recently approved by the Unified Government of Wyandotte County/Kansas City, Kan. The bonds will pay for much of the $165 million, 18,000-seat professional soccer stadium in which Major League Soccer's Kansas City Wizards are expected to play their 2012 season.
...The bond approval was seen by many as a major break for the stadium and for the Wizards, who currently play in a Kansas City baseball stadium.
To be sure, it isn't the only stadium to move forward during the downturn. A regular-season baseball stadium for the Florida Marlins that is expected to cost more than $500 million was approved last year by the Miami-Dade County commissioners. And in December, developer Forest City Ratner Cos. sold $511 million in tax-free bonds to finance a $900 million sports arena in Brooklyn, N.Y.
Still, the total value of open-air stadium projects started last year in the U.S. fell to about $1.3 billion from about $3.4 billion near the peak in 2007, according to McGraw-Hill Construction.
Posted by eric at 12:15 PM
February 2, 2010
Bronx, NY Focus
Mole's Progressive Democrat
Bloomberg to axe 934 city workers...Bloomberg axes more fire houses...Bloomberg axes another school...BUT, when it comes to giving tax money to Bruce Ratner: Bloomberg/NYC Gave $131 Million to Bruce Ratner.
Posted by eric at 10:58 AM
January 28, 2010
Bloomberg/NYC Gave $131 Million to Bruce Ratner
The Huffington Post
by Steve Ettlinger
This whole Atlantic Yards boondoggle thing is still getting more amazing. Turns out, when Ratner bullied people into selling out by using the threat of eminent domain--totally standard and understandable--he also knew he could pay top dollar because he was using our own money to help ease his pain. My pain is formidable.
...There is still a possibility that this scam will be stopped by a judge or Governor Paterson, and we could then expect a more rational private development or at least a more rational public/private partnership. If this happened, Mayor Bloomberg might exit his era with one less major blotch on his record.
Posted by eric at 12:17 PM
January 27, 2010
City shells out another $31 million to help developer Bruce Ratner buy land for Atlantic Yards
NY Daily News
by Erin Durkin
You can't make this stuff up. On the same day that Mayor Bloomberg traveled to Albany to argue that the proposed state budget would force the city to make $1.3 billion in cuts and lay off 19,000 workers, including police and firefighters, newly released Atlantic Yards documents revealed that the Mayor had kicked in another $31 million of the taxpayers' all-to-scarce money for Bruce Ratner's economically nonviable arena boondoggle.
The city has shelled out another $31 million to help developer Bruce Ratner buy land for his controversial Atlantic Yards project, new documents show.
That's on top of $100 million the city previously pledged to buy up property for the new Nets arena and 16-tower project, bringing the total to $131 million.
An updated funding agreement signed in October and released this week said the $31 million would be used to buy four properties on Dean St.
City officials said the subsidy won't cost taxpayers more money - instead, the $31 million will be subtracted from $105 million previously pegged to pay for infrastructure improvements around the 22-acre project site.
"No additional money has been promised or transferred," said Economic Development Corp. spokesman David Lombino.
The funding was moved because the cash-strapped developer needed more money up front - and Ratner will be contractually required to foot the bill for the infrastructure work down the road, officials said.
But project opponent Councilwoman Letitia James (D, WFP-Prospect Heights) dismissed that as an accounting gimmick - and said even if the city's bottom line remains the same, it's a slap in the face to use taxpayer money to buy property under the threat of eminent domain.
"It's a government Ponzi scheme," she said.
Related coverage...
Atlantic Yards Report, Did the city give Forest City Ratner $31 million more for arena land? Despite previous reports, the answer is yes (Updated)
Given that the city initially pledged $100 million in subsidies, then added $105 million, it's hard to believe there's a full ban on future subsidies, nor that future administrations would feel bound to not kick in for infrastructure subsidies.
Brownstoner, City Gives Ratner $31 Million for Dean Street Buys
The city claims that it hasn't increased the total amount of subsidies it's kicking in to the project (well, not since it first increased the total amount of subsidies from $100 million to $205 million); instead, the city argues, it just moved up some of the money that was originally allocated for later-stage infrastructure to help pay for the property purchase. The Atlantic Yards Report calls the legitimacy of the move "murky," because while it technically does not violate the letter of the 2005 non-binding Memorandum of Understanding (after all, it was non-binding!), it's clearly a bait-and-switch on the public.
Posted by eric at 11:51 AM
January 26, 2010
Finally, in landlord-tenant agreement, an official grant of arena naming rights; was there one in January 2007?
Atlantic Yards Report
Allowing Norman Oder access to the Atlantic Yards Master Closing documents is like giving a drink to an alcoholic. Because before you know it, he's posted one two three four five six seven entries.
When Forest City Ratner announced in January 2007 that it had signed a naming rights agreement with Barclays Capital for the Atlantic Yards arena, did it have the right to sign such a deal?
Even though I suspect that clearance for the deal was at some point secured--could they have just winged it without authorization?--documents that have surfaced as part of the Atlantic Yards master closing documents, first made available today, raise some questions.
Posted by eric at 12:38 AM
January 25, 2010
Did the city give Forest City Ratner $31 million more for arena land? Despite previous reports, the answer is yes
Atlantic Yards Report
The Atlantic Yards master closing documents were made available publicly for the first time today by the Empire State Development Corporation.
Betcha can't guess who's first to report on their contents?
Among the voluminous documents that were part of the Atlantic Yards master closing, first made available today, is one that confirms that, despite previous reports, New York City gave Forest City Ratner $31 million for arena land purchases on top of the $100 million it originally provided.
In other words, $131 million of Forest City Ratner's land purchases in the AY arena footprint, made under the threat of eminent domain, came from public funds.
And even if that represents a reallocation of city subsidies, rather than an additional subsidy--the evidence is murky--it opens up the possibility for additional city infrastructure subsidies at some point.
Figure surfaces in December
That number was first indicated in bond documents that emerged in December, which cited certain costs incurred and to be incurred in connection with acquisition of the Premises by ESDC.
David Lombino, a spokesman for the New York City Economic Development Corporation, in December told me, "The $131 million referenced is part of the total original commitment (not new money) and will go to FCR for site acquisition and infrastructure work."
That indicates both property acquisition and infrastructure. I erred in initially emphasizing that it was for infrastructure. But it appears Lombino misled me by stating that it would go for both land and infrastructure.
NoLandGrab: Lombino once did some decent reporting on the Atlantic Yards project for the New York Sun — before succumbing to the dark side.
Posted by eric at 8:47 PM
January 24, 2010
Professor Hill's Men Mobs, and Law
Natural Resonance Revolution
In this quote of a speech from 2008 by Professor Rebecca Hill of the Borough of Manhattan Community College, the proposed Atlantic Yards project again appears as what is wrong with priorities when it comes to spending public money.
"Mayor Bloomberg says that CUNY is 'asking for too much,'" Hill said, nodding her head in disgust. "However, the mayor has not experienced such sticker shock when evaluating whether or not to publicly fund private construction projects for the New York Yankees, New York Mets, the Bronx terminal market, and the New Jersey Nets arena in Brooklyn's Atlantic Yards. CUNY is at least as important to New York City as those wealthy sports teams and real estate developers who have taken billions of dollars in tax-abatements and incentives since 2001, don't you think?"
Posted by steve at 8:48 AM
January 1, 2010
What's missing in Times editorial urging Bloomberg to take care when "some bigwig wants a stadium"?
Atlantic Yards Report
Happy New Year, NoLandGrab readers! It appears that The New York Times has already broken its New Year's resolution (assuming they bothered to make it) to eliminate its big blind spot when it comes to the Atlantic Yards project of its development partner, Bruce C. Ratner.
A New York Times editorial headlined Mr. Bloomberg’s Third Term has a glaring omission:
Like all mayors, Mr. Bloomberg wants his share of monuments. He already has waterfront parks, two finished stadiums, a slew of high rises and tantalizing possibilities on Governors Island. Going forward, it will be hard for the public to stomach any big giveaways like Yankee Stadium, which, at the mayor’s urging, got billions of dollars of support, including taxpayer-backed debt, tax breaks and the use of city parkland.
“It’s a time for singles, not home runs,” said Mitchell Moss, a professor at New York University and informal adviser to the mayor. Mr. Bloomberg should use his business acumen to push for more developments with housing for moderate-income residents and public workers. The next time some bigwig wants a stadium or a fat new zoning change, the mayor should take care to demand more parks and public facilities as part of the deal. The bottom line for any development should be that it helps out more than the developer’s bottom line.
And, um, what if the mayor decides to let the state oversee the development instead, with major tax breaks, essentially free city streets and property, and an inside track on valuable public property like the Vanderbilt Yard?
Posted by eric at 1:14 PM
December 27, 2009
Bloomberg excited over money-losing project
Queens Crap
Mayor Bloomberg continues to ignore the cost-benefit analysis of the proposed Nets arena done by the City of New York Independent Budget Office (IBO).
From Atlantic Yards Report:
A statement from the mayor:
STATEMENT OF MAYOR MICHAEL R. BLOOMBERG ON PROGRESS OF ATLANTIC YARDS DEVELOPMENT
“While the rest of the country wrings its hands about the national recession, we’re building our way out of it. The $4.9 billion Atlantic Yards project - the most extensive development ever undertaken in Brooklyn - is moving forward, bringing thousands of units of housing and thousands of jobs for New York City’s middle class. In the past few weeks alone, we’ve made major investments or reached critical milestones on development projects decades in the making at areas like the Hudson Yards, Hunter’s Point South, Coney Island, Willets Point and other neighborhoods across the City. This is no time to wait and see what happens with the national economy and just hope for the best. We’re acting more aggressively than ever to create jobs and ensure New York City’s best days are still to come.”Well, as the mayor conveniently forgets, the New York City Independent Budget Office (IBO) found the arena--the only part of the project with a design--to be a net loss for the city. As for the thousands of units of housing, they depend on yet-to-be-announced city subsidies.
And while construction of the arena and other buildings surely would bring construction jobs, the number of permanent jobs projected has been steadily shrinking, with the market for office space questionable.
Posted by steve at 7:43 AM
December 25, 2009
Brutally weird holiday news from NYT: Stadium Boom Deepens Municipal Woes (no mention of AY or other NYC projects)
Atlantic Yards Report
Like us, Norman Oder finds The Times' stadium-finance story just a wee bit myopic.
There's no mention of New York City in the article.
Well, the sports facility financing schemes in New York are different and, to their architects, much superior: the amount of direct subsidy is much smaller, for land and/or infrastructure rather than construction, while the cost of construction is magically shifted to PILOTs (payments in lieu of taxes), given that the land is (and, in most but not all cases, was) tax-exempt. And the Internal Revenue Service has now banned such plans, after grandfathering in the one for the arena.
Of course the tax exemption for the Metropolitan Transportation Authority's Vanderbilt Yard was supposed to increase the price of the property when sold, but there was only one other bidder, given Forest City Ratner's head start. As the New York City Independent Budget Office (IBO) observed, "It is clear that the MTA’s ability to maximize its return from property sales has been constrained."
And the PILOTs in the case of the AY arena would rely significantly on the naming rights that the state simply gave away.
And Forest City Ratner has been good at getting the city, state, and MTA to modify agreements in its favor. Meanwhile, the IBO's analysis that the arena would be a net loss for the city has not been refuted, despite the Times's willingness to quote a deceptive response from the New York City Economic Development Corporation ( an agency that has failed to release a promised cost-benefit analysis).
Posted by eric at 9:54 AM
Stadium Boom Deepens Municipal Woes
The New York Times
by Ken Belson
Two days after the Atlantic Yards Master Closing, and after six years of editorializing in favor of Bruce Ratner's basketball arena (which New York City's Independent Budget Office projects as a money-loser for city taxpayers), The Times publishes a cautionary tale on the folly of taxpayer-funded sports venues. It's a must-read, but a bit late, no?
Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.
From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.
Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverfront.
But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.
...In many cases, the architects of the deals are long gone by the time the bill comes due.
...Problems persist. In 2004, Todd Portune, the commissioner who unseated Bedinghaus, sued unsuccessfully to change the Bengals’ lease. In 2006, the Cincinnati public schools agreed to defer their payments from the sales tax fund for three years to help cover shortfalls.
Still, the gap between expected and actual sales taxes continues to grow, something the county administration had been warning for years. In August, the administrator predicted not only a $14 million shortfall next year, but also a $94 million gap in 2014, a year after interest payments on the stadium bonds rise 44 percent. By then, the Reds will no longer be paying rent.
...So they have ordered more cuts in basic county administrative services, something that creates a slippery slope, said David Pepper, the commissioner who voted against the proposal.
“It’s like the movie where the blob keeps growing and eating away at other elements of county government,” Pepper said. “We’re beginning to cross a line in the sand by taking money from the general fund to pay for the stadiums. Once you put that money in jeopardy, you put the whole county at risk.”
Posted by eric at 9:43 AM
November 24, 2009
Sometimes Sports Stadiums and Arenas Are Worth A Lot Less Than the Public Pays For Them: No Silverdome Lining to Gathering Economic Clouds
Noticing New York
In the wake of the announcement that the City of Pontiac just auctioned off the Silverdome for a mere $583K (a fraction of what it took to build it), the State of NY is poised to approve the issuing of arena bonds for Bruce Ratner's "new off-the-tax-rolls Nets basketball arena that is already calculated by the NYC Independent Budget Office to be a $220 [million] net loss to the public."
According to the Detroit News... the arena was “once called the most desirable property in Oakland County” and a quoted realty firm says the land itself “should have gone for more than that.” Apparently the arena was not considered worth its upkeep and the city of Pontiac was desperate to get the property “back on the tax rolls.” Sports stadiums and arenas on the tax rolls? There’s a novel concept that spendthrift New York City seems is absolutely unfamiliar with!
...
Considering the Silverdome fiasco, we here in New York we can’t help but think of our own wasteful stadiums and arenas that are taking property off the tax rolls and giving less than nothing in return.
...
This is a very clear warning: The mysterious value of team spirit sports euphoria that cannot, and generally is not, economically quantified is in all likelihood economic value that just doesn’t exist at all. The overall lesson to be learned is how these sports stadium and arena deals terrifically shortchange the public with stadiums and arenas that have very low true economic value.
Posted by lumi at 6:01 AM
November 17, 2009
Jane Jacobs Report Card: #28, 29, 30 & 31
Noticing New York
Bruce Ratner's Atlantic Yards overdevelopment is scoring abysmally on the Jane Jacobs report card. Today's installments examine the unintended consequences of directing massive public subsidies to a single megaproject.
Jane Jacobs was concerned with cities as working organisms. As one part of this concern, she wrote about consciously creating communities within cities that will have political access and effective influence to represent the interests of neighborhoods. Rather than respecting this as a goal, Atlantic Yards has progressed in the opposite fashion, stripping communities of their say-so about the project. When Community Board 6 voted 35-4 to disapprove of the project as proposed in the July 18, 2006 General Project Plan and Draft Environmental Impact Statement “because it will cause irreparable damage to the quality of life in the borough of Brooklyn,” the Brooklyn Borough President who stands apart in supporting Atlantic Yards removed members from that board on a wholesale basis. Jane Jacobs was also critical of the way that expenditures of public money were also sometimes used as a distracting sort of candy to try and nullify the political rights of voters.
Jane Jacobs Atlantic Yards Report Card #29: Using Public Participation in Shaping Cities? NO
Jane Jacobs viewed the people who live in city neighborhoods has having the most important (empirically derived) first hand expertise about their neighborhoods. She therefore believed that getting their input is a supremely critical aspect of the planning process. By comparison, she discounts the value that “experts” have to offer in the process. Normally, planning for big developments involves the public in the planning through the City’s ULURP process. In the case of Atlantic Yards, the process of involving the public through ULURP was sidestepped using a mechanism that people probably never expected would be used to sidestep projects of this magnitude after the City’s Charter was amended to create the ULURP process.
Jane Jacobs Atlantic Yards Report Card #30: Avoidance of Cataclysmic Money? NO
Part of Jane Jacobs genius was to point out that money could be destructive when it floods in faster than it can be constructively used. Even if good is “intended” by it, it can be too much of a good thing. She calls this “cataclysmic money” and identifies more than one form of it, but one of its most important forms, especially these days and in the case of Atlantic Yards, is public funding and subsidy. Even though or despite the fact that the Atlantic Yards area was, through natural economic processes, attracting substantial economic capital and creating million dollar co-ops and condos, Atlantic Yards is a supreme example of something with so many bad economic equations it would never happen except for public subsidy. That subsidy is overriding private enterprise in a huge way that ought to be offensive to conservative thinkers and liberal alike.
Jane Jacobs Atlantic Yards Report Card #31: Making Good Use of Gradual Money? NO
Jane Jacobs was supremely conscious of the good that money well and properly spent could create and was not, per se, against subsidies. However, she saw the most valuable form of money as gradual money spent slowly for gradual changes, building on and supplementing what exists. That money could come in through public spending and subsidy. Jacobs was also aware that in situations like Atlantic Yards where there is massive misdirection of public funds and subsidy into cataclysmic spending, each dollar the public spends cataclysmically creating destruction also represents a dollar that could, instead, have been spent gradually for public good. So, the misdirection of funds is, at least, a double loss to the public.
Posted by lumi at 11:15 AM
NY agency to start marketing Brooklyn arena bonds
Reuters is reporting that the ESDC expects to float the triple tax exempt bonds for the Atlantic Yards arena:
"Forest City Ratner Companies, along with Goldman Sachs, is in talks with rating agencies and finalizing the bond structure," a spokeswoman for the Empire State Development Corporation said by email. "The offering statement is being finalized; we expect to release bond terms in the next two weeks."
Well, "expect to" is not the same as "will." First, it's not clear whether the ratings agencies are on board. And surely the bond sale would go more smoothly if a Court of Appeals decision comes down--as is expected, in the coming weeks--in that pesky eminent domain case.
Posted by lumi at 6:26 AM
November 15, 2009
The Yankee’s Hoggish New Stadium Monopoly Taxes The Rest of Us
Noticing New York
A report from WNYC on October 28 spotlights how the new Yankee Stadium sucks up economic activity from the surrounding neighborhood. This is the jumping-off point for this exercise to demonstrate that the economic benefits from subsidizing professional sports facilities are illusory. Although not a perfect parallel with the proposed Atlantic Yards development, some of the same schemes would be used to subsidize an arena for the Nets.
Topics covered include:
- How Yankee Stadium sucks up economic activity from the nabe.
- How the new Yankee Stadium contains fewer seats than the old one in order to drive up prices.
- How monopolies seek to appropriate local culture.
The concept of Atlantic Yards as a "mega-monopoly" is also covered:
Mega-monopoly probably describes Atlantic Yards better than any other single word given that:
- The gestating seed of Atlantic Yards was a big league sports franchise. These franchises are exempt from antitrust rules and if you search the Atlantic Yards Report site you will find a lot of discussion of their monopolistic nature by economists and other experts.
(You will also find a lot of our own comments about Atlantic Yards as a monopoly.)- Atlantic Yards’ birth was midwifed by another monopolistic expedient, the award of the project to Forest City Ratner on a no-bid basis, which was essential to preclude any possible competition.
- Its succor and the basic of sinew composition is the eminent domain abuse that chases away all other competitors and transforms what was the competitors’ into Forest City Ratner’s.
- Atlantic Yards has been further coddled by government agencies that have lavished on it additional hundreds of millions of dollars from the taxpayers on a no-bid basis, given its extraordinarily valuable naming rights and exempted it (and these many gifts) from the requirements of appraisal and bids under the Public Authorities Accountability Act
You can also read how the Yankees have managed to avoid what would be the usual tax obligations while, at the same time, taxpayers pay for the new stadium.
Posted by steve at 7:15 AM
November 5, 2009
So, could the IRS deadline for tax-exempt bonds be extended? Unclear
Atlantic Yards Report
The Empire State Development Corporation and Forest City Ratner has been feeding the financial press the line that the triple-tax-free arena bonds could be parked in escrow waiting for the litigation over the project to clear. But that scenario is easier said than done and details on how the heck the bond issuers and insurers might swing this one are not forthcoming (remember these are "tax free bonds").
But what if the IRS just extended the end-of-the-year deadline?
Perhaps the deadline is firm, but the Atlantic Yards saga is always full of twists.
The relevant document is IRS Bulletin: 2008-47, Treatment of Payments in Lieu of Taxes Under Section 141, excerpted below.
(3) Transitional rule for certain projects substantially in progress. Paragraph (k)(1) of this section does not apply to bonds issued for projects for which all of the following requirements are met:
(i) A governmental person (as defined in §1.141-1) took official action evidencing its preliminary approval of the project before October 19, 2006, and the plan of finance for the project in place at that time contemplated financing the project with tax-exempt bonds to be paid or secured by PILOTs.
(ii) Before October 19, 2006, significant expenditures were paid or incurred with respect to the project or a contract was entered into to pay or incur significant expenditures with respect to the project.
(iii) The bonds for the project (excluding refunding bonds) are issued on or before December 31, 2009.As noted in the bold text, the transitional rule requires that bonds for the project be issued on or before December 31.
That seems pretty firm, but I asked the IRS if legal challenges persist, can that deadline be extended? (While I assume that no one has yet tested that deadline in an administrative proceeding, I suspect that IRS has some general rules about whether similar deadlines can be extended because of litigation or other circumstances.)
IRS spokesman Kevin McKeon replied: "We're unable to comment due to our Disclosure Rules."
Posted by lumi at 6:29 AM
November 4, 2009
In the Shadow of Yankee Stadium, an Off Year
The New York Times
by Patrick McGeehan
The Congressional district surrounding the old Yankee Stadium was the poorest in the country. How has the new Yankee Stadium changed things?
By all reckoning, this should be the moment Saeed Alawy was waiting for. His shop, Pin Stripe Collectibles, sits just beyond the right field wall of the new Yankee Stadium, where Game 6 of the World Series will be played Wednesday night.
But Mr. Alawy and other merchants nearby said they had not benefited from the new stadium. In fact, many said that business was down significantly from previous years — running counter to predictions that the stadium would be an economic generator in the Bronx neighborhood.
For some businesses, the new stadium’s location disrupted foot traffic patterns that had been around for decades. For others, the allure of the stadium and all of its shops and food stands teamed up with the recession to siphon away too much business.
Expecting sympathy from the Yankees? Not if spokeswoman Alice McGillion is any indication.
Asked how the recession had affected the Yankees’ merchandise sales, she declined to discuss whether the team had taken in more or less money from selling souvenirs this season. “We’re not going to get into the revenues,” she said.
NoLandGrab: Where do you think mall-owner Bruce Ratner is going to steer traffic from Bruce Ratner's planned arena?
Posted by eric at 8:43 AM
October 29, 2009
Why at least $7 million from New York City's Atlantic Yards budget doesn't belong
Atlantic Yards Report
On 9/2/08, I reported on the rather incomplete information released by New York City in response to my Freedom of Information Law (FOIL) request seeking information about the city's willingness to devote an additional $105 million to Atlantic Yards, on top of the original $100 million pledge.
The city stated that the additional $105 million "represents capital projects to support infrastructure and other capital needs in the area, some of which are independent of, but in the area of the planned Atlantic Yards project."
As I wrote, most of those capital projects did not seem independent of Atlantic Yards. Among them was $7 million for reconstruction of the Sixth Avenue Bridge. However, given changes in the plan for the arena block, the bridge will not need reconstruction, as noted on page 4 of the June 2009 Technical Memorandum produced by the Empire State Development Corporation (ESDC).
...
So, what happens to that $7 million? Is it simply redeployed or funneled to developer Forest City Ratner? I asked the ESDC, which told me to query the New York City Economic Development Corporation, which I did late on Tuesday, with no response as of yet.
Posted by lumi at 6:17 AM
October 28, 2009
Main Street NYC Returns to 161st Street in The Bronx
WNYC Radio
by Alisa Chang
How has a heavily subsidized, gleaming new sports stadium in the Bronx helped the local economy? It hasn't. In fact, it's had the opposite effect.
The first World Series in the new Yankee Stadium begins today. In the third part of our Main Street series, WNYC returns to the shopkeepers on 161st in the Bronx.
They’ve seen their businesses suffer in the shadow of the new stadium, and the playoffs didn’t improve matters much. Many of these shops expected to do better with the new stadium. But WNYC’s Ailsa Chang takes a look at how the new Yankee Stadium is getting Yankee fans to spend more money inside rather than outside the ballpark.
...Businesses just a couple blocks down 161st street didn’t think they’d be competing against a new mega-mall. Abdul Traore is managing a near-empty store called Jeans Plus. It sells Yankee souvenirs – many of them identical to the ones sold at the stadium, but about 30 percent cheaper. Traore’s been sitting on a stool by the door during the playoffs, as if waiting for customers to come in.
TRAORE: This playoff is different. Totally different. Like Saturday, I stay here until two o’clock in the morning – from the time the game start until two o’clock in the morning. I don’t even make thousand dollars.
REPORTER: Traore says in the days of the old stadium, he would make about five thousand dollars on a typical game night. His business is down 60 percent right now. And he says it’s not just the recession – it’s the new stadium. Fewer shoppers walk down 161st Street these days. For a lot of reasons. The new Metro-North station spits people right into the stadium. Fans who drive to games don’t park further down 161st and walk up anymore – they have new garages right by the complex.
...NOLL: The whole point of a modern athletic facility – whether it’s an arena for hockey and basketball or a stadium for football or baseball – is to get all of the money to be spent inside the stadium.
REPORTER: Economist Roger Noll at Stanford University has looked at every stadium built in the last 20 years. In each case, he wanted to find out whether the new stadium gave a real, substantive boost to neighborhood businesses. The answer? Not a single one did. In fact, many local stores ended up doing a lot worse.
Additional coverage...
Develop Don't Destroy Brooklyn, A Cautionary Tale for Local Businesses Around the Proposed Atlantic Yards Arena Site
WNYC radio has broadcast a disturbing story for anyone who thinks or hopes that the Barclays Center Arena will be good for local businesses on Flatbush or Atlantic or in Park Slope, Prospect Heights, Fort Greene, Boerum Hill or Clinton Hill. It won't be.
As the sports economist Roger Noll makes clear, and the report emphasizes and illustrates, the whole purpose of the modern day arenas, such as Barclays, is to keep its visitors spending and buying stuff inside the arena.
Posted by eric at 11:01 AM
October 25, 2009
Yankees Claimed a Park; Children Got Bus Rides
The New York TImes
By Jim Dwyer
Put this one in the "Should Have Seen This Coming From A Mile Away" folder. This article bemoans the promises not kept and the poor deal that the City struck with the Yankees to put the team in their new stadium.
Where were the critical articles from the Times when these deals were being made? If the proposed Atlantic Yards project moves forward, can we then expect the Times to expose the incredible public subsidies and eminent domain abuse for this land grab when it's too late?
Yankee Stadium is a kind of marker of civic values, and the end of the season is a good time to measure how those values have evolved. But it won’t be easy. More than most sports, professional baseball is marinated in the cheap liquor of nostalgia. People get drunk on it and lose their judgment. So this history cannot walk a straight line.
As mayor, one of Rudolph W. Giuliani’s jobs was to serve as landlord for the Yankees. Mr. Giuliani, who made his name as a corruption buster, was able to buy four World Series rings from the Yankees for about $16,000 — which might well be less than a fifth of their retail value. Who knows if he has bells on his toes to go with the rings on his fingers, but Mr. Giuliani promised the team a sweet deal on a new ballpark.
Then Michael R. Bloomberg became mayor and canceled the Giuliani arrangements. “Everybody understands that given the lack of housing, given the lack of school space, given the deficit in the operating budget, it is just not practical this year to go and build stadiums,” Mr. Bloomberg said in 2002. “You have to set priorities, and the priorities this year do not allow for the construction of sporting stadiums.”
That moment passed. The Bloomberg administration proceeded to negotiate a new deal — turning over parkland for 40 years with no rent and no taxes, rebuilding streets and roads and a commuter rail station and letting the team use the city’s tax-free bonding capacity.
Posted by steve at 8:12 AM
October 21, 2009
Islanders Foe or Prudent Politician? Hempstead’s Murray Stands Her Ground
The New York Times
by Ken Belson and Jeff Z. Klein
Depending on whom you speak to, Kate Murray is either an hard-headed obstructionist willing to drive the Islanders out of Long Island, a principled public servant protecting taxpayers or a Republican veteran holding out for a political ransom.
Murray has been tagged with these and other less flattering labels because as supervisor of the Town of Hempstead, she and her board have the power to block, delay or approve the zoning for the Lighthouse Project, a $3.8 billion plan to refurbish the Nassau Coliseum, the Islanders’ shabby home, and build thousands of homes, offices and stores nearby. The project was first proposed in 2003 and Murray is one of its last, and seemingly most stubborn, hurdles. She says she’s only doing her job.
...Politicians who get in the way of big real estate deals projects rarely get love letters from the business community, particularly during a recession when work is scarce. But when the projects include new sports venues and rabid fans are added to the mix, the pressure on politicians is even more pronounced.
...In their defense, Murray and her supporters point to Bruce Ratner, the owner of the New Jersey Nets, who has spent years and millions of dollars fending off lawsuits and other problems in his quest to build the $4.9 billion Atlantic Yards development in Brooklyn that includes the Barclays Center basketball arena.
NoLandGrab: The article does mention the planned Barclays Center as a potential home for the Islanders should the Lighthouse project fall through, though it correctly notes that the arena would need to be redesigned in order to accommodate hockey. With the Islanders committed to a lease in Uniondale until 2015, that seems unlikely.
Posted by eric at 11:26 PM
October 19, 2009
Small Businesses to NYC: Get Off Our Backs!
City Journal
By Steven Malanga
In Bloomberg's NYC, small businesses have had an increasingly tough time...
Morton Sloan feels besieged. Over the last several years, the Bronx-based entrepreneur has watched the property taxes on the ten Morton Williams supermarkets he runs in the city swell by hundreds of thousands of dollars. Increasingly aggressive city inspectors now linger in those stores for hours, writing costly citations for items that clerks accidentally mislabel. Some of Sloan’s suppliers say they’ll no longer deliver to New York City because of the Department of Transportation’s frequent parking-ticket blitzes. It gets worse: a new Bloomberg-administration program that encourages fruit and vegetable vendors to set up on street corners has left him scrambling to match prices with competitors who don’t have to pay rent, utilities, payroll taxes, and various other expenses. And now the city wants to plunk a 60,000-square-foot supermarket into a heavily subsidized new development just blocks from two of his stores. “I’ve never received a subsidy or asked anything of the city in 35 years, except to be left alone to do business,” Sloan says. “But everywhere I look these days, it seems like the city is trying to make life tough for me.”
...at the same time that the City has increased handouts to megaprojects like Bruce Ratner's Atlantic Yards:
Bloomberg is also seen—for good reason—as a friend to big, sweeping, government-designed economic projects that displace local businesses through eminent domain. He has supported everything from the Atlantic Yards project in Brooklyn to a massive new development in Willets Point, Queens, which would uproot hundreds of firms. Whatever the merits of these individual initiatives (and government’s record of picking winners in business is erratic at best), eminent-domain law as practiced in New York is a virtual death sentence to most small firms. “If government wants to displace a small business in New York and the business doesn’t own its own property, its chances of survival are slim because government pays virtually nothing to these businesses,” says Michael Rikon, an attorney at Goldstein, Goldstein, Rikon & Gottlieb in Manhattan, a firm that specializes in eminent-domain cases. “They come to me to represent them, and I often refer them directly to a bankruptcy lawyer.”
NoLandGrab: Bloomberg already increased the direct cash subsidy for Atlantic Yards from $100 million to $205 million.
Bruce Ratner is not slated to pay property taxes nor most of the other bothersome taxes that are a part of doing business in NYC. As Leona "the Queen of Mean" Helmsley was famously quoted as saying, "Only the little people pay taxes."
Posted by lumi at 6:19 AM
October 16, 2009
A Bloomberg Score Card: The Mayor's Hits and Misses
The Village Voice
by Wayne Barrett
The Voice's venerable political reporter weighs the plusses and minuses of a third Bloomberg act. One definite minus: arenapalooza.
As much as the city ought to name a hospital after Mayor Mike, it is more likely to name a stadium or arena. He has certainly spent enough of our money on them to pay for the naming rights. If he gets a pre-election Yankees World Series parade, the confetti should remind us of the bonanza of tax dollars that helped finance the stadium in which it was won.
...But the fact remains that the only major projects built or to be built in the Bloomberg era—the monuments to Mike—are Yankee Stadium, Citi Field, and the soon-to-be-bonded-by-the-city Nets arena in Brooklyn. Even the city-financed extension of the 7 subway line, ballyhooed by Bloomberg aides, is merely a potential pathway to Westside development, not a project itself.
That's a dismal track record, especially from a mayor who derided the job development benefits of stadium deals when he junked Giuliani's in 2002. The city is directly spending a half-billion on the two stadiums, largely for infrastructure improvements, some of which are still incomplete. It is also tapping its own supply of tax-exempt bonds, which are supposed to be used for projects of great public value, like hospitals, for $1.9 billion, subsidizing the two teams that are claiming to be building the stadiums themselves to the tune of $1.3 billion (a combination of the savings achieved through the bonds and other property, mortgage, and sales tax exemptions). The evidence that top officials of the Bloomberg administration reversed land assessments for the Yankees deal to artificially jack up the value in order to qualify for the tax-exempt financing is overwhelming and would—in a time when a good scandal had staying power in New York—make Bloomberg wince at the thought of an election eve parade. E-mails like one from a top aide to Deputy Mayor Doctoroff explicitly said they were making the assessment "so high" in an attempt "to support the tax-exempt financing."
By December, the Bloomberg administration will replicate its scandal-ridden history of bonding these projects by supporting the issuance of $678 million in state tax-exempt bonds for the Nets. The IBO estimates that the arena will also cost the city $350 million, combining direct and indirect subsidies, concluding that it will lose at least $40 million over the life of the deal, assuming the most optimistic revenue projections. Salty Mike's response to the unstated, apolitical IBO: "I don't know what the IBO studies would have shown back when they tried to establish the value of Central Park."
A Bloomberg hero, the late Senator Patrick Moynihan, attached an amendment to the IRS code in 1986 to try to bar cities from using tax-exempt bonds to finance stadiums, but the IBO reports that the city "found a way to circumvent these strictures" by technically structuring these two privately built and operated stadiums as publicly owned and leased for 99 years. The IRS originally OK'd this arrangement and then reversed itself, prohibiting such maneuvers in the future. Yet the city plans to do the arena precisely the same way, and the IRS grandfathered the arena in under its initial ruling, giving the city until the end of the year to sell the bonds. Incredibly, all of these resources have been used either to induce a basketball team to move across the river or to build stadiums with fewer and more expensive seats, neither of which is much of a public benefit. And every independent analysis re-establishes what the mayor once believed—nothing generates fewer real jobs than these television studios disguised as sports facilities.
Posted by eric at 4:58 PM
October 14, 2009
Post columnist Siegel: ask the mayoral candidates to justify "massive subsidies" for new sports facilities
Atlantic Yards Report
Atlantic Yards watchdogs aren't the only ones who are wondering how politicians waste taxpayer money on new sports venues with a straight face.
From fiscal conservative Fred Siegel's op-ed in the New York Post, headlined A wasted debate: B'berg, Thompson ignore economy: So here are a few questions that the panelists might want to ask if the next debate is not to be as hapless:
* Ask the mayor if his massive subsidies for the well-to-do owners of the Yankees, Mets and Nets for new stadiums can be economically justified when they're being paid for by a middle class bridling under what are already the highest taxes in the continental US.
Posted by lumi at 6:18 PM
October 11, 2009
In East Rutherford, N.J., New Football Stadium, but at Whose Cost?
The New York Times
By Ken Belson
This is an interesting item on how sport facilities receive public subsidies. This is a case of the new Jets and Giants stadium being built in East Rutherford, N.J.
The stadium, which is scheduled to open next year, is in East Rutherford, and the borough naturally wants to collect taxes that any private business in its borders would have to pay. But the stadium sits on land owned by the New Jersey Sports and Exhibition Authority, a tax-exempt organization created by the state in 1971 to run the sporta arenas in the Meadowlands and elsewhere in New Jersey.
For years, the authority has collected rent from the teams to use its publicly owned stadium, and payments of $1.3 million a year in lieu of taxes. In turn, the authority has made payments to East Rutherford in lieu of taxes that cover the football stadium as well as the Izod Center and the Meadowlands Racetrack.
This year, the authority will pay the borough $5.97 million, which is equal to 21 percent of what the borough would have collected if the land were privately owned. The first annual payments of $466,000 started in 1977, the year after the sports complex opened, and have been renegotiated every decade or so.
Now, however, the Jets and the Giants are building their own stadium, team offices and practice facilities, most of them in East Rutherford. Because the buildings are privately owned, James Cassella, the mayor of East Rutherford, said the borough deserves more than what it has been receiving, a point he plans to make in negotiations with the authority.
“If the poor guy trying to run a dry cleaner and struggling to make ends meet pays taxes, should it be any different for a couple of millionaire owners?” Cassella said. “I’m just looking for our fair share.”
NoLandGrab: Why can't the Times find the space to take a close look at similar shenanigans here in Brooklyn? Once again, The Times demonstrates that is has an enormous blind spot when it comes to scrutinizing public subsidies for an arena in Brooklyn for the benefit of its business partner, Bruce Ratner.
Posted by steve at 7:22 AM
September 21, 2009
In Miami, the Times finds public consternation over a sweetheart deal for a stadium
Atlantic Yards Report
Norman Oder follows up on The Times' sudden interest in bad publicly funded sports-venue deals — in Miami.
The New York Times, which treated the passage of the Atlantic Yards plan last Thursday as an event barely worthy of mention, much less scrutiny, today does some delving into a controversy about another sports facility.
...The situation in Brooklyn is both better and worse. The city and state are devoting $305 million in direct subsidies to Atlantic Yards, with--according to the IBO--about $250 million to the arena. The $726 million represents a combination of subsidies and tax breaks, including $194 million in federal tax breaks on tax-exempt bonds.
Arguably, however, Forest City Ratner is gaining even more of a benefit from opportunity costs--provisions that reduce the level of potential additional revenues--given that the state handed over all control of naming rights, a sum reported at $400 million.
Beyond that, the construction of an arena approaching $800 million would be paid by PILOTs (payments in lieu of taxes), which, according to Assemblyman Richard Brodsky--at least when describing a similar funding scheme for Yankee Stadium--counts as a public subsidy. (Sports facilities expert Neil deMause says instead that the property tax breaks are a subsidy.)
Posted by eric at 10:57 PM
In Lean Times, Miami Pays Most of Cost for New Ballpark
The New York Times
by Ken Belson
The New York Times has to travel all the way down to Miami to report in-depth about the folly of building a new ballpark largely with public money ("ignoring voter dissent and shaky economic forecasts, Miami and Miami-Dade County will help pay for most of a new stadium," the teaser says), while right here in its own backyard, the paper has been far less critical of its development-partner Bruce Ratner's gorging at the public trough.
The push for a new baseball stadium here began the day the Florida Marlins first took the field in 1993. While city after city worked with major league teams around the country to help build nearly two dozen stadiums, the Marlins were left to play — and endure countless rain delays — in a cavernous football stadium in front of thousands of empty orange seats.
Then the recession came along, and the team got what it wanted.
Miami and Miami-Dade County have agreed to cover three-quarters of the projected $645 million cost to build the Marlins a home with a retractable roof and four huge parking garages. In return, the city and the county will receive no new revenue from the park, and the team can keep all the money from the 50 luxury suites, concessions and advertising, as well as from naming rights, which alone could generate more than $100 million.
Three-quarters of $645 million, roughly $484 million, is a whole lot less than the $726 million that New York City's Independent Budget Office estimates the taxpayers will be kicking in for Forest City Ratner's Barclays Center arena.
Such generous terms were not uncommon during good times, before city and county officials faced yawning budget gaps, potential layoffs and cuts in social services. Yet they forged ahead, anyway, largely dismissing voter opposition and the lessons learned elsewhere that new stadiums sometimes fail to deliver the economic punch promised in forecasts and that the public financing for them can handcuff future generations.
The deal was a fresh reminder that even during a recession, sports hold sway over communities regardless of the potential costs.
“Outside of Fidel becoming part owner of the team, nothing would have stopped the deal,” said Carlos A. Gimenez, one of the three Miami-Dade County commissioners who voted against the agreement earlier this year. “I’m not anti-baseball, but I’m anti-bad deal. Anyone with any sense can see this is cockeyed.”
Even The Times.
The economic benefits could also prove illusory, analysts say, because spending at new stadiums often replaces money spent at old ones or comes at the expense of spending at theaters, restaurants and other entertainment sites.
...As the recession has revealed, some conservative forecasts elsewhere proved too optimistic. In 1996, officials in Hamilton County, Ohio, expected their local sales tax revenue to grow 3 percent a year when they agreed to add a half-penny to pay for stadiums for the Cincinnati Reds and the Bengals. Instead, it has since grown 1.6 percent per year on average and fallen nearly 10 percent this year, forcing lawmakers to consider cutting the schools budget.
“Cincinnati is a smaller market, but it underscores that all these projects have risks, and Miami has to understand in the depths of this recession it may take longer to recover than people think,” said Mark Rosentraub, the author of “Major League Losers,” which examined stadium deals nationwide. Rosentraub called Miami’s agreement “reckless.”
NoLandGrab: We bet Rosentraub, or Field of Schemes author, blogger and sports-boondoggle expert Neil deMause, would've told The Times the same thing about Brooklyn's agreement — if only The Times were willing to ask.
Posted by eric at 3:24 PM
September 11, 2009
IBO: Arena is Robin Hood in Reverse
New York City faces a whopping budget gap, the MTA is nearly broke, unemployment lines are growing, and, oh yeah, Bruce Ratner's "economic engine" is going to be a money-loser for taxpayers. Think that'll cause Mayor Bloomberg to pull his support? Think again.
NY Observer, After Negative Report, Bloomberg Cheers Louder for Atlantic Yards
Confronted Thursday with an Independent Budget Office report that alleges the centerpiece Nets arena is a net-money loser for the city—which is incentivizing the project with $169 million in discretionary subsidy—Mr. Bloomberg loudly hailed the project, implicitly comparing the private development to the city's finest public assets.
“I don’t know what the IBO studies would have shown back when they tried to establish the value of Central Park or Prospect Park or anything else,” he told reporters. “These are the kinds of projects you have to do because without that we don’t have a future, and we’re going to get this one done.”
NoLandGrab: If you're still trying to decide whether or not Mayor Bloomberg is an out-of-touch billionaire or not, this ought to clear it up. Does he maybe not know that Madison Square Garden and Madison Square Park are two different things?
Crain's NY Business, City gives more than gets at Atlantic Yards, study says
The [IBO] report concluded that new revenue generated from the Barclays Center Arena would fail to compensate the city for its capital contribution to the project and lost property taxes. It said the project would cost the city $39.5 million over 30 years.
Meanwhile, the various tax benefits and capital contributions received from the city and state mean that Forest City's savings would equal roughly 80% of the expected cost of the $900 million arena, which is slated to open in late 2011. The analysis also said that the state would net $25 million from the project.
“This deal gives an extraordinary advantage to the developer, and I think it is outrageous,” said New York State Assemblyman James Brennan, one of several elected officials who called for the study.
...In a statement, Forest City said the analysis was wrong. The developer noted that the report seemed to intentionally lowball the city’s sales and tax revenues while applying all city and state subsidies to the arena alone, ignoring the rest of the project.
NoLandGrab: Oh, well if Forest City says it's wrong, then that's good enough for us. 'Cause they're known for their straight-shooting. We suppose the IBO report still won't be enough to cause Crain's to editorialize against the project.
NY Daily News, Report: City may lose 40M in Atlantic Yards plan-Total subsidies $726M
It's a reversal from a 2005 report by the budget office that found the city would make $25 million more in tax revenues than it would spend on the arena. That's because the city's contribution to the arena has gone up, said office Deputy Director George Sweeting.
"The arena conceivably would make money for the city if you weren't doing the subsidies, although, then it might be hard for [Ratner] to finance it," he said.
The report found that the city will take an additional $180 million hit in "opportunity costs" - mostly property taxes it could collect if the arena weren't exempt.
This just in: Pot calls Kettle black.
Ratner spokesman Joe DePlasco noted the budget office did the report at the request of several elected officials who oppose the project. "An analysis conducted for opponents without speaking to the responsible parties is anything but independent," he said.
Gothamist, Nets Arena Will Be $40 Million Net Loss to Taxpayers
Just when you thought developer Bruce Ratner was about to turn the corner in the P.R. war over his proposed $800 million arena for the Nets in Brooklyn, along comes the city’s Independent Budget Office with a big bucket of ice water.
WNYC Radio, Report: Atlantic Yards Arena Will Cost City More Than It Receives in Taxes
But when the IBO, a nonpartisan agency, calculates what it calls opportunity costs, the picture is universally grim. The state, city and the MTA will lose out on a potential $220 million more, largely because they are giving away land for free, selling it for less than they could get otherwise, or foregoing property taxes on the arena property.
amNY, Report: Atlantic Yards arena a money sucker
The Atlantic Yards arena isn't looking like such a slam-dunk for the city.
metro, Taxpayers’ net loss on arena
The troubled Nets arena planned for Brooklyn was supposed to raise city revenue, but instead it’s going to be a net loss for taxpayers, according to a report released by the city’s Independent Budget Office on Thursday.
NY Post, Atlantic Yards a Net loss for city
The long-stalled Atlantic Yards project, sold as a surefire way to fill the city's coffers, is looking more like a money pit, according to a new study.
...The analysis also criticizes the cash-strapped Metropolitan Transportation Authority for selling Ratner the site at below-market value.
Brownstoner, IBO Reports Net Loss from Atlantic Yards Arena
Bloomberg Watch, Reading List: Bloomberg Pays for a Day in a Middle Class Home, Ignores IBO Report for Atlantic Yards
Posted by eric at 12:00 PM
September 10, 2009
DDDB PRESS RELEASE: On Day After New Arena Designs Released…
NYC Independent Budget Office Study Shows Ratner’s Arena a Financial Loser for NYC
Warns That Planned Bond Arrangement Won’t Work
BROOKLYN, NY— Fresh off a glitzy new design release by developer Forest City Ratner, a new study concludes that the Barclays Center Arena will be a money loser for New York City if built.
New York City’s Independent Budget Office released a fiscal analysis of the Atlantic Yards arena, which shows that the arena would be a $39.5 million loss for New York City over 30 years, with an additional loss of $180 million in opportunity costs (foregone gains due to tax exemptions and below market land sales).
The fiscal analysis also calculates a $726 million taxpayer subsidy and government benefits package for developer Forest City Ratner on the arena alone.
The report, “The Proposed Arena at Atlantic Yards: An Analysis of City Fiscal Gains and Losses,” is available for download on the IBO website.
“Between the IBO’s study showing the arena is a loss for the city, and the lack of any plans or guarantees for affordable housing in the project, it is clear that the highly subsidized Atlantic Yards proposal has a negative benefit for the public while providing enormous financial benefits to Forest City Ratner, including $726 million in subsidies and special benefits for the arena alone. That stark imbalance is an important part of our eminent domain argument in the Court of Appeals,” said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. “The project is the result of a corrupt and illegal process and is a financial disaster that destroys our community. We will not let it stand and will continue to fight it by every means possible.”
The IBO study also warned that the foregone property taxes on the arena site would not be sufficient to generate PILOTs (payments in lieu of taxes) to pay off the $700 million arena bond Ratner is trying to float for the arena. The IBO estimates that the PILOT payment, based on a reasonable land assessment, would be about $15 million short of the necessary bond debt service.
“The question is will the arena land assessment be illegally inflated by the City’s Finance Department to meet Ratner’s desired debt service or will the bond amount be lowered, requiring a greater investment by the developer. This complicated issue is precisely what Assemblyman Richard Brodsky investigated with hearings and subpoenas on the new Yankee Stadium, and he should play the same watchdog role with the Nets arena PILOT situation,” Goldstein concluded.
This issue is raised in a side bar on page 4 of the IBO study.
The IBO study is at:
http://www.ibo.nyc.ny.us/iboreports/AtlanticYards091009.pdf
Posted by eric at 12:33 PM
September 8, 2009
An Atlantic Yards question the candidates haven't been asked: what about the Department of Finance's questionable tax assessments in the arena block?
Atlantic Yards Report
Norman Oder sets out to ask candidates what they think about the mysterious rise in value of property in the footprint of Bruce Ratner's Atlantic Yards project, which is in an area that has been declared "blighted."
Given the often-uninformed level of discourse about Atlantic Yards, I'm not holding my breath, but there's a significant issue that deserves discussion: the questionable tax assessments in the arena block.
I queried the four Public Advocate candidates--Bill de Blasio, Eric Gioia, Mark Green, and Norman Siegel--last week with the below information, but none offered a response (though Green's campaign asked for more time).
Check out the rest of the article for an explanation of how tax assessments are being used to game the system so that Bruce Ratner can take full advantage of triple-tax-free bonds allowed by the federal government.
Posted by lumi at 5:10 AM
September 7, 2009
New York Times hockey blog calls Zimbalist "sports-economist-for-hire"
Atlantic Yards Report
In a strong contrast to the New York Times's respectful and unskeptical treatment of sports economist Andrew Zimbalist, hired by Forest City Ratner to do a very dubious study of the Atlantic Yards project, consider coverage in the Times's hockey blog, Slap Shot.
Jeff Z. Klein, in a piece headlined Sunday’s News of Hockey, 9/6/09: Which Number Is More Absurd?, writes:
In documents filed with U.S. Bankruptcy Court judge Redfield T. Baum, the N.H.L. finally sets a fee for the relocation of franchises: $101 million to $195 million. Those are the figures two N.H.L.-hired consulting firms recommend, as the league at last puts a hard dollar number on the relocation fees called for in its bylaws.Those figures stand in sharp contrast to the estimate put forth by the sports-economist-for-hire Andrew Zimbalist, paid consultant to James L. Balsillie, the Canadian billionaire who has offered $212.5 million to buy the Coyotes and move them to Hamilton, Ontario. Zimbalist asserted in court papers that the relocation fee ought to be between $11.2 million and $12.9 million. Zimbalist’s assertion also maintains that a part of his recommended fee will suffice as the entire territorial compensation to the Maple Leafs and, presumably, the Sabres. Says the N.H.L. in its court filing, “The notion that a team in Hamilton would be worth only $11.2 million to $12.9 million more than a team in Phoenix is patently absurd.”
(Emphasis added)Such skepticism about Zimbalist is surely in order, given that four times since 2006 his testimony was discredited in a court case or thrown out of court.
NoLandGrab: We'd be remiss if we didn't point out that the Phoenix Coyotes' current ownership is the only thing standing between Bruce Ratner and the crown of "Worst Owner in Professional Sports."
Posted by eric at 10:11 AM
August 8, 2009
Fan or chump? New NY stadiums blur the difference, says Metropolis writer; also, did AY distract civics from stadium fights?
Atlantic Yards Report
Norman Oder notes an article by Mark Lamster in the July/August issue of Metropolis that wonders, after subsidizing stadiums, and paying exorbitant prices for game tickets, at what point does a sports fan begin to feel merely exploited?
The article looks at why criticism of the new stadiums for the Mets and Yankess might have been muted because of attention paid to other issues, including Atlantic Yards, though Norman Oder doesn't agree.
That fans are in essence paying for their own disenfranchisement has drawn harsh criticism from those who wished to save the old stadiums from the wrecking crews. “You have two ballparks that would never have been built if the people of New York had gotten to vote on it,” says Jim Bouton, an all-star pitcher for the Yankees in the 1960s and later a best-selling author and preservation advocate. “It’s against everything I believe about baseball and democracy.” The old ballparks were fully functional and, at least in the case of Yankee Stadium, of considerable historical significance. But the good-government activists who might have put the brakes on the two teams were distracted in the crucial months when stadium financing came up for debate. Preservationists were preoccupied with the fate of Edward Durell Stone’s kitschy Gallery of Modern Art, on Columbus Circle. The Atlantic Yards development, in Brooklyn, also commanded public attention. And, of course, there were elitists who couldn’t imagine why two crumbling baseball stadiums deserved saving at all. Against this backdrop, the most vocal critics of the two new parks, neighborhood groups in the Bronx and Queens, found themselves in the political and media wilderness. When the New York Times, in a March 2005 editorial, gave the new ballparks a backdoor endorsement—supporting them provided that the teams pay their own way—any hope of stopping the stadiums was lost. (Emphasis added)
I'm not so sure of his analysis. It was the battle over the West Side Stadium that wore out planning groups like the Regional Plan Association. Nor did Atlantic Yards, at least at the time, command so much public attention, though--given the vigor of the AY opposition and the presence of blogs like AYR and NLG--it's fair to say that the Atlantic Yards controversy produced much more homegrown media.
Posted by steve at 8:04 AM
August 6, 2009
CONVERSATION: THE SPORTS RECESSION
NewYorker.com
by Avi Zenilman
[NYer:] If I had, say 500 million or a billion dollars, and I wanted to buy a sports team, would it be worth it? Where do you think I could find value?
[Zimbalist:] Bruce Ratner wants to sell a piece of the Nets. Want me to call him up? I’ll tell him you’re interested.
There's actually much more to the interview, and we happily leave it to Norman Oder to dissect.
Atlantic Yards Report, The $6 billion lie goes unchallenged: forgetful sports economist Zimbalist gets gentle treatment in the New Yorker
A seemingly defensive Andrew Zimbalist, Forest City Ratner's paid consultant, gets gentle treatment from the New Yorker, which should've enlisted Neil deMause as the interviewer.
The online-only interview is headlined CONVERSATION: THE SPORTS RECESSION.
Q. You were a consultant to Bruce Ratner on the Atlantic Yards project—
A. I haven’t consulted with him since I wrote my last report, which I think was in 2004.
Zimbalist issued his main report in May 2004, just in time for a City Council hearing, then updated it in June 2005.
...Most importantly, Zimbalist's report relies on a bogus methodology: counting the incomes of new residents in a housing development. That methodology, coupled with Forest City Ratner's willingness to distort estimated tax revenues by adding them cumulatively as opposed to calculating present value (as is standard), contributed to the $6 billion lie.
Blatant hypocrisy
Zimbalist describes how stadium proponents distort the public debate:
One of the things that happens during a stadium drive is that the proponents go out and hire a consulting firm to come up with a predetermined conclusion that the stadium will be the cat’s meow for the local economy.They hire this company, and then they publicize the results of the study, and there might be three or four or five per cent of the community, swing voters, that say, “I might not like baseball or basketball or football, but there’s a hard study that says this will help the local economy.” Those studies are used to get the people sitting on the fence, but most of the people are voting yes because they love sports and want a team.
Other than the absence of an actual vote in New York, that's exactly what Forest City Ratner did. They hired the world's most famous sports economist, who still gets a pass, even though, putting Atlantic Yards aside, there's ample reason to be skeptical of his work: three times in one year his testimony was tossed out of court or disallowed.
Posted by eric at 10:36 AM
July 27, 2009
"Because it is shovel-ready construction": FCR's lame explanation for seeking federal stimulus funds for an essentially private arena
Atlantic Yards Report
It was one of the more astonishing exchanges at the informational meeting last Wednesday--Forest City Ratner's MaryAnne Gilmartin's explanation for why the developer has sought stimulus funds to boost its essentially private project.
Remember, the developer has lobbied for federal stimulus funds, and is almost certainly still lobbying for such help, even though former Empire State Development Corporation CEO Marisa Lago said at a May 29 state Senate oversight hearing that the ESDC hadn't sought such funds.
Why not? Because, as I note below--it's not a public project.
(Video shot by Jonathan Barkey; edited by Norman Oder)
“Can Forest City Ratner comment on why there have been public requests for federal stimulus funds to help with the construction of the arena?” asked moderator Craig Hammerman.
“It’s shovel-ready construction,” shouted Marie Louis of BUILD (Brooklyn United for Innovative Local Development), a Community Benefits Agreement (CBA) signatory.
Gilmartin at first looked a little uncomfortable with the question--perhaps because there's no good answer--but quickly recovered: “Because it is shovel-ready construction, and the fact of the matter is that the project, like other projects around the country, have suffered, based on the economic downturn, and it’s our responsibility to try to do what we can to make the project happen and to maintain its viability.”
Posted by lumi at 5:56 AM
July 17, 2009
A question for the Informational Meeting next Wednesday: how does the economic downturn affect tax projections?
Atlantic Yards Report
Forest City Ratner and the Empire State Developerment Corporation will only be answering questions submitted in writing at next Wednesday's informational meeting on Atlantic Yards, so don't bother raising your hand.
Here's a good question from Norman Oder, which we expect will garner a a stock non-answer:
How, given the downturn in the economy, the depressed office market in the city, and the numerous unsold and stalled condos in places like Williamsburg, can the expected office tower and 1930 condos (along with 4500 rental units, half of them at subsidized rents) be built on the projected ten-year schedule?
And, if not, how does that change the projections for tax revenues from Atlantic Yards, which the ESDC said last month would be higher than initially projected?
NoLandGrab: The real answer is that these types of projects NEVER come close to the projected tax revenues.
However this is proof that Atlantic Yards is getting dumberer: now we're supposed to believe that tax revenue projections have increased, even though the project has been scaled down.
Posted by lumi at 5:28 AM
July 13, 2009
Goodbye corporate handouts: How Arizona's "Taj Ma-mall" could end corporate welfare
Enter Stage Right
By Darcy Olsen
Congratulations Bruce Ratner! Your Atlantic Yards megaproject is now a national poster project for corporate handouts:
Feeling outraged about the billions of dollars pouring into GM and Chrysler's private pockets? Now take a look in your own backyard, where state and local subsidies cost over $50 billion annually—from Brooklyn's Atlantic Yards to everyday big-box retailers. Taxpayers have a long tradition of losing corporate handout battles, but a new court case could bring these boondoggles to a screeching halt: Arizona's Taj Ma-mall.
The article explains that many state constitutions have tougher provisions than the federal constitution for protecting against corporate giveaways.
For example, one of the points being argued in the case just accepted by the State Appeals Court has to do with the constitutionality of using eminent domain for uses other than low-income housing.
Posted by lumi at 5:55 AM
July 6, 2009
She could do better.
Examiner.com
By Matt Arnold
One commentator just woke up to Atlantic Yards developer Bruce Ratner's penchant for bait-and-switch (whadya expect from someone who still thinks that the basketball arena is a "stadium?"), and is having trouble with the idea that taxpayers should be forced to come up with more for less:
The strange thing is that after duping us, Ratner is coming back to New Yorkers and asking for a deal on the financing--on top of the millions of dollars in public support he’s already getting. And the Bloomberg administration appears to be caving in to his demand. It would be one thing if Ratner was financing this whole project himself, had the permits he needed, and decided that he was going to do what he liked with his money. But in this time of severe budget crisis, he’s asking us to dig deeper into our pocket so that he can build this monstrosity.
Posted by lumi at 5:34 AM
July 2, 2009
Atlantic Yards, 2010: the push for a second round of stimulus funds (I speculate)
Atlantic Yards Report
Watchdog reporter Norman Oder is getting the sneaking suspicion that Atlantic Yards developer Bruce Ratner is still after federal stimulus dollars:
Despite the statement by ESDC CEO Marisa Lago at a May 29 state Senate hearing that no federal stimulus funds had been sought for Atlantic Yards, the developer is still actively lobbying in Washington.
In 2006 and 2007, Forest City Ratner paid $200,000 a year to former Senator Alfonse D'Amato's firm, Park Strategies, to fight against restrictions on the use of eminent domain, as the Observer reported.
In 2008, FCR paid D'Amato only $80,000. This year, FCR is on pace to pay D'Amato double that sum, $160,000, at least based on the first quarterly filing.
And, as the Observer reported, the target is stimulus funds. If a new round of federal funds becomes available next year--and the Obama administration is keeping an open mind--Forest City Ratner might be arguing that the public should help with the infrastructure it promised.
Posted by lumi at 6:59 AM
June 26, 2009
DC Metro Crash Exposes Funding Strikeout
The Nation
by Dave Zirin
Nation sports editor Dave Zirin connects the dots among stadium giveaways, shortchanged infrastructure, mismanaged transit agencies and their catastrophic consequences. Monday, it was the District of Columbia. Next time, will it be New York City?
Who will be the next to die because our cities spend money on sports stadiums instead of basic infrastructure?
Two years ago, my former college town, the Twin Cities of Minneapolis-St. Paul, was the site of thirteen needless fatalities when the Interstate 35W bridge collapsed. The tragedy occurred the same month that ground was broken on a $500 million stadium. Now, a mere ten minute walk from my home, two Washington, DC, Metro trains collided, killing nine and sending more than seventy-five to the hospital.
...This is just too much to bear. My shock became anger as it became clear that none of these people had to die, that no one had to be hurt. This accident was about as predictable as the setting sun. The wreckage by my house is not an accident site. It is a crime scene. And it happened for one reason: the twisted policies of the underfunded Washington Metropolitan Area Transit Authority. The WMATA gets no dedicated federal funds despite the fact that it serves thousands of federal workers. In fact, it has no dedicated source of funds at all, depending on fares and ads for three-fifths of its budget.
The rest is a pittance from the District of Columbia, Maryland and Virginia, creating an underfunded, overstretched system called by the Brookings Institution "deficits by design."
All the dirty laundry that Metro riders catch whiffs of on their daily commutes is now in plain view. Employees have told the Washington Post that the first two cars of the striking train were two months overdue for maintenance on "braking components." In addition, the trains involved in the collision were recommended to be taken off the tracks altogether or significantly retrofitted back in 2006.
...Even worse, we now know that Jeanice McMillan probably pressed the emergency brake and it did not respond.
The Metro has now become our broken levee: an utterly preventable tragedy if only people in government had the will to do the public good. And as in New Orleans, whose Superdome sucked up public money better spent on flood control, if publicly funded stadiums hadn't become a substitute for urban policy, we wouldn't be mourning today.
The boondoggle of government-funded stadiums is just one example from a society that provides handouts to billionaires at the expense of ordinary citizens' needs.
NoLandGrab: On Wednesday, a spokesperson said the MTA was "pleased that we were able to reach an agreement with FCRC that acknowledges the current economic situation while still protecting the MTA’s transportation and financial interests."
Will that deal protect the MTA's riders, too?
Posted by eric at 5:32 PM
June 13, 2009
Celebrity Architect Dropped From Urban Renewal Scheme
Ground Report
by Richard Cooper
The exit of Frank Gehry from the proposed Atlantic Yards project provides an opportunity for Libertarians to remind us that they've never cared for this boondoggle.
Celebrity architects are nothing new in eminent domain and corporate welfare schemes. The new New York Times headquarters building was designed by Renzo Piano. Their partner in this scheme, which I dubbed "Time$cam" , was Forest City Ratner. Not suprisingly, the Times has supported Atlantic Yards. (See "NY Times Building Climbers Protest Wrong Causes" http://groundreport.com/articles.php?id=2862703 .
The financial difficulties of the Atlantic Yards scheme which led to Gehry being dropped by Forest city Ratner come as no suprise. See "Atlantic Yards Eminent Domain Abuse Scheme Confronts Reality" http://groundreport.com/articles.php?id=2857809.
As a Libertarian, I believe that corporate welfare and eminent domain are legalized theft. Because Libertarians believe in personal responsibility, I must regard Frank Gehry as an accessory profiting from the theft of land from the property owners and the theft of money from the taxpayers for this project. This comes despite my admiration for many of his designs including that for the Nets Arena for basketball. Let us hope that professionals like architects, bankers, lawyers, planners will take a pledge not to be accessories to the legalized crime of urban renewal.
Posted by steve at 8:41 AM
June 4, 2009
Study shows Atlantic Yards NBA arena project could cost city big-time
NY Daily News
By Jotham Sederstrom
Poof! The arena's slim $25M net benefit to NYC just evaporated. Now it looks like the arena is going to cost the city:
The Independent Budget Office released data Friday suggesting that the rising costs of a planned NBA basketball arena and increased public funding have chipped away at an estimated $25 million in revenues projected for the city.
"It now appears that given the additional city contributions and the higher cost of the arena that the net fiscal impact from the public investment for the arena will be negative," said Independent Budget Office Deputy Director George Sweeting.
The findings are a reversal from a 2005 Independent Budget Office analysis, which had determined that ticket sales and other spending in Brooklyn by out-of-towners coming to Nets basketball games would provide an estimated $25 million in tax revenues over 30 years.
With city funding to the project skyrocketing from $100 million to $205 million over the past four years, the economic benefit to the city has diminished significantly, Sweeting said.
NoLandGrab: Those original findings were specious to begin with, and counted on a certain percentage of the dwindling NJ fanbase to make the trip to Brooklyn and for players to live and pay income tax in NYC.
What was a joke has now graduated to a farce. Hopefully, the IBO will eventually present an honest accounting of actual benefits and losses to the city, but we're not holding our breath.
Posted by lumi at 5:57 AM
May 22, 2009
DDDB PRESS RELEASE: Ratner Losing Mayor's Support for Atlantic Yards
Bloomberg Pulls Plug on More Subsidies for Project
New York, New York – New York Mayor Michael Bloomberg said on Wednesday that the city would not give additional taxpayer subsidies to developer Bruce Ratner for his proposed Atlantic Yards project in Brooklyn.
Ratner has been lobbying the city over the past many months for more taxpayer subsidy, on top of the $205 million in direct taxpayer cash the city has committed to the developer’s beleaguered project.
The Brooklyn Paper broke the news about the Mayor’s comments:
"We've done everything,” he said in response to a reporter’s question at his daily availability on Wednesday. “We’re going to have a tough time surviving balancing our budget."
The mayor did add that the city needs the project, but said, "We’re not putting money in any of these projects. We're going to invest our money in better schools and in safer streets and in better parks and everything else."
"From the sound of the Mayor’s comments, Bruce Ratner has lost the Mayor's support for Atlantic Yards. Ratner was desperate for more money from the city, his rejection is a big blow for the project's viability," said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. "We applaud the Mayor for not allowing any more taxpayer money to feed the Atlantic Yards money pit. The Mayor rightfully sees far greater priorities for investment than Ratner’s failing Atlantic Yards project, an $800 million luxury arena where there is an arena glut, and broken promises to construct 'affordable' housing."
The city had committed to a $205 million direct taxpayer subsidy to the project, a portion of the well over $1.5 billion in taxpayer and government backed financing, breaks, exemptions and sweetheart land deals. It is unclear how much the City has already paid Ratner, but $100 million of the $205 million inexplicably reimburses Ratner for the properties he bought under the threat of eminent domain on the project's "arena block,” giving him all of that valuable land nearly for free.
DEVELOP DON'T DESTROY BROOKLYN leads a broad-based community coalition fighting for development that will unite our communities instead of dividing and destroying them.
DDDB is 501c3 non-profit corporation supported by over 4,000 individual donors from the community.
Posted by eric at 8:41 AM
May 21, 2009
Bloomy to Bruce: Enough already
The Brooklyn Paper
By Mike McLaughlin
The city has already pledged $230 million for infrastructure and land-acquisition costs at the embattled arena and skyscraper [Atlantic Yards] project — but Bloomberg dashed Ratner’s hopes for more.
“We’ve done everything,” he said in response to a reporter’s question at his daily availability on Wednesday. “We’re going to have a tough time surviving balancing our budget.”
The mayor’s thriftiness is bad news for Forest City Ratner, which in recent months had been lobbying for more taxpayer aid from the city and state, and even for a share of the federal stimulus spending to help revive construction on the $4-billion complex in Prospect Heights, where work has been stalled since December because of the current financing crunch.
Posted by lumi at 6:37 AM
May 19, 2009
Looking back at that IRS letter: did ESDC stretch the truth about the project timetable?
Atlantic Yards Report
Norman Oder explores another unanswered question:
So, if Empire State Development Corporation (ESDC) CEO Marisa Lago thinks Atlantic Yards would take "decades," as she said in April, when did she and other ESDC officials come to that unsurprising conclusion?
Because the ESDC said something very different last year to the Internal Revenue Service (IRS) when it was lobbying to get an exemption for Atlantic Yards as the IRS planned to tighten rules regarding tax-exempt bonds.
Somehow, during the course of a year, the project timeline went from "the Arena is anticipated to be completed in 2010, and the balance of the Project is expected to be built over the next decade," to the project will take "decades."
It begs the question, what did the ESDC know and when did they know it?
Posted by lumi at 6:20 AM
May 6, 2009
Yankee Stadium financial controversy back in court
The controversy over the financial details of the new Yankee Stadium headed back to court, with State Assemblyman Richard Brodsky going mano-a-mano with lawyers for the Yankees in hopes that the judge will force the team to release financial documents subpoenaed by the state legislator.
One point at issue is the valuation of the land. From an Albany Times Union article:
[Brodsky] was joined in court Tuesday by fellow Assemblyman James Brennan of Brooklyn, who chairs the Cities Committee. Among other arguments, Brodsky questioned the failure of accessible ticket prices and what he called an admitted violation of law in the tax assessment for the stadium grounds, which used to be a city park.
Either the land value was inflated so that the City could issue more tax-free bonds, or lowballed when the team determined the cost of the replacement park land. An examination of the "comps" used by the NYC Department of Finance suggest the former. If not for the fact that the Yankees had to replace the park land, the inflated value might not have come to light.
The same type of tax-free bond financing has been approved for Bruce Ratner's planned arena at Atlantic Yards. Watchdogs will be keeping a close eye on how NYC officials will justify the cost of the land under the arena.
Posted by lumi at 5:43 AM
May 4, 2009
Gary Bettman: Coliseum 'unrealistic' for Isles
NY Newsday
Hey, Atlantic Yards isn't the only misbegotten mega-plan mired in its own excess!
NHL commissioner Gary Bettman went to bat for the NY Islanders' owner, Charles Wang, who is seeking approval for his mixed-use Hempstead megaproject that is to include a convention center, the tallest skyscraper on "The Island," a shopper's paradise and a new arena.
NoLandGrab: These days, sports team owners not only want a new venue (citizens are no longer willing to foot the entire bill), so the owners are seeking the entire high-density mixed-use real estate boondoggle. If not for their limitless ambition, Wang could have already had his approval for a new arena to replace the one that everyone agrees is begining to look like THE Coliseum, and NJ Nets owner Bruce Ratner might have had shovels in the ground in Brooklyn.
Despite supporting Wang's unwelcome megaproject, Bettman went on to state the obvious; the brand-new Newark Prudential Center is already open while the Nets are still languishing in the Meadowlands:
Bettman also was asked about the possibility of the NBA's New Jersey Nets moving from the Izod Center at the Meadowlands to join the Devils at the Prudential Center in downtown Newark. NBA commissioner David Stern told APSE the Nets are fine where they are, but Bettman had a different view.
"I don't understand why the Nets aren't playing at Prudential Center now," the NHL commissioner said. "The Devils are drawing, and the atmosphere is great. It has to be costing the State of New Jersey a boatload of money to keep [Izod Center] open. I hope, at some point, the Nets decide to go there."
Posted by lumi at 5:50 AM
April 29, 2009
Finance Commissioner Stark resigns, but the Yankee Stadium issue is ignored
Atlantic Yards Report
More evidence that sex sells. Starkgate has resulted in the resignation of the NYC Finance Commish, but the papers are focusing on her questionable relationship with a subordinate, not the dubious Yankee Stadium land valuations they cooked up, possibly on orders from the Mayor's office, at the expense of taxpayers:
There's a brief mayoral statement. But none of the coverage so far--see, for example, the Times, Daily News, and Crain's--raises any questions about what may be the most significant cloud over Stark and her former subordinate (and current consort) Dara Ottley-Brown: their role in the swift and curious reassessment of the Yankee Stadium site.
NoLandGrab: Look for similar land-value shenanigans for Bruce Ratner's Atlantic Yards... hopefully without the sex scandal, though that would liven up the public conversation over the Prospect Heights megaproject.
Posted by lumi at 5:09 AM
April 26, 2009
Time to rethink arena revenue assumptions?
Atlantic Yards Report
A reader points me to pollster Zogby International's blog, in a post headlined Box Seats or Paying the Rent?:
The new Yankee Stadium is making news, but not for the reasons team management wants. In addition to building a stadium that, after a few games, seems to be allowing too many home runs, empty seats in prime viewing locations are painfully obvious.According to the Associated Press: “At the new Yankee Stadium, the best seats in the house have turned out to be the emptiest. The most expensive spots in America’s costliest ballpark have become an embarrassment packing a financial sting to the proud New York Yankees, as the Legends Suite section in the infield has been filled only once in the six games since the $1.5 billion stadium opened last week."
...A Zogby Interactive poll done on Feb. 23-24 found 70% saying have cut back on entertainment, recreation and eating out at restaurants. We reported then that: “The slashing of entertainment budgets isn’t just taking place in poorer households - around 70% of those in all household income brackets, including those with more than $100,000 in household income, said they have reduced their spending on entertainment and at restaurants in the past year. Younger adults are most likely to say they have cut back - 76% of those age 18-29 are spending less on entertainment, compared to 55% of those age 65 and older who say the same.”
Are the Yankees, and perhaps other pro teams, out-pricing the market for seats at games? Would you pay those prices to watch a ballgame?
Here's Neil deMause on "Seatgate."
The AY relevance: even if an arena could get funded (assuming lawsuits are cleared), all the assumptions about revenue require a rethink.
Posted by steve at 7:50 AM
April 23, 2009
Judge pressures Yankees to show stadium documents
AP, via Newsday.com
By Michael Gormley
While the City and State have dug in their heels, refusing requests from watchdogs for financial documents revealing the projected cost of Bruce Ratner's Atlantic Yards, there's a similar side-drama going on with the new Yankee Stadium.
A New York judge is ordering the Yankees to give him a catalog of financial records sought by state lawmakers investigating the use of public funds to help build the team's new stadium, or prove the data should remain private.
Two Assembly committees subpoenaed the records in January in the escalating fight with the team, but the Yankees withheld some key documents involving ticket prices and why some city officials received luxury box tickets
NoLandGrab: Common sense would dictate that the taxpayers ought to have knowledge of the finances of a project if taxpayer money is being used, but common sense is not so common.
Posted by lumi at 5:19 AM
April 22, 2009
Yankees handing over $68K in back rent
The New York Yankees agreed to pay the city some of the back rent owed on their old stadium, but negotiations on another $64,000 continue.
AP via Crain's NY Business
The team that committed $423 million to just three free agent contracts this past off-season, raised ticket prices 76%, and is receiving, according to Field of Schemes author Neil deMause [PDF], north of a billion dollars in public subsidies for its new ballpark, is haggling with the city over $64,000. Is it any wonder the team is cursed?
The Yankees say they'll pay New York City $67,574 in back rent on their old stadium.
Under its rental agreement, the baseball team can deduct some maintenance costs from its rent.
An audit being released Wednesday by Comptroller William Thompson found improper deductions, including some payroll, security and stadium repair costs.
The team and the city are still haggling over another $63,888 in rental credits from last year.
NoLandGrab: $64,000? Pay your #@%&ing tab!
Posted by eric at 12:34 PM
Is This Seat Taken? In Front Rows of New Ballparks, No
The New York Times
by Ken Belson
More evidence that the financial premises underlying Bruce Ratner's Atlantic Yards project, which were shaky to start with, now bear no relation to reality.
After spending $2.3 billion on new stadiums packed with suites, restaurants and the latest technology, the Mets and the Yankees expected fans to embrace their new homes and pay top dollar for the privilege. Almost every team that has built a new stadium in the recent past has seen an immediate surge in attendance.
Instead, the Mets and the Yankees face a public relations nightmare and possibly millions of dollars in lost revenue after failing to sell about 5,000 tickets — including some of the priciest seats — to each of their first few games after last week’s openers.
The empty seats are a fresh sign that the teams might have miscalculated how much fans and corporations were willing to spend, particularly during a deep recession. Whatever the reason, the teams are scrambling to comb over their $295- to $2,625-a-seat bald spots.
...But the slow start in New York is striking considering how much the teams here spent to build and promote their parks. Like airlines that break even on economy tickets and rely on first-class travelers to turn a profit, the teams need to sell their most exclusive seats to help repay the hundreds of millions of dollars of tax-free bonds they issued to finance their new parks.
NoLandGrab: Let's not forget how much the taxpayers kicked in, too. And all this stadium-building is supposed (wink, wink) to have a net positive effect on the city and state treasuries.
Posted by eric at 11:05 AM
April 19, 2009
Displaced by the Yankees, Some Bronx Athletic Teams Go Homeless
The New York Times
By Manny Fernandez
What happens when government is too eager to sacrifice the public needs for those of a privately-held sports franchise? There's no need to wait for the construction of Atlantic Yards to find out. The miserable results of this kind of experiment are on display right now in the Bronx.
The official opening of the new Yankee Stadium last week was greeted by rave reviews from many fans. But some parks advocates, community leaders and neighborhood residents have been less enthusiastic, frustrated by the loss of ball fields as well as the construction delays and rising costs of replacement parks.
The new stadium was built across the street from the old one on Macombs Dam Park and a portion of John Mullaly Park. State and federal law dictates that parkland removed from public use must be replaced by parkland of equal or greater value. The city’s Parks and Recreation Department originally said seven of the eight replacement parks planned for the area would be completed in time for opening day at the new stadium. But the agency later pushed back the schedule for some of the parks, and a report in January by the city’s Independent Budget Office found that the cost to replace the two parks had climbed to nearly $195 million, up from a 2005 estimate of $116 million.
NoLandGrab: Critics of the Yankee Stadium deal saw these problems approaching years ago. Then Bronx borough president Adolfo Carrión Jr. worked with the Bloomberg administration to squelch public discussion by effectively replacing Community Board 4 members who voted against building the new Yankee Stadium on public land. Moves to make the proposed Atlantic Yards a State project similarly kept the public from having any say in that project.
Posted by steve at 7:04 AM
April 15, 2009
The latest cloud over Finance Commissioner Stark: a romance with the (former) assistant in the middle of the Yankee Stadium controversy
Atlantic Yards Report has it all... sex, power, money!
Though the latest City Hall controversy reads like a steamy soap opera, Norman Oder explains how it runs straight through the scandal over the Yankee Stadium land valuation, which was likely jiggered to maximize the amount of tax-free bonds available for the construction of the project.
What does this have to do with Atlantic Yards? The city plans on issuing the same tax-free bonds for the Nets arena, but with the Yankees-City Hall financial scandal blowing steam, will watchdogs put a damper on free lunch for Bruce Ratner?
City Finance Commissioner Martha Stark is under a cloud again, this time for having a romantic relationship with a former assistant commissioner. Mayor Mike Bloomberg, formerly a staunch defender of Stark, says the city is looking into whether the relationship began while Dara Ottley-Brown was employed by Stark.
However, as I note below, no one is yet looking into the potential connection to an even more questionable episode: Ottley-Brown served as the Department of Finance's (DOF) point person in ensuring that the land under the new Yankee Stadium would be assessed--re-assessed, it turned out--at a figure sufficient to generate the foregone taxes to be repaid by PILOTs (payments in lieu of taxes).
And the DOF faces similar challenges in ensuring that the assessments of the Atlantic Yards arena site are sufficient to generate PILOTs sought by the developer.
Posted by lumi at 5:34 AM
After layoff threat, Bloomberg talks jobs
MetroNY
By Patrick Arden
From a sidebar, headlined "Long waits for high-profile projects," in an article about NYC's efforts to create jobs:
Moynihan Station won’t get stimulus aid because it’s not “shovel ready,” said Marisa Lago of Empire State Development Corp. Atlantic Yards is “challenging,” she added. Tax-exempt bonds for the Nets arena must be secured before an IRS deadline at the end of this year.
Posted by lumi at 4:43 AM
April 13, 2009
High-Dollar Stadiums In A Low-Rent Economy
All Things Considered
By Mike Pesca
Both New York baseball teams christen their deluxe new stadiums this week: The Mets on Monday and the Yankees on Thursday. But these high-dollar baseball palaces — designed to be financed in part by luxury suites and swanky seats — are arriving at what may be the worst economic time since Lou Gehrig retired.
Reporter Mike Pesca does a fairly good job of not letting Mayor Bloomberg off the hook, after Bloomberg tries to gloss over the cost of the ballparks to the taxpayers as a "relatively small amount for infrastructure," running into the hundreds-of-millions of dollars. However, Pesca totally missed the fact that future taxes are being divereted to paying back the bonds (sorta like striking a deal with the city to divert your property tax to help pay off your mortgage). This is significant because Bloomberg has also repeatedly asserted that the arena that Bruce Ratner wants to build is being privately financed.
Posted by lumi at 5:19 AM
April 9, 2009
Tax Foundation on Yankee Stadium: "the House the IRS Built"
Atlantic Yards Report
Have a quick look at how PILOTs (Payment in Lieu of Taxes) were fudged to benefit the Yankees' new ballpark (at a loss to taxpayers), because Bruce Ratner is poised to do the same thing in order to take advantage of low-cost financing for a new basketball arena.
The Tax Foundation's new report, From the House That Ruth Built to the House the IRS Built: New York City and New York Yankees Abuse PILOTs to Finance New Stadium, draws on reports from Assemblyman Richard Brodsky and hearings held by Rep. Dennis Kucinich.
The same criticisms could be launched at the Atlantic Yards arena, should it be built, given that the same regulations that allowed the financing scheme for Yankee Stadium were grandfathered in for AY.
Based on calculations from Brodsky, the $942 million in initial bonds would save the team between $231 million and $471 million--though the federal government bears the brunt of the cost. "Without this generous subsidy, it is unlikely that such an expensive stadium could have been built," the report states.
Click here for the rest of the article, in which Norman Oder breaks out the parts of the report that explain how and why this scheme was carried out.
Posted by lumi at 5:22 AM
Atlantic Yards YES! City Employees NO!!
While Mayor Bloomberg remains committed to subsidizing Bruce Ratner's Atlantic Yards plan to the tune of $205 million in direct cash payments (with more to come if development company CEO Charles Ratner has his wish), city employees are facing the possibility of layoffs:
AP via CrainsNY.com, City agencies trim budgets, layoffs likely
New York City agencies are being asked to cut their budgets again, and that likely means layoffs.
Mayor Michael Bloomberg's budget director, Mark Page, told agency heads in a letter Wednesday that they must slash their budgets again for next fiscal year, which begins in July.
Mr. Page said that likely means layoffs, because there isn't much left to cut.
Since when does sinking money into Bruce Ratner's Atlantic Yards plan, while the City is struggling to retain current jobs, amount to a net gain for New Yorkers?
Posted by lumi at 4:23 AM
April 6, 2009
Fair is Foul
The Brooklyn Rail
by Theodore Hamm
Rail publisher Ted Hamm critiques Mike Bloomberg's defense of the rich, and his lavishing of public funds on rich sports franchise owners.
Already flush outfits like the Yankees and Mets have received $1.2 billion in combined public subsidies to build new stadiums; and if the Atlantic Yards project goes forward, it will cost at least another $700 million (or more) in taxpayer support. In the mayor’s eyes, heavily subsidized private development is a good thing. Meanwhile, increasing taxes on the highest earners is wrong, because it may cause them to flee to Connecticut.
It’s a decidedly elitist vision coming from a determinedly anti-populist figure. Even so, most would say that Bloomberg’s reelection chances are pretty good—mainly because his threats to spend whatever it takes to get reelected have already knocked a leading contender out of the race, and also because his approval rating remains high. Yet the boom years are over, and the consequences of the frenzy of overdevelopment are only just beginning to sink in. So stay tuned.
Posted by eric at 6:28 PM
Wisdom from 1996...
Develop Don't Destroy Brooklyn
The New York Times fired up its way-back machine on Sunday to excavate a 13-year-old op-ed piece about, of all things, another billion-dollar sports venue boondoggle. Back then it was a new Yankees stadium on the West Side projected to hit the nine-figure mark, and Roger G. Noll, then a Brookings Institution visiting fellow, offered this pithy summary:
Independent studies of sports facilities invariably conclude that they provide no significant economic benefits. A sports team does increase overall income in a community slightly, but the increase never offsets the stadium's financing and operating costs. And because a team has relatively few (but very highly paid) employees, it usually causes overall employment in a city to fall because it can drive other entertainment businesses to cut back or close.
Stadiums are bad investments, which is why the teams themselves are never willing to pay for them. New York City would generate more cash by putting the money in a savings account.
The next year Noll went on to co-edit an influential and widely-praised book called Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums, which with considerable rigor came to the exact same conclusion as his op-ed. Noll's co-editor on the book was none other than Andrew Zimbalist. Four years ago, in a report written for Forest City Ratner, Zimbalist surprised observers by switching sides to conclude that Atlantic Yards would in fact be an economic benefit.
We've included the original op-ed piece after the jump.
Op-Classic, 1996: Wild Pitch
By Roger G. Noll
WASHINGTON
Even at a time when major league sports have become a cartoon of financial excess, the proposed new home for the Yankees is breathtaking in its audacity. Excluding land value, a multipurpose mausoleum on Manhattan's West Side would cost a billion dollars.
The debate has centered on two questions: Are sports facilities economically worthwhile? And should the stadium be single-purpose or multipurpose? A more fundamental question is why cities provide large subsidies to teams in the first place.
The Yankees have little economic effect on New York City. True, most fans would never visit the South Bronx were it not for the team. But few tourists come to New York just to see the Yankees. Thus, the Yankees generate a huge increase in economic activity within 100 yards of the Stadium, but not within the metropolitan area.
Nearly all spending at the Stadium is simply shifted from other forms of entertainment like restaurants and movies. Yes, the Yankees do draw suburbanites into the city, but many of these people would spend money in Manhattan or go to Mets games if the Yankees were not an option.
The city does make money by taxing tickets and concessions, but such revenues wouldn't come close to covering the Stadium's debt service. Even if the Jets agreed to play their home games on the West Side and the two teams combined drew four million fans a year, the city would need to collect an unrealistic $20 in taxes from each fan just to meet the mortgage payments.
Independent studies of sports facilities invariably conclude that they provide no significant economic benefits. A sports team does increase overall income in a community slightly, but the increase never offsets the stadium's financing and operating costs. And because a team has relatively few (but very highly paid) employees, it usually causes overall employment in a city to fall because it can drive other entertainment businesses to cut back or close.
Stadiums are bad investments, which is why the teams themselves are never willing to pay for them. New York City would generate more cash by putting the money in a savings account.
Assuming that New York decides to build the stadium, a multipurpose facility would make the most financial sense -- if the Jets and Yankees would agree to share it, which is unlikely. Single-purpose stadiums are more attractive and draw more fans. And the teams want their own stadiums so they can control and profit from other events in them. The city, of course, gains nothing by letting the teams have their way.
Why do cities pour hundreds of millions into new stadiums? With intense competition for sports franchises, not even New York can keep a team without subsidizing it. New Jersey and New York have at various times fought over the Giants, Jets, Yankees and Mets. The sad thing is that the states need not be competitors: Fans could easily support a third team in both football and baseball. But each league is a monopoly, doing what monopolists do best: making the product scarce to hike up the price.
There is a far cheaper way to keep the Yankees. Bribe them. A new stadium could give the Yankees an additional $10 million in profits each year. So instead of spending $80 million annually to finance and operate a new stadium, New York could just hand the Yankees $10 million. Or, even better, the city could pay $100,000 for each game won, with a million-dollar bonus for winning the pennant.
This plan would save the city money, improve the Yankees' bottom line and benefit fans, who would be less likely to have a team that collapsed in the stretch.
Roger G. Noll was visiting fellow at the Brookings Institution at the time of publication.
Posted by eric at 6:08 PM
April 4, 2009
Breaking With History in the Bronx
The New York Times
by Jim Dwyer
The About New York columnist hearkens back to the days when pro sports teams actually paid taxes.
The pharaohs would be at home in the new Yankee Stadium, if they could peel enough gold leaf off their sarcophagi to cover the costs of tickets. The monumentality of the place goes on display this weekend for the first games.
In dimensions and decor, the new stadium, handsome and comfortable, is meant to evoke the old one. But the resemblance is only concrete deep. This is not history, but a costume party, a rigging of familiar geometry. It disguises a radical departure from New York’s baseball history: the embrace of public subsidy — around a billion dollars when all the costs are added — for private wealth.
The first incarnation of Yankee Stadium opened in 1923. The owner, Jacob Rupert, bought private land, raised private funds for the construction, and maintained the place with money he made in ticket sales. Rupert and his successors paid taxes on the property: the land alone was assessed at $1.75 million in 1923. By 1970, the stadium and land were valued at $5 million.
If you were to page through the annual city tax rolls, you would find the valuation of Yankee Stadium — as well as the Polo Grounds in Manhattan and Ebbets Field in Brooklyn, the homes of the Giants and Dodgers — listed right alongside the other big properties in the city, like Rockefeller Center, the Metropolitan Life building and Loews Paradise theater.
What do those old tax rolls tell us?
Click through for the answers.
Posted by eric at 10:38 AM
Baseball and Bailouts
Condé Nast Portfolio
by David Levine
Does the opening of new ballparks for the Yankees and Mets herald the fall of the stadium boondoggle era?
Three years ago, at the height of the real estate boom, the wealthiest team in baseball persuaded the city of New York to help it build a luxurious and expensive ballpark. The city provided land for the stadium rent-free. It issued bonds to pay for the park’s construction and convinced the Internal Revenue Service to waive any taxes associated with the project. And when Yankees management needed more money to put the finishing touches on their luxe new marvel (to install, among other things, 1,100 flat-screen televisions), they came back to the city and got what they wanted. Viewed through the dark lens of our current recession, the Yankees deal seems absurdly lavish. Certainly, at a time when America’s largest city is bleeding jobs and slashing services, there are better uses for its money than coddling A-Rod and one of the richest teams in professional sports.
But the stadium plan is more instructive now than ever. What happened in the Bronx is reminiscent of what’s happened between teams and towns all across the country in the past decade or so, albeit on a less expensive scale. And it was, in a way, an early illustration of the flawed philosophy that has marked the recent bailout binge: If we open the public coffers to private industry, the thinking went, bounty will follow. Since then, the notion of public funding chasing private companies has become national policy, and the fallout grows uglier by the day. Wall Street received big bailout money (and was dragged before Congress to justify how it managed to pay bonuses even as consumer lending continued to stagnate). Detroit CEOs jumped on the bandwagon too, submitting their own restructuring plans in exchange for government money they hoped would stave off the insolvency of the American auto industry.
So far, none of the bailouts seem to be working. Federal handouts meant to translate into increased lending appear only to have kept the banks from collapsing; Detroit’s bailout money looks like it will just delay the inevitable.
...In the end, the big bailout may have been the only solution we could have reached. If we had let the banks fail, who knows where we’d all be today? But the thing that unites both efforts—the bailout on a large scale and the stadium on a small one—is our own faulty thinking: a philosophy that held that if we placed the public trust and funds in private hands, it would lead us to plenty.
Now, though, as questions arise and anger abounds over just how all of these firms are spending our money, perhaps the thinking has finally changed. It’s no longer such a given that industry knows best. And as improbable as it may seem, we might one day look at that edifice newly erected in the South Bronx in a different sort of light: not just as a glitzy new ballpark built at the end of an epic American boom, but as a brick-and-mortar remnant of a very old way of thinking.
Posted by eric at 9:40 AM
April 2, 2009
Past Will Touch Costly New Homes of Yankees and Mets
The New York Times
by George Vecsey
In the age of Madoff, in the age of bailouts, in the age of layoffs, comes the unprecedented spectacle of not one, but two heavily subsidized baseball stadiums opening in New York in the very same week.
...Were these new places really necessary? Yankee Stadium was cramped and outmoded but quite awesome. Shea Stadium was a horror, but it was the Mets’ fans beloved horror. Knowing what we know now about the economy, we surely could have lived with them indefinitely.
The main goal became turning ballparks into resorts, land cruises designed for A.I.G.-bonus-recipient wallets, the games lasting long enough to wring more twenties and hundreds out of the faithful.
Bread and circuses. Shrimp and pennant races. Luxury boxes and follies. Laugh and cry.
...Now we have these swanky new joints. The Mets and the Yankees have made their deals with the devil, the luxury-box trade.
Posted by eric at 3:30 PM
March 28, 2009
Atlantic Yards Submitted for Stimulus Spending
Nets Daily
Atlantic Yards, troubled but alive, has been nominated for federal stimulus money, according to a list prepared by New York State. The question is by who. Earlier, it was believed the Empire State Development Corp., the state entity behind the project, had nominated it. Late Friday, the governor’s office said a private citizen had suggested the funding; the ESDC had not.
Posted by steve at 6:06 AM
March 27, 2009
Correction: Yes, Atlantic Yards has been submitted for stimulus funds, but not by ESDC
Atlantic Yards Report
Norman Oder posts a "mea culpa" in which he explains how he jumped to the conclusion that federal stimulus funds were requested for Atlantic Yards by the ESDC.
I contacted Erin Duggan, who's handling press for the stimulus package, who responded, "That is a very draft list of the requests that have come in. That communication in particular was from a citizen, and was not any official request for the project. We have no requests for funding for Atlantic Yards."
Posted by lumi at 7:11 PM
Yes, Atlantic Yards has been submitted by the ESDC for stimulus funds, but is it eligible?
Atlantic Yards Report
It seems like Bruce Ratner's subsidy-laden Atlantic Yards megaproject magically made it onto NY State's "Second Draft List" (it wasn't on the first) for projects to receive federal stimulus funds:
Yes, apparently, Atlantic Yards is shovel-ready, according to the Empire State Development Corporation, which had gone back-and-forth on that issue.
A cryptic entry in the massive, 774-page Second Draft List - Project Proposals (PDF), issued March 25 by the New York State Economic Recovery and Reinvestment Cabinet, mentions AY but, in contrast to most other projects, without a budget or a description. (Click to enlarge)
NoLandGrab: Huh? A request for $0 for "Atlantic Yards" is supposed to be a placeholder, or something, for a figure to be filled in at a later date? You gotta be kidding.
Like everything Atlantic Yards, the actual amount of money that Bruce Ratner wants is another state secret.
Posted by lumi at 5:22 PM
Atlantic Yards YES! Jewish and Muslim Burial rites NO!!
While the City and State continue unfettered support for Bruce Ratner's Atlantic Yards plan, cuts in city services threaten burial traditions of observant Jewish and Muslim New Yorkers.
NY budget cuts could imperil Jewish burial rites
NEW YORK (AP) — New York City's medical examiner warns that proposed budget cuts could threaten Jewish and Muslim burial rites.
Dr. Charles Hirsch says the cuts could hamper his office in its efforts to expedite the burials of observant Jews and Muslims, whose religions call for burials within 24 hours of death.
The city has ordered the medical examiner's proposed operating budget of about $80 million for the fiscal year beginning in July cut by $7 million. And the state has threatened to withhold about $18 million in reimbursements.
Posted by lumi at 4:21 AM
March 24, 2009
DDDB Twofer Tuesday
Shouldn't Congresswoman Yvette Clarke Tax Bruce Ratner at 90%
Congresswoman Yvette Clarke was one of the co-sponsors of the approved House bill that would levy a 90% tax on the AIG bonuses. Those bonuses reportedly amount to about $165 milllion.
But Congresswoman Clarke has been silent about the counterparties AIG paid billions to, including Barclays Bank, which received $8.5 billion in taxpayer bailout funds funneled through AIG. Does she really oppose the bonuses but support AIG funneling 400 million bailout dollars to Bruce Ratner and his arena?
Barney Frank Had Said Naming-rights Would Be "Off Limits" For TARP Beneficiaries
New Jersey Congressman Pascrell's letter to Treasury Secretary Tim Geithner calls for an end to the Barclays naming-rights deal for Bruce Ratner's billion dollar Barclays Center arena because Barclays is a recipient of taxpayers' TARP funds funneled through AIG. Pascrell's letter reminds us of a quote from House Financial Services Committee Chair Barney Frank as reported in the February 13th New York Daily News:
...Naming rights deals will be off limits for firms taking taxpayer money in the next $350 billion installment of bailout money for banks and financial institutions.
"I'm confident you won't see anything like that going forward," in the next bailout round, Frank said.
We've gone forward. Now what?
Posted by eric at 12:59 PM
March 13, 2009
$70 Billion in Requests for $4 Billion in New York Stimulus Funds
ThePoliticker.com
By Eliot Brown
As part of the Paterson administration’s “Economic Recovery Update” on the stimulus spending, the governor’s office sent an email out this afternoon of a draft list of requests it has received for infrastructure-related federal stimulus funds.
The unranked list, a 461-page document with 11,842 projects, totals around $70 billion in requests, according to a spokeswoman for the governor’s office. The state has just $4 billion or so to dole out for infrastructure, said the spokeswoman.
Bruce Ratner's Atlantic Yards megaproject does not appear to be on the list; however, reporter Eliot Brown adds, "the list also notes that not all project requests have been included," so stay tuned...
Posted by lumi at 5:52 AM
March 9, 2009
Will we ever find out how much AY and arena now cost? More FOIL responses from NYC EDC and ESDC
Atlantic Yards Report
Norman Oder's FOIL request was... foiled again.
So I appealed the decision by the New York City Economic Development Corporation (NYC EDC), that the current cost of the Atlantic Yards project is exempt from disclosure because it is either a trade secret or its disclosure "would cause substantial injury to the competitive position of the subject enterprise."
And the answer from the appeals officer, Judy Fensterman: no way.
The Financial Materials, NYC EDC said in a letter, "contain proprietary assumptions, analyses and projections regarding the feasibility and performance of the Project and provide insight into FCRC's proprietary financial models and other business practices, which would be detrimental to FCRC's competitive position if disclosed."
And disclosure would frustrate ongoing negotiations "relating to all aspects of the Project." Those negotiations include "private parties."
...
But the cost of the project and the arena was a public matter when the project was approved in December 2006. If the cost is now a secret, that suggests that developers and public agencies can announce one set of numbers to the public, then turn around and keep the actual numbers secret.
NoLandGrab: You think that the total cost of the arena ought to be public knowledge, especially since the project is to receive hundreds of millions of dollars in City and State funding, and that, officially, the arena is to be owned by the public, though Nets owner and developer Bruce Ratner would lease it for A DOLLAR.
NOPE! This is a "trade secret" and would be "detrimental to FCRC's competitive position." Huh? Competitive with whom?
This doesn't pass the smell test and smacks of the fear of public outrage and political retribution if we knew what they really were up to.
Posted by lumi at 6:01 AM
March 7, 2009
PILOTS and Wall Street Journal Opinion Piece
Atlantic Yards Report
While some people think that the weekend is a good time to relax a little, for Norman Oder, it's an opportunity to look even harder at Atlantic Yards. Today he gives us a double dose.
At another Assembly hearing on the Yankees, PILOTs, taxes, ticket prices, and animosity
You'd think they'd be grateful, but it turns out that sport teams don't really like to acknowledge it when they receive public subsidies. This became obvious at yesterday's public hearing on Yankee stadium. Yankees president Randy Levine, when questioned by Assemblyman Richard Brodsky, insisted on saying at the same time that the Yankess received no subsidies, yet relied on PILOTS (payments in lie of taxes). PILOTS would be used to pay for the proposed Atlantic Yards project.
Brodsky contends that the public is paying for the stadium because the tax-exempt bonds are paid off by PILOTs. The Independent Budget Office (IBO), however, considers only the break on interest rates the subsidy.
"I’m going to read language from the IRS letter," Brodsky said to Levine, referring to a letter in which city officials wrote, "The city has determined to use its property taxes to finance the construction and operation of the stadium."
"Is that accurate," he asked.
"I don’t know, I’m not a bond lawyer," Levine demurred. "I’ve testified, over and over, in my opinion, the New York Yankees are paying every cent of construction of the new Yankee Stadium." He noted that the Yankees do not pay property taxes and no new stadium would have been built without the opportunity to use PILOTs.
WSJ on AY: "A Hole Grows in Brooklyn"
Norman Oder takes a look at today's Atantic Yards piece in The Wall Street Journal and adds some perspective of his own.
In a Wall Street Journal op-ed today about Atlantic Yards, headlined A Hole Grows in Brooklyn, Manhattan Institute senior fellow Julia Vitullo-Martin argues, not unpredictably for the newspaper and author, that the private market should have been allowed to do its work.
She writes: Now, more than five years later, what's been brought to Brooklyn is a very large hole in the ground and a project that is coming to symbolize why large government projects can be riskier than allowing local residents to fix up their own communities.
Her conclusion: The ill-fated project in Brooklyn reflects a breakdown of the state and city's strategy of favoring big-government, centrally supported, highly subsidized projects over the kind of small, privately funded, unsubsidized, incremental development that was already occurring in Prospect Heights, as the area is officially known.
...
I think Vitullo-Martin gets the big picture right--and appreciate the citation of AYR in her piece--but I wish she'd further noted the importance of government action as a catalyst. For the blocks in Prospect Heights below the Vanderbilt Yard, conversions of former manufacturing buildings into housing required spot rezonings.
A wholesale rezoning would've been necessary for both those blocks, and the railyards, to catalyze development. And some measure of subsidy would've been necessary to jump-start development over the railyards.
The difference would've been that a subsidy to build a deck over the railyards could've been announced before a single bidder had been selected, as with AY, and instead could've spurred development in multiple parcels with multiple bidders, as in the proposed UNITY Plan.
As I wrote in December 2006, the Empire State Development Corporation, in a not credible statement, contended that, without Atlantic Yards, there would have been no redevelopment in the project site.
Posted by steve at 7:30 AM
March 6, 2009
Luxury Strikes Out
The Wall Street Journal
by Ben Casselman
In a case of monumentally bad timing, this year three of the biggest names in pro sports -- the Yankees, New York Mets and Dallas Cowboys -- are opening three of the most expensive stadiums ever built, filled with premium-priced seats and luxury amenities. At a combined cost of more than $3.5 billion, the stadiums were conceived and financed in a vastly different environment, a time when corporations and municipalities were flush with cash. Now they're opening just as corporate America is going through a massive belt-tightening -- and trying to avoid the appearance of extravagance at all costs.
"Let's face it, if you're taking TARP funds, it's really hard to justify getting a [luxury] box," says Neal Sroka, a luxury real estate agent hired by the Yankees to help sell the team's premium seats, referring to the funds distributed to banks under the Troubled Asset Relief Program.
...Between corporate sponsorships, naming-rights deals and luxury suites, two-thirds or more of teams' revenue comes from corporations rather than ordinary fans, estimates David Carter, executive director of the University of Southern California's Sports Business Institute. Over the years, luxury boxes, once just a few glass-enclosed rooms high above the regular seats, have become as integral to a new stadium as concession stands -- more so, because companies pay for them up front, guaranteeing profits regardless of the team's success on the field. As team owners crammed in ever-more premium seats, corporations, eager for new ways to entertain clients, happily bid up the prices.
All that corporate money, Mr. Carter says, has created what he calls the "sports ticket price bubble." Now that bubble is in danger of bursting.
Posted by eric at 2:29 PM
March 4, 2009
Now we get it: Bloomberg thinks poaching companies over state lines is bad, but poaching teams is not so bad
Atlantic Yards Report
When Smith College sports economist Andrew Zimbalist, Forest City Ratner's paid consultant, calculated (report in PDF) expected tax revenues from the planned Atlantic Yards arena, one key element was what Zimbalist called the "recapture of tax revenues presently generated in New Jersey," current home of the Nets basketball team.
For Bruce Ratner's Atlantic Yards project to be a net gain for NYC, it MUST "recapture" enough tax revenue from NJ fans. But if NJ wanted to do the same, dems is fighting words:
Guess what: the same people who boosted AY now warn that recapture of tax revenues across state lines is a bad idea. Consider an article in Monday's New York Times, headlined New York Vulnerable to Poaching in Recession, which noted how New Jersey was offering incentives to companies to move there.
The Times reported:
Those discussions have infuriated Mayor Michael R. Bloomberg, who complained publicly about New Jersey’s efforts in a news conference last month. And they have been sharply criticized by some economists, who assert that such incentives mainly benefit established companies with lobbying clout and are not very effective in creating new jobs.
Posted by lumi at 5:33 AM
February 28, 2009
Atlantic Yards West
Have you heard about the proposal for a massive mixed-used development that features an arena for an NBA team? Surpise! It's not the proposed Atlantic Yards, it's a proposal being put forward in Sacramento.
This first article gives a gee-whiz overview of the new proposal, but manages to refer to the project as "Atlantic Yards West" without a whiff of irony. No Land Grab readers should get a very strong feeling of deja-vu :
Fanhouse - Sacramento Gets a Look at Potential New Home for the Kings
Hopes of keeping the Kings in Sacramento moved forward Friday, as the NBA unveiled its plans for a huge development with a new, privately-financed arena as the centerpiece. The plan is absolutely massive in scope ($1.9 billion, 8 million square feet), with a new state fairgrounds, condos, retail and office space all apart of the plan.
...
All told, officials call it a potential "city within a city." It is a truly massive undertaking, and any arena won't be ready until 2013 at the earliest. NBA representative John Moag said it will take at least a year to get a developer, and that shovels won't turn dirt until the economy improves. (The economy is worse in Sacramento than in most American cities, if you can believe it.) If you believe in the Sacramento Kings, keep your fingers crossing.
Luckily, the fine people at Field of Schemes are able to inject a whiff of reality.
Field of Schemes - Sacramento proposes Atlantic Yards West for Kings
The NBA and city of Sacramento officially issued their plans for a new Sacramento Kings arena on the site of Cal Expo yesterday, and you sure can't accuse them of thinking small: It includes a 350-acre "living village" with a new indoor fair space, and retail, office, and residential buildings, and a whopping price tag of $1.9 billion. If this sounds familiar, it's because it's a dead ringer for the similar office/residential/arena plan that is currently in the process of collapsing in Brooklyn, thanks to plunging demand for office or residential space.
..
Economist Claude Gruen, a specialist in these kind of giant development deals, called the plan's economic projections "too rosy," and said it wasn't reasonable to expect it could pay for itself. But at least it's created some much-needed jobs for architectural sketch artists.
NoLandGrab: People of Sacramento - be afraid. Be very afraid
Posted by steve at 4:50 PM
February 27, 2009
Isles file arena paperwork, financing still hazy
Field of Schemes
Neil deMause reports on the status of New York Islanders' owner Charles Wang's plans for a new arena (Wang released a 6,000-page environmental report on Tuesday).
Commenter Januz believes the only way the Isles remain in the area is if they relocate to Brooklyn (guess where), and he notes that Al D'Amato is the reason why.
Interesting enough, Al D'Amato is involved with BOTH Ratner and SMG (The managers of the Coliseum).
...A possible plan of D'Amato's, could be to have Atlantic Yards be considered "Shovel Ready" to help with funding. Move the Nets temporarily to the Coliseum, until it is built, then move them and the Islanders to Brooklyn. Then when the economy improves, sell the Coliseum and the land to a developer (Say around 2015, when SMG's management contract expires, and the economy is better?).
Posted by eric at 10:45 AM
February 26, 2009
Why Brooklyn arena tax revenues likely would be lower than projected (and why the IBO should take another look)
Atlantic Yards Report
Have you been wondering what gives with Norman Oder's unflagging obsession with NJ Nets attendance figures? Is the "Mad Overkiller" unable to ignore any of owner Bruce Ratner's exaggerations?
Today's post reveals the method to his madness:
New York City's Independent Budget Office (IBO) may not be ready to recalculate a cost-benefit analysis for the planned Atlantic Yards arena, but there's surely a reason to do so, because one key statistic has likely changed, and one key assumption was likely wrong from the start.
As I describe below, that could mean a 23.2% decline in expected new spending, and a significant--if not quite as high--decline in sales tax revenues. If so, there'd be even more evidence that the arena would represent a loss to the city rather than, as previously analyzed by the IBO, a "modest fiscal surplus."
And it would be another reason to tilt the balance between public and private benefit from the project....
The key assumption is that current NJ Nets fans would attend games in Brooklyn. However, if that reasoning was specious to begin with and attendance keeps dropping, the prospect that NYC would capture enough sales tax revenue from Jersey fans to make the project a net gain for the city pretty much goes down the tubes.
Click here to read the article as Oder walks readers through the math.
NoLandGrab: It's pretty much a given that these projects never pan out like the politicians promise, but very few reporters set out to try to prove it before the fact.
If the justification for hundreds of millions of dollars of direct cash subsidy is based upon this house of cards, Oder is right, it's time for the City to square with the public, especially during this fiscal crisis.
Posted by lumi at 5:38 AM
Atlantic Yards is Not in Compliance With The ARRA and Faces Enormous Statewide Competition
Develop Don't Destroy Brooklyn explains why, according to state and federal regulations governing the economic stimulus package, Bruce Ratner's ailing Atlantic Yards project does not qualify, no matter how much money the developer spends on lobbyists.
Forest City Ratner is lobbying for a bailout of Atlantic Yards from the stimulus bill.
But there are two big strikes against this effort that are not in compliance with the American Recovery and Reinvestment Act:
- Atlantic Yards is not shovel-ready according to the bill's provisions.
- Atlantic Yards is a no bid project. The bill does not allow this.
During the "Leaders Briefing on Economic Recovery" Timothy Gilchrist, head of the Economic Development Recovery Cabinet, laid out in detail the procedures and qualifications by which stimulus money will be apportioned.
Mr. Gilchrist said that there are statewide requests for infrastructure projects valued at $14 billion and $4 billion in stimulus funds available for the state. He said that the"Recovery Cabinet" and State agencies had identified over 1,900 projects in early January valued over $11 billion. Since that time an "equal number of projects had been identified" by agencies and municipalities valued around $3 billion, including about 200 projects "in the last few days."
Some will be eligible, he said, and some won't.
Is Atlantic Yards on that list? So far, it does not appear to be, but the lobbying must be intense.
Posted by lumi at 4:27 AM
Construction's Role in Picking Up the Pieces
The Epoch Times
By Charlotte Cuthbertson
“The stimulus bill will certainly be shaping construction this year,” said Robert Murray, vice president of economic affairs at McGraw-Hill Construction. As a result, the public works sector will be the “saving grace of construction” in 2009 and 2010, Murray said. Murray spoke at the McGraw-Hill “Managing Construction’s Financial Crisis” Conference in New York Feb. 24-25.
Interestingly, when the current state of the construction industry is talked about, Bruce Ratner's flagging Atlantic Yards megaproject tops the list:
Commercial building has been hit hard by the credit crunch. Large projects nationwide such as Atlantic Yards in New York, the Chicago Spire, and the Echelon Resort in Las Vegas have been put on hold.
[OK, so this list is in alphabetical order; however, industry leaders are keeping an eye on what's happening to the largest single-source private development project in NYC history.]
Construction industry leaders are bracing for another rise in costs:
Material costs could be shooting up again by 2010, driven by demand and transportation costs, said economist Simonson.
“By 2010, if economies like China and other developing nations get going again, they're going to add to that demand of materials that we need here for construction” and anytime there's a surge in shipping costs, or fuel surcharges, “you feel it on the construction site,” Simonson said.
NoLandGrab: It's worth noting that stimulus money spent on construction is going to create construction-industry jobs.
Brooklyn Borough President Marty Markowitz and developer Bruce Ratner are telling anyone who will listen that some of this money must be spent on Atlantic Yards in order to create jobs, but clearly these jobs would be at the expense of other jobs created by more essential projects.
Posted by lumi at 4:11 AM
February 22, 2009
ACORN's Lewis Says "Opponents" Should Be "Fair" and Let Ratner "Compete" For Stimulus Funds
Develop Don't Destroy Brooklyn
Below is an excerpt from an article in the Courier> papers. It is not online yet, but we'll post it when it is.The article calls Al D'Amato's lobbying for a bailout for Bruce Ratner's Atlantic Yards proposal a "counter lobbying effort" while "opponents" of the project are "stepping up their lobbying efforts."
Witt refers to opponents, only DDDB by name, writing a letter to the Governor which was "obtained by this newspaper." Perhaps his paper obtained the letter because it was publicized in a press release yesterday but overlooked the 38 signers including political clubs, good government organizations, neighborhood and community groups, and clergy members.
Perhaps ACORN's Bertha Lewis overlooked that too. Because it is Ms. Lewis whose astonishing comments overwhelm the article. We'll let her words speak for themselves, but it is necessary to remind readers that ACORN is contractually obliged to support the Atlantic Yards project in the public and in the press, and last Summer Forest City Ratner gave ACORN $300,000 and a $1 million low interest loan. And remember, Ratner isn't "applying" for stimulus money like small businesses and community centers will have to, he is lobbying the Governor, and who knows who else, directly along with Al D'Amato.
Posted by amy at 10:34 AM
February 21, 2009
Brutally weird: Courier-Life says "Yards opponents" are trying to block Ratner from applying for stimulus money
Atlantic Yards Report
We know Atlantic Yards isn't dead, because things still keep getting brutally weird. The Courier-Life's Stephen Witt, who brought us the story of "the real land-grabbers," this week suggests that the real manipulators in the political system are the volunteer groups opposing a bailout for Forest City Ratner.And the victim of the "counter lobbying offensive" is developer Forest City Ratner, which is paying uber-lobbyist Al D'Amato in an effort to get federal stimulus money for the Atlantic Yards project.
But the signers of the latest letter are not, as the headline suggests, "Yards opponents;" some are simply watchdog groups concerned with prudent infrastructure spending like the Straphangers Campaign and The Open Planning Project, as well as Good Jobs New York, notable for its scrutiny of subsidies, and the consultant Majora Carter.
Click through to the article to find out how DDDB is like the Republican party (according to Bertha Lewis.)
Posted by amy at 2:04 PM
When is democracy coming to Atlantic Yards?
NY Daily News - The I-Team Blog
Michael O'Keeffe
This is a perfect reason why so many people in Brooklyn think Bruce Ratner's Atlantic Yards proposal is little more than a back-room deal to enrich an influential developer.On the same day the Daily News' Pete Donohue and Elizabeth Hays report that Brooklyn beep Marty Markowitz has been lobbying for stimulus money to jump-start the Nets owner's stalled project, Norman Oder says on his Atlantic Yards Report blog that the New York City Economic Development Corp. has denied his Freedom of Information Law request for the current price tag of the proposed arena and surrounding skyscrapers.
The EDC told Oder that supplying that information "would cause substantial injury to the competitive position of the subject enterprise." In other words, it's a trade secret.
Huh?
NoLandGrab: O'Keeffe links to Leonard Cohen's song "Democracy" and asks when democracy will come to Atlantic Yards, but everybody knows the deal is rotten.
Posted by amy at 1:29 PM
February 18, 2009
BrooklynSpeaks, Straphangers say there should be no stimulus for AY
Atlantic Yards Report
Last Wednesday, District Leader JoAnne Simon asked a fundamental question of Atlantic Yards Ombudsman Forrest Taylor: "When is this project no longer this project and is so fundamentally altered that we need to look at it again and start over?"
Taylor said he'd take the question back, but BrooklynSpeaks, the "mend-it-don't-end-it" coalition of which Simon is member, yesterday issued a statement drawing on that issue to ask Governor David Paterson to reject any request by Forest City Ratner for federal stimulus funds.
...
“The original Atlantic Yards plan was conceived for the economy of 2004. In 2009, that plan is no longer feasible, and the current design, program and schedule for the project is unknown,” said Prospect Height Neighborhood Development Council (PHNDC) representative Gib Veconi. “Providing stimulus for Atlantic Yards now would amount to the Governor approving a new project before it’s been disclosed to the public.”It also would seem to bail out a developer for obligations previously committed.
...
BrooklynSpeaks, for reasons of pragmatism as much as principle, has been unwilling to join lawsuits challenging the fundamentals of the project, the approval of Forest City Ratner's role.Still, BrooklynSpeaks, which has proffered proposals for reform that haven't gotten much traction, at least has been praised by Brooklyn Borough President Marty Markowitz, the project's biggest cheerleader and a proponent of stimulus funds.
NoLandGrab: In the past, Marty Markowitz has attempted to highlight the differences between the coalition groups Develop Don't Destroy Brooklyn and BrooklynSpeaks, but even his own stumping for more public subsidy of Bruce Ratner's ill-fated Atlantic Yards plan hasn't managed to soften the consensus that it would be a shameful waste of precious taxpayer money.
Posted by lumi at 5:06 AM
February 17, 2009
Decoding "shovel-ready": AY railyard may seem eligible, but with a huge bailout asterisk (and wouldn't be "fully vetted")
Atlantic Yards Report
Recently, the Empire State Development Corporation was confused as to whether or not the Atlantic Yards was a "shovel-ready" project, and there was (perhaps calculated or cautious) confusion between Senior Senator Charles Schumer and Governor David Paterson as to whether Atlantic Yards would be eligible for federal bailout money.
Norman Oder explores the meaning of "shovel-ready" and whether or not the railyard work has been "fully vetted," which is a requirement, according to an overview released by the office of House Speaker Nancy Pelosi.
Posted by lumi at 5:26 AM
And where in the stimulus bill might money for AY come from?
Atlantic Yards Report
Norman Oder asks and answers the question of the day:
So, where in the stimulus bill might there be money for Atlantic Yards? There aren't too many places and there's surely much competition for relatively limited funds.
[Keep in mind that Atlantic Yards developer Bruce Ratner is currently spending thousands of dollars on lobbyists to answer the same question.]
Discretionary funding
There's some discretionary money for governors; the emphasis is on education but "other government services" are included.
...
Of $53.6 billion, 18.2% would mean $9.8 billion spread nationally--not a huge amount of money for each state. The National Association of State Budget Officers (NASBO) calls it the State Stabilization Fund, which has "flexible funding for governors’ priorities."Mass transit and housing
NASBO also identifies $9.3 billion in the bill for mass transit. (I couldn't find the reference.) The bill has provision for a "Public Housing Capital Fund." There's also $1 billion for a "Community Development Fund," but that money would go to grantees that received funding in FY 2008.There's an additional $2.25 billion nationally for "capital investments in low-income housing tax credit projects;" New York State would get a relatively small fraction.
Might that involve Atlantic Yards? Well, the December 2006 KPMG report (p. 21 of PDF) to the Empire State Development Corporation states that developer Forest City Ratner would be eligible for such tax credits, a benefit of $95,000 to $165,00 per unit. Then again, the stimulus bill says that not less than 75 percent of the funds would have to be committed within a year.
Overview in the press
The New York Times, provides an overview of the impact of the stimulus on New York, identifying "$24.6 billion for Medicaid, education, transportation, and other priorities."Drilling down, the newspaper reported $1.3 billion for transit projects, "nearly all of which would go to the Metropolitan Transportation Authority. About $500 million would go to the Fulton Street Transit Center in Lower Manhattan. As for the rest: The authority has a long list of other projects that could get some of the stimulus money, including subway and commuter rail station renovation and improvements to behind-the-scenes infrastructure like rail yards and shops.
The Vanderbilt Yard was not on the MTA's initial list, but the decision is apparently in the hands of Gov. David Paterson.
Then there's the matter of an amendment that seemingly would have precluded money being spent on stadiums, which never made it to the final bill.
Posted by lumi at 5:17 AM
February 16, 2009
Audit cries foul, says Yanks stiff city on rent - again
NY Daily News
by Adam Lisberg
Not content with a sweetheart deal funneling hundreds of millions of public dollars toward the building of a new Yankee Stadium, the Sultans of Swag still insist on trying to nickel-and-dime the city's taxpayers at every turn.
The Yankees shortchanged the city to the tune of $65,511 for Yankee Stadium rent payments in the first three months of 2008, a new audit from Controller William Thompson shows.
The Bombers do not dispute the audit and plan to repay the money, just as it has paid millions in rent charges after similar challenges in the past eight years.
"The Yankees consistently overstate their rent deductions, effectively underpaying the city the proper rent due," Thompson said in a statement. "The Yankees have understated the rent due to the city by more than $3.7million over 33 quarters, which indicates a pattern thatgoes beyond an accounting error."
Sneering Yankees' president Randy Levine continues his ongoing audition for the role of the villain in the next Batman film.
"If I was Bill Thompson, I'd start paying more attention to Mike Bloomberg than the Yankees," Levine told the Daily News, "or else he's going to find himself in a situation similar to a cellar-dwelling baseball team."
Posted by eric at 12:21 PM
February 13, 2009
Senate aims for swift vote on stimulus plan: Schumer
Reuters
By Joan Gralla
Though he is an ardent supporter of Bruce Ratner's ailing Atlantic Yards arena and highrise megaproject, Senator Charles Schumer hedges in his comments to a reporter on whether or not the project qualifies federal bailout funds:
The U.S. Senate plans to debate the compromise economic stimulus bill on Thursday night and vote any time from midnight to 8:00 a.m. on Friday, Senator Chuck Schumer told reporters on a telephone conference call.
Schumer, joined by fellow Democrat Governor David Paterson, outlined how much New York state and New York City stand to get from the $789 billion bill negotiated between the Senate and the House of Representatives.
...
Cautioning that some figures were preliminary, Schumer estimated the state would get $1 billion to modernize highways and $1.3 billion for mass transit upgrades. But the cash-strapped Metropolitan Transportation Authority, which runs New York City's buses, subway and commuter rails, cannot use any extra dollars it gets to avoid steep fare and toll hikes.A high-speed rail link to Buffalo might be funded. But Schumer said he did not know if the Metropolitan Transportation Authority's Atlantic Yards Brooklyn development would qualify. This apartment-office project, throttled by the credit crisis, includes an arena for the New Jersey Nets basketball team.
[Emphasis added.]
Develop Don't Destroy Brooklyn comments:
Of course the Atlantic Yards project is not the MTA's project it is Forest City Ratner's project. Unclear if that is the reporter's error or the Senator's. Presumably the MTA will use its stimulus funds for MTA projects.
Furthermore, our reading of the latest versions of the bill make it pretty clear that Atlantic Yards will not be eligible for stimilus funds for various reasons, including that the project is not "shovel ready" by any stretch of the imagination. And the bill is not supposed to supply funds to bail out a private developer and relieve him of his commitments.
NoLandGrab: Interesting — either Schumer doesn't want to deliver the bad news to Bruce yet, or he's still trying to figure out how to make his developer pal happy.
[Photo: Ratner and Schumer at press conference announcing the purchase of the NJ Nets in 2004.]
Posted by lumi at 5:26 AM
February 9, 2009
ATL. YARDS BIG WANTS PORK PIE
NY Post
By Rich Calder
Expect the developer whose motto is "no subsidy left behind" to work his ass off to get a chunk of the federal stimulus package.
City and state officials say they expect developer Bruce Ratner to lobby hard for a piece of the federal pork to help bail out his reeling $4 billion plan to bring an NBA arena and 16 residential and office towers to Prospect Heights, which is in jeopardy because of the economic downtown.
Cheerleader-in-Chief and Brooklyn Borough President Marty Markowitz insists that the project is "shovel-ready" and is exactly the type of economic stimulus that Brooklyn needs, while project opponent Dan Goldstein asserts that no more money should be used to bail out a private developer and the "Atlantic Yards money pit."
Could there be an arena loophole in the stimulus package?
State officials say the project would qualify for New York's share of stimulus funds, but no distribution decisions have been made.
Although stadium projects don't qualify to receive money through the stimulus bill, arenas are not mentioned in the document.
Though the Post repeats the "15K construction jobs" myth (it's really 1,500 jobs over 10 years), it is one of the few papers that has informed readers that the developer has "serious cash-flow problems":
The Post reported last month that Ratner is having such serious cash-flow problems that he's in talks with the Metropolitan Transportation Authority about cutting costs on a $445 million transit improvement plan he promised in 2005 in order to get the green light from the state for Atlantic Yards.
Posted by lumi at 5:38 AM
February 8, 2009
Atlantic Yards Bailout DOA?
Develop Don't Destroy Brooklyn
The federal stimulus bill awaits a Senate vote likely on Tuesday followed by heated negotiations for reconciling with the House so nobody can be sure yet what the bill will be and what it will allow.But currently the Senate version includes an amendment that has been passed that does not allow stimulus funds for, amongst other things, a stadium.
S.A. 309 page S1590 reads:
None of the amounts appropriated or otherwise made available by this Act may be used for any casino or other gambling establishment, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, art center, and highway beautification project.If that Amendment stays in the final bill, which is likely, Forest City Ratner will not be able to get stimulus funds for his billion dollar arena, though they will try. Will they argue that an arena is not a stadium? Probably. But an arena and a stadium are the same thing in the context of such a provision.
Posted by amy at 10:40 AM
ESDC Abruptly Changes Tune on Federal Stimulus Money to Bail Out Ratner
Develop Don't Destroy Brooklyn
DDDB has three questions after reading this week's Courier article by Stephen Witt:
1. Which day during the past week did Forest City Ratner tell ESDC and Johnston to "fix this" thing that Willner said last week? (If the statement was simply wrong, rather than offensive to Forest City Ratner, you'd think ESDC would have corrected it more quickly on its own.)2. Which Ratner lobbyists are courting which city, state and federal politicians to give them a piece of the action?
3. If, as Johnston states, the suspension of work at the Atlantic Yards site is "due to pending litigation," rather than financial difficulties, then why would Ratner need or deserve federal stimulus taxpayer dollars?
Posted by amy at 10:36 AM
February 3, 2009
Mets, Citigroup say stadium deal still on
Bank issues statement after report said it was considering move to back out of contract amid complaints from lawmakers.
AP via Crain's NY Business
Maybe they should call it Dupli-Citi Field.
The New York Mets and the financially troubled Citigroup said Tuesday that their $400 million naming rights deal for the team's new stadium is still on, despite a published report that Citi may be looking to back out.
The Wall Street Journal reported Tuesday that Citigroup was exploring the possibility of backing out of the 20-year marketing partnership, which includes naming the new ballpark Citi Field. The report quoted unnamed people familiar with the matter as saying Citigroup had made no final decision.
Citigroup Inc., which late last year said it planned to cut 53,000 jobs worldwide and received $45 billion in federal bailout aid, said in a statement: "Citi signed a legally binding agreement with the New York Mets in 2006." The bank said that none of the bailout money would be used for Citi Field.
NoLandGrab: Instead, the bailout money (aka "our money") is being used to fund things that otherwise would have had to be funded with the Citi Field sponsorship money — like bonuses.
Posted by eric at 10:11 PM
Citi Explores Breaking Mets Deal
Bank That Got Bailout Cash Revisits $400 Million Pact to Put Name on Stadium
The Wall Street Journal
by David Enrich, Matthew Futterman and Damian Paletta
You say Cit-ee, I say Cit-eye, let's call the whole thing off.
Citigroup Inc., eager to quell the controversy over how lenders are using government bailout money, is exploring the possibility of backing out of a nearly $400 million marketing deal with the New York Mets, say people familiar with the matter.
Officials at Citigroup have made no final decision about whether to try to void the 20-year agreement, which includes naming the Mets' new baseball stadium after the bank, say these people.
In a statement Monday, Citigroup said that "no TARP capital will be used" for the stadium -- referring to government funds from the Troubled Asset Relief Program. But as it revisits the pact, Citigroup is essentially acknowledging that the volatile political climate could make it untenable for the bank to proceed with the deal.
How exactly do they separate the TARP money from their other money? Marked bills?
If Citigroup parts ways with the Mets, other financial institutions may find themselves under pressure to reconsider sports-marketing deals. Bank of America Corp., which got $45 billion in government capital, signed a deal in 2004 for naming rights for the Carolina Panthers football stadium in Charlotte, N.C.
Bank of America's 20-year deal calls for the bank to pay the Panthers $7.5 million a year, making it one of the National Football League's most expensive naming-rights deals. The Houston Texans receive $10 million a year from Reliant Energy Inc.
Bank of America has been in talks with the New York Yankees about a major sponsorship deal for the new Yankee Stadium, though the company's name wouldn't be on the building. That deal appeared near complete in the fall, but neither side has discussed the matter since then.
NoLandGrab: The Mets have a ballpark, but may end up without a naming-rights deal. Bruce Ratner has a naming-rights deal (for now), but may not have an arena.
Posted by eric at 8:24 PM
February 2, 2009
Atlantic Yards YES! Teachers NO!
New York City is on the hook for hundreds of millions of dollars for Bruce Ratner's Atlantic Yards plan. Meanwhile Mayor Bloomberg just presented a budget that proposes laying off 15,630 educators citywide, much to the consternation of another Atlantic Yards supporter, United Federation of Teachers President Randi Weingarten.
This report from 1010 WINS News Radio by Terry Sheridan:
Bloomberg threatened the city's labor unions with 20,000 layoffs if they don't step up to renegotiate contracts and require workers to contribute more on their benefit packages.
"You can only get so much blood out of a stone'' with budget cuts and other measures, Bloomberg said. After that might come layoffs, he said. He is confronting a $4 billion deficit for the next fiscal year, which begins in July.
But the United Federation of Teachers is claiming city educators make up an unfair proportion of the proposed job cuts. The U.F.T. says the mayor's plan will see educators account for 15,630 of the proposed cut of 19,650 positions city-wide.
U.F.T. President Randi Weingarten said, "We know times are tough and that everyone needs to share in making sacrifices, but this is shockingly disproportionate and unfair."
Posted by lumi at 4:45 AM
February 1, 2009
ESDC Says Atlantic Yards Not Eligible for Federal Stimulus Money
Develop Don't Destroy Brooklyn
Unless it is a feint of some kind, the Empire State Development Corporation, for the first time ever, has made a declarative statement detrimental to the hopes and dreams of "developer" Forest City Ratner and its Atlantic Yards proposal.And rightly so.
The state development corporation and lead agency on Atlantic Yards stated unequivocally that Atlantic Yards is not a "shovel ready" project and therefore will not be eligible for any money from the non yet approved federal stimulus bill.
Congresswoman Yvette Clarke, who represents the district where the project has been proposed, also stated clearly that any decision on stimulus money for Atlantic Yards would be made by the ESDC, not by her office.
Posted by amy at 9:52 AM
January 31, 2009
Are Pro Sports Too Big to Fail?
The Wall Street Journal
by Jonathan V. Last
First there was the tech bubble. Then came the housing bubble. Could the pro-sports bubble be next?
In an economic crisis, the weak die first. So it was no real surprise that the first sports casualties of the current recession came from minor professional leagues: Last month the WNBA shuttered its premier franchise, the Houston Comets, and the Arena Football League, which had been scratching out a living since 1987, canceled its 2009 season. (The LPGA is cutting three tour stops and $5 million in prize money from the 2009 tour, so they're feeling the pinch, too.) The question is, were these failures part of a normal, recessionary, thinning of the herd? Or were they the early warning signs of a pro-sports bubble that may be about to burst?
...Yet teams keep building new stadiums. They're charging bigger premiums -- such as personal seat licenses -- for high-end and luxury seats. Parking, concessions and player salaries keep going up, too. Is it all sustainable?
Perhaps. America's obsession with sports has created a nearly continuous 90-year boom. There have been down moments, but neither the NFL nor MLB has ever contracted, i.e., eliminated, a team -- the ultimate sign of failure. The National Basketball Association hasn't eliminated a franchise either, since it took on its modern form in 1976.
During the Great Depression, baseball did take a significant hit: Attendance dropped 40% from 1930 to 1933 and didn't return to pre-Depression levels until 1945. Player salaries declined 25%. But no teams went belly-up.
Matters might be different this time.
First, franchises have become accustomed to the public financing of stadiums and arenas. During the construction boom of the 1990s, some 50 ballparks, stadiums and arenas were built in the U.S., according to BusinessWeek. On average, taxpayers footed 70% of the bill -- even though team owners reaped the benefits. In baseball, for example, Forbes calculates that the median ballpark is worth $100 million to a team, or a quarter of a franchise's total value. In the '90s, teams argued that new stadiums added to a city's economic vibrancy. Yet studies now show that subsidies for sports stadiums actually create a slight drag on the local economy. And even if cities wanted to believe the boosters, the bad times should now make the current crop of publicly financed stadiums the last. The Vikings, for instance, have started asking Minnesota lawmakers about building a new facility for their team. The response has been laughter.
..."The U.S. government is buying banks, major retailers are going under, and a half-a-dozen newspapers are folding up shop," [Fox Sports Radio's Steve] Czaban says. "Why is it we think this could never happen to sports?"
Posted by eric at 1:06 PM
CBA signatories seek federal stimulus money for AY; ESDC flatly says project is not "shovel-ready"
Atlantic Yards Report has the the scoop on the not-yet-online story from Courier-Life that breaks the news of ESDC's opinion of the Atlantic Yards status:
"ESDC spokeswoman Lisa Willner responded that Atlantic Yards is not a shovel ready project and thus would not be eligible for stimulus money."
The article also includes a confused statement from BUILD CBA signer James Caldwell:
"The way it [stimulus money] is being proposed is that it will go through the government and they will give it to unions and not to community based organizations that train and prepare people in our community," he added.I don't think the plan is to give the money to unions.
Posted by amy at 12:13 PM
Mayor's Budget Would Shrink Capital Plan by 30 Percent
The Real Estate
Eliot Brown
Mayor-for-life Bloomberg seems to be packing up the golden shovel that helped dig the city into an economic disaster:
Just as Washington is planning an infusion of spending on construction and infrastructure, Mayor Bloomberg has proposed a substantial cutback that would shrink the city’s five-year capital plan by more than $6 billion, or 30 percent.What’s in the capital plan? Money goes to roads, police stations, economic development projects (such as revitalization of Coney Island and the development of Atlantic Yards). These cuts to the plan come on top of what equated to a 20 percent reduction enacted last year, which spread out the four-year plan into five years.
Mr. Bloomberg has been a mayor who apparently loves capital spending, and for the past two years, the city has allocated record amounts to capital projects. New below-market-rate housing, new parks, improved infrastructure—all have been strongly emphasized in the Bloomberg administration’s early years, but all have come at a cost, bringing up the city’s debt burden as almost all the money was borrowed (this is a common practice for capital projects).
...
Just last week, City Comptroller Bill Thompson released a report warning about the city’s rising debt level, as tens of billions in added debt could leave taxpayers with an increasingly unmanageable burden each year in the form of debt payments. Debt payments are especially burdensome as they stay the same even if tax revenue shrinks, eating up a larger portion of the budget.
Posted by amy at 12:05 PM
January 30, 2009
IBO official: time for another look at AY incentives (but not for a cost-benefit analysis, yet)
Atlantic Yards Report
The Brooklyn Paper quotes George Sweeting, Deputy Director of the New York City Independent Budget Office (IBO), says, according to the Brooklyn Paper, "It may be time for the city to take another look at the mix of incentives.”
...
Still, it doesn't look like the IBO is ready to perform another cost-benefit analysis. (The initial one had its flaws, since the IBO mainly focused on the arena.) In September 2007, Sweeting told me, "It remains unlikely that we will re-work the entire fiscal impact analysis, given other demands on our resources."When I queried Sweeting yesterday, he responded, "We don’t have anything underway on Atlantic Yards at this time. As the plan evolves we may take another look--but we have to consider that in light of our own limited resources and other demands on them."
Indeed, the plan is hardly firm. However, that hasn't stopped Forest City Ratner from pursuing additional indirect subsidies. Shouldn't someone be calculating how this cuts into the originally promised benefits?
NoLandGrab: We'd bet that the IBO won't pursue any additional analysis, so as not to embarrass Bruce Ratner and project supporters.
Posted by lumi at 5:27 AM
NY1 Exclusive Poll: NYers Still Sour Over Term Limits
NY1
By Josh Robin
It appears that Mayor Bloomberg is vulnerable on an issue other than the extension of term limits... public funding of ballparks.
For Democrats eyeing toppling Bloomberg, like Congressman Anthony Weiner and city comptroller Bill Thompson, there's another angle -- baseball.
Fifty-nine percent of New Yorkers disapprove of financial deals to give the Mets and Yankees new ballparks. Just 14 percent approve while about a quarter aren't sure.
The poll was taken before recent reports that costs of recreational facilities that were part of the Bloomberg administration-brokered deal have ballooned by nearly $80 million.
Which means if perks for baseball teams emerge as an issue, this political game isn't over yet.
NoLandGrab: In the past, Mayor Bloomberg has contended that the teams are paying for new venues with their own money. As in the case of Bruce Ratner's Atlantic Yards arena, we know that isn't true.
Posted by lumi at 5:21 AM
Kucinich asks Citigroup to give up Citifield naming rights deal
Atlantic Yards Report
Norman Oder responds to news that:
Representatives Dennis Kucinich (D-OH) and Ted Poe (R-TX) have asked Treasury Secretary Timothy Geithner to demand that Citigroup dissolve its $400 million naming rights contract for the New York Mets, known as Citifield.
...
Essentially, the naming rights agreement is a marketing expense, and even banks that take federal money aren't being asked to stop marketing, are they? (Can egregious marketing expenses be regulated?)But it's probably not a marketing expense--at least at $20 million a year--that the bank would make today.
Barclays Capital has so far avoided nationalization. But the discussion about the Atlantic Yards arena naming rights deal might get interesting if the U.K. government does end up bailing out the bank.
NoLandGrab: That's a hard one. Can we expect a backlash if any automakers that accepted federal bridge loans pay premium rates to advertise during the Super Bowl?
Then again, if taxpayers are lending a hand in the construction of the ballpark, shouldn't naming rights proceeds go back to the government?
Posted by lumi at 5:10 AM
January 29, 2009
Pricey stadium stations
Metro New York
By Patrick Arden
Here's a further example of how the City and State governments' enthusiasm to subsidize private sports facilities costs taxpayers more and more.
When the MTA agreed to spend $40 million for a station to service the new Yankee Stadium, rider advocate Gene Russianoff suggested the team pay for naming rights to the stop.
...
The cost of the new Metro-North station has climbed to $92 million —the city’s kicking in $39 million — and keeps rising: This week Metro-North approved $800,000 to keep the station clean.
“The Yankees have refused to contribute,” said Andrew Albert, a rider rep. on the MTA board.
NoLandGrab: Meanwhile, the State refuses to back off from subsidizing the proposed Nets Arena which will eat up plenty of taxpayer money, but return little.
Posted by steve at 6:06 AM
Park replacement costs skyrocket
River Ave. Blues
Here is commentary on the announced delays in delivering parks for Bronx residents that are meant as a replacement for public parkland given away for the construction of the new Yankee Stadium. The proposed Atlantic Yards project gets mention as an example of poor planning.
According to a recent study by the city’s Independent Budget Office, the City of New York will have to pony up nearly $80 million more than originally expected to replace the 22 acres of parkland lost to the new Yankee Stadium. This project will now cost around $195 million. Who would have guessed?
...
In the end, this is of course no different from countless other city projects. Along Second Ave., the long-awaited Second Ave. Subway has run into countless delays and budget problems, the Atlantic Yards and Hudson Yards projects are a mess, and even the Fulton St. Hub, part of the Lower Manhattan post-9/11 redevelopment plan is stuck in neutral.
NoLandGrab: Atlantic Yards is a State project (the City having abdicated its responsibility years ago), but the pattern here is similar: Backroom deals result in huge public subsidies with little public benefit.
Posted by steve at 5:48 AM
January 27, 2009
Yankee Stadium rec area cost out of the park
Crain's NY Business
by Daniel Massey
More revelations about The Parks that George (and Mike) Stole from the people of the nation's poorest Congressional district.
The cost of replacing more than 22 acres of South Bronx parkland displaced by the new Yankee Stadium has skyrocketed 67% to nearly $195 million, according to a new report by the Independent Budget Office.
Design revisions, project additions, unanticipated cleanup of hazardous materials and construction inflation have driven costs up by $78.6 million, the report said. While the Yankees are financing the stadium — with the help of city and state subsidies — the parks are being paid for by the city.
...Eight smaller parks will replace Macombs Dam Park and a portion of John Mullaly Park, which were demolished to make way for the new stadium and parking garages.
...The parks were initially expected to be completed by December 2010, but construction delays at almost every facility means they will not likely open before the fall of 2011.
...The increases and delays came as no surprise to community members who believed all along that the city’s original plan was not feasible. They vigorously opposed the stadium, in large part because of its impact on neighborhood parkland.
Joyce Hogi, a member of Community Board 4’s parks committee and a longtime area resident, said community members told the city it was underestimating the amount of environmental remediation that needed to be done, but that its warnings went nowhere. “We knew the costs of the parks were going to escalate,” she said. “During our protests, we said ‘there are tanks under the soil, there’s remediation that needs to be done.’”
Even if there are no further delays, Ms. Hogi believes irrevocable damage has already been done. “The kids that played in these parks will be adults and parents by the time we get the replacements,” she said.
NoLandGrab: The phony claims by the Yankees and the Bloomberg administration that the new stadium will be a boon to the Bronx make the theft of the area's parkland all the more egregious.
Posted by eric at 4:15 PM
January 26, 2009
Sports of The Times: Tear Down Stadium and Build Up the Bronx
The New York Times
by Harvey Araton
Araton's scathing column appeared in Sunday's Times. Once again we ask, why do the sports beat writers and columnists see through the stadium swindles while the metro and editorial desks get writer's block?
Months after its rousing and official farewell, old Yankee Stadium stands strong, proud and in one piece, shuttered but not altogether silenced.
Twenty-two days until pitchers and catchers, its message board atop the outer wall reminded passers-by last week — one day before the Yankees finally left the building. Humble sorts they are, they made a publicized show of an administrative schlep across the street Friday that was months overdue, like the demolition of a ballpark so beloved that it almost sounds sacrilegious to ask, why is it still here?
A civic conscience trumps sentimentality, however. Enough is enough. To paraphrase Ronald Reagan: Tear down this stadium, Mr. Bloomberg!
“That’s going take at least two years because the city’s priority is the Yankees, not the neighborhood,” said Joyce Hogi, a member of the Community Board 4 parks committee.
She and her colleagues fought a long, losing battle of preservation best evidenced by two stadiums at the expense of cherished parkland, to be replaced here and there and on terms mostly beneficial to a private enterprise already worth in excess of $1 billion. All while the old and the new stand side by side, towering over what is commonly called the nation’s poorest Congressional district like some supersize baseball mall.
...The city and the Yankees say the area will benefit in economic development. Hogi said: “The Yankees have been there for 80 years and what’s been developed? The only thing they are building now is a fortress so the people coming in will never have to step foot in the neighborhood.”
NoLandGrab: Joyce Hogi raises a very good point. If the Yankees are so good for the people of the Bronx, why is this "the nation’s poorest Congressional district" after 80+ years of the Yankees?
Posted by eric at 10:18 AM
What's Happened to the Plant in the Park
Gotham Gazette
By Anne Schwartz
The controversy over the construction of a water filtration plant in the Bronx underscores the importance of ongoing scrutiny by politicians and watchdogs over largescale projects like Bruce Ratner's Atlantic Yards, even after they are underway:
The escalating cost of the facility, which will be one of the largest water filtration plants in the world, is one of a number of complaints raised by critics, who opposed ever placing it in the Bronx and say the city is mismanaging the project. As they watch over the construction of the plant as well as associated work at nearby Jerome Park Reservoir, they want to ensure that the city keeps its promises to provide jobs to local residents, minimize the environmental impacts of construction in residential neighborhoods and spend an additional $240 million on Bronx parks.
Local politicians and state officials agreed to let the city build the filtration plant after the Bloomberg administration made these promises. Other projects throughout the city -- from Willets Point to Atlantic Yards to Yankee Stadium -- also faced local opposition and entail similarly elaborate agreements for community improvements, affordable housing and more. The ongoing saga of the filtration plant in the north Bronx shows the need for constant vigilance by residents and elected officials to make sure these promises are kept.
Posted by lumi at 4:54 AM
January 23, 2009
"Negotiating against ourselves": Council Member Gioia offered a prescient warning about the city's embrace of AY
Atlantic Yards Report
While doing research on the political tidal wave of support for Bruce Ratner's Atlantic Yards megaproject, Norman Oder stumbles upon a moment in time when one politician was trying to think clearly:
Would you believe that, some four-and-a-half years ago, a top city economic development officials promised that the return on public investment in the Atlantic Yards project would be eclipsed by the impact of the New Jersey Nets moving to Brooklyn?
Or that an effort to "find a better deal" was seen to "discourage developers from coming to us," even though, since then, the city has held competitions for developers seeking to build megaprojects?
That's in the transcript of the 5/4/04 City Council hearing on AY.
There were two key exchanges between City Council Member Eric Gioia and Andrew Alper, then president of the New York City Economic Development Corporation.
(I augmented the transcript slightly with a look at some video.)
Posted by lumi at 5:18 AM
January 22, 2009
The Stadium controversy as a national bellweather
River Ave. Blues
This item discusses the issue of publicly financing stadiums in a time of financial difficulty. Not surprisingly, the proposed Atlantic Yards project gets a mention.
As New York, the center of the known universe, prepares to open two baseball stadiums in a few months, urban policy gurus and baseball economists have put the city and its stadium financing deals under a microscope. Meanwhile, with the U.S. economy in a deep recession, the national construction boom has all but ground to a halt.
Enter Maury Brown and The Biz of Baseball. In a multi-part series on Brown’s site, Pete Toms has explored the issues surrounding stadium construction and financing. Part I explored how stadium construction plans are couched in terms of mixed-use development. Part II examined how the current state of the U.S. economy has left the new Busch Stadium an island in an uncompleted and unfunded ballpark village. Yesterday, Part III hit the Internet.
In it, Toms looks at the impact the recession will have on stadium financing. Toms predicts that of the three major sports teams awaiting approval for stadium financing and construction — Nets, Marlins, A’s — at least one of those teams will never get its new home and the others may have to wait a while. With the Atlantic Yards plan in shambles, the Nets fit the bill, but I don’t think the Marlins and A’s will be enjoying new digs anytime soon.
Posted by steve at 6:32 AM
January 19, 2009
If it's Monday, the Yankees must be lying spinning
City tabloid sports columnists have no illusions about who's really paying for the new Yankee Stadium. Why is it that sports columnists seem to grasp injustice a lot faster than Metro beat writers?
NY Daily News, Yankee Stadium and Citi Field are the Houses That You Built
Mike Lupica, whose b.s. detector is as sharp as anyone's in the New York media, sums up the Yankees' subterfuge in a must-read column.
For the last time, the Yankees aren't building a new Yankee Stadium for the Bronx because it is the poorest Congressional district in the country. And they aren't building it for you anymore than the Mets are with Citi Field. This isn't about a grand slam home run for the city's economy. It is a grand slam for these baseball teams.
Yankees president Randy Levine - whom Hal Steinbrenner has somehow allowed to become the angry face and threatening voice of his organization - likes to scream about lies and distortions. He ought to know. You can start here: That the Yankees moved across the street as some sort of public service. They didn't. New ballparks and new arenas are never public services and never help the taxpayers, not in the Bronx, not in Queens, not in the Meadowlands.
Not anywhere.
NY Post, STADIUM WATCHDOG DESERVES ANSWERS
Post columnist Phil Mushnick isn't buying what Yankees president Randy Levine is peddling.
Says here that in the throes of a crisis that demands fiscal accountability, Westchester Assemblyman Richard Brodsky's call for a full accounting of New York's financing of the new Yankee Stadium should have been met by both Mayor Bloomberg and Yankee president Randy Levine with this: "Anything you want, and right away. We've nothing to hide."
Instead, Levine and the mayor's office threw a name-calling hissy fit, accusing Brodsky of political grandstanding, and, sounding more like John Sterling than John Sterling, accusing him of treason for trying to do dirt to the citizens of New York by asking none-of-his-business questions about New York's deal with the New York Yankees!
Levine said that Brodsky's "behavior in trying to hurt the people of this city is disgraceful." Indeed!
How dare anyone question a $370 million shortfall in the original estimate of public financing for the Yankees!
WFAN/YES Network, Francesa on the Fan
Levine keeps pushing the prevarication with WFAN radio host Mike Francesa, including this novel explanation for the massive taxpayer contribution to a new Yankee Stadium.
"For years and years, in the Bronx, people were complaining that the parkland in the Bronx was not adequate. So as part of this arrangement, the Yankees pay for the stadium, the city is building the infrastructure. So the city is building new and additional parkland.... The city are building beautiful brand-new parks."
Yup, it's all about the parkland — ballpark land, that is.
Posted by eric at 4:48 PM
January 18, 2009
Atlantic Yards YES! Schools NO!!
NY Times presents letters from New Yorkers to Obama:
ARTHUR GOLDSTEINTeacher of English as a Second Language, Francis Lewis High School, Fresh Meadows, Queens
I teach in a trailer in the back of a building. My school is built for 1,800 kids, and we have over 4,500. They build a wall in the middle of the room and say we have two rooms. It’s unconscionable.
There’s an entire school in the Bronx made of trailers. Meanwhile, we’re building more seats in stadiums down the street. What do you think will happen if we build stadiums and not schools? Kids get it. They’re smart.
Posted by amy at 9:42 AM
Bloomberg's economic plan
Crain's
Mayor Michael Bloomberg's plan to bolster the New York City economy is a major step forward on two counts. It provides a clear signal that city government is willing to take significant action amid the economic crisis. It also raises the bar for Mr. Bloomberg's likely opponents in this year's election—Comptroller William Thompson and Congressman Anthony Weiner—when they offer alternatives.
...
But the mayor failed to address some key issues. He never explained how he would continue major economic development projects such as Willets Point with diminished resources and a lack of commitment on the part of the private sector to move forward on these plans. He didn't mention the Atlantic Yards or West Side rail yards projects and whether he thought more government subsidies are appropriate to move them forward.
Posted by amy at 9:32 AM
January 17, 2009
The Yankees get their bonds, but questions remain
Atlantic Yards Report
The New York Yankees, as expected, got the tax-exempt bonds they sought, with one abstention among the board members of the New York City Industrial Development Agency, that of Comptroller William Thompson's representative. The New York Mets got their bonds, with no debate. Here's coverage in the Times.Questions pending
I wasn't there, but Good Jobs New York's Allison Lack was, and she observed:
Representatives for the Yankees and Mets each made presentations during the hearing, which goes against standard IDA practice. By the IDA’s own rules, comments in favor or opposition to projects are limited to public hearings (one took place yesterday). At all the IDA board meetings Good Jobs New York has attended over the years, never before have we seen project applicants speak in favor of their projects during these meetings.
Posted by amy at 10:58 AM
January 16, 2009
City Agency Approves More Funding For Yankee Stadium
NY1
Here's a big surprise.
The city's Industrial Development Agency approved another $370 million in tax-exempt bonds for the new Yankee Stadium today.
The panel voted 11 to one in favor of the additional funds. There was one absention.
It's been the subject of two days of heated hearings this week.
The IDA discussed the issue yesterday. On Wednesday, Yankees President Randy Levine defended the request before a State Assembly hearing.
The team says it needs more money to pay for rising construction costs.
Assemblyman Richard Brodsky has accused the Yankees and the city of working together in illegal secrecy. City Comptroller Bill Thompson has accusing the city of financial incompetence on the project.
link (with video)
The one "nay" was cast by the Comptroller's representative.
Posted by eric at 2:29 PM
At IDA hearing, Brodsky warns of "complete breakdown of the issuance of public debt"
Atlantic Yards Report
Norman Oder rounds up coverage of testimony from yesterday's "public hearing of the New York City Industrial Development Agency (IDA) on additional tax-exempt bonds for the New York Yankees and New York Mets."
State Assemblyman Richard Brodsky pointed out:
"This event and this vote and this hurried process is only greater evidence of the complete breakdown of the issuance of public debt in New York State."
One columnist believes that triple tax-exempt bonds are "hardly a handout," while Neil deMause points out that the New York Times has suddenly seen the light, practically after the fact (and in contrast to the paper's stance on Bruce Ratner's megaproject).
Posted by lumi at 5:53 AM
January 15, 2009
Is Yankee Stadium costing taxpayers too much money?
Crain's NY Business Poll
The Yankees' request for additional tax-free financing to finish its new stadium has generated criticism from some politicians, partly because much of the money will be spent on luxury add-ons. The city's Independent Budget Office places the cost to city taxpayers for the $1 billion-plus stadium at $363 million.
Is the stadium costing taxpayers too much money?
Yes. Mayor Michael Bloomberg claims he drives a hard bargain, but he gave away the store to the Yankees.
No. The new stadium is generating all sorts of economic activity in the Bronx, and in the long run, the city will come out ahead.
Click here to cast your vote.
Posted by eric at 4:58 PM
Whatever Yankees Want
New York Times Editorial
The new Yankee Stadium in the Bronx is still months away from the first pitch of Opening Day. But suddenly a lot of people are questioning yesterday’s package deal for this luxurious ballpark in light of today’s struggling economy.
Seats for $1,500 a game? Suites fit for the royal family? A scoreboard fit for the Big Board? A fabulous steakhouse and granite ramps (no ordinary cement for this crowd)? This $1 billion-plus pavilion and park financed with a lot of taxpayer help is beginning to sound like something fit for the Wizard of Oz.
To pay for many of these add-ons, the Yankees now want — surprise! — more help from the city. They have asked the Industrial Development Agency for an additional $400 million in tax-free financing to finish the project. Unless the city’s leaders show some courage, the agency is expected to rubber-stamp that request by the end of the week, after a pro forma hearing on Thursday.
...Mayor Bloomberg has — rightly — had to cut city budgets and increase property taxes and explain to residents how times are bad and how we all will have to share the pain. It is time for Mr. Bloomberg to make that same pitch to the Yankees.
If the Yankees can sign megamillion-dollar contracts (C. C. Sabathia just landed one for $161 million over seven years), they should be flush enough to contribute more toward their new stadium and to the parks for people living nearby.
NoLandGrab: And might The Times feel differently about hundreds of millions in subsidies for Atlantic Yards? Given that developer Bruce Ratner is the paper's real estate partner, and that The Times owns a 17.5% stake in the Yankees' arch rival, the Boston Red Sox, we're not sure we can expect the same point of view.
Posted by eric at 4:43 PM
Coverage of Yankees Bond Hearing
There was considerable coverage of yesterday's hearing held by State Assemblyman Richard Brodsky regarding public subsidies for the new Yankee Stadium. All news sources reflected the contentious nature of the hearing at which New York City Industrial Development Agency Chairman Seth Pinsky and New York Yankees President Randy Levine tried to justify massive public subsidies. Look for similar posturing from the City should the proposed Atlantic Yards project move forward.
Metro: Yanks play hardball at stadium hearing
Brodsky says taxpayers are paying for the new stadium, citing the city’s request to the IRS to permit an arrangement under which the Yankees would repay their tax-exempt bonds with “property taxes.”
But the Yankees have never paid property taxes, so “the city is no worse off,” explained Seth Pinsky of the NYC Economic Development Corporation, who viewed the project as a $1 billion stimulus package to the South Bronx.
Brodsky called this “bizarre bureaucratic arrangement” a gift to the Yankees that outweighs any public benefit. While the stadium project has resulted in thousands of construction jobs, it will create only 57 permanent, full-time jobs.
NYTimes: Hearing on Bonds for Yankee Stadium Gets Testy
A central part of Mr. Brodsky’s argument is that the Yankees, by paying off bonds with payments in lieu of taxes (known as Pilots), are avoiding paying property taxes. He wondered if they had a “divine right” to not pay taxes. And he brandished a document from the newest report that said, “The city has determined to use its property taxes (in this case Pilots) to finance the construction and operation” of the stadium.
In his view, the property taxes are taxes owed and the Yankees, contrary to their contention, are using city money to repay their bonds, not their own. “The Yankees don’t pay taxes now,” he said to Mr. Pinsky. “Does that mean they should never pay taxes?”
Atlantic Yards Report: Are PILOTs a subsidy? At Assembly hearing, Brodsky goes around and around with reps from city, Yankees
In addition to exhaustive coverage, Norman Oder presents a tie-in to the fight against the proposed Atlantic Yards project.
Yesterday’s hastily-called Assembly hearing on the New York Yankees’ request for some $370 million in additional tax-exempt bonds featured antagonists who disagree fundamentally and easily reach the edge (and beyond) of civility: Assemblyman Richard Brodsky vs. New York City Industrial Development Agency Chairman Seth Pinsky and New York Yankees President Randy Levine, both present only via subpoena.
...
...the big news was the city Independent Budget Office upped its estimate of project subsidies significantly, to $854.7 million. Note that the IBO did not say that the PILOTs (payments in lieu of taxes) deal with the Yankees represents a cost to the city for the $1 billion-plus in foregone property taxes. (deMause disagrees, calculating $416.6 million in foregone taxes.) IBO does calculates the public costs for the first round of Yankees tax-exempt financing to be $205.2 million and the new round $72 million, with some 97% of that cost falling on federal taxpayers--which is why Kucinich is interested.
Nor did IBO say the PILOTs plan for the Atlantic Yards arena represents a full subsidy, though many AY critics think so. Brodsky hasn't opined on the issue, but if he's consistent, it seems he'd have to maintain the same posture that he has in the case of the Yankees.
There are some significant differences, however. Notably, because the land underneath the arena would be tax-exempt, and part of it is the MTA’s Vanderbilt Yard, “the MTA has an incentive to make a deal that maintains the tax exemption in order to maximize the price it receives for the development rights,” the IBO said in 2005.
It didn’t exactly happen, given that the MTA accepted a cash bid less than half the appraised value.
Posted by steve at 6:24 AM
January 14, 2009
Yanks stadium cost passes $2B, subsidies near $1b
Field of Schemes
by Neil deMause
There were plenty of fireworks at today's Assembly hearing on the Yankees and Mets stadium projects, but behind all the smoke lay a giant bill for the taxpayers. Stadium-boondoggle expert Neil deMause was on hand for all the action, both for his own site and the Village Voice's Runnin' Scared blog.
Today's New York state assembly hearing on the Yankees and Mets stadium projects can best be summed up like this: City economic chief Seth Pinsky complained about hearing chair Richard Brodsky calling the city's procedures "Soviet-style," then later quoted Edward R. Murrow to implicitly compare Brodsky to Joe McCarthy; and Brodsky, in his closing statements, offered to take on both Pinsky and Yanks president Randy Levine in a fistfight. Not, in other words, one of democracy's finest moments.
The real story, in any case, came after Levine, Pinsky, and almost everyone else had gone home: Economist George Sweeting of the Independent Budget Office presented new detailed estimates of how much the new stadiums are costing taxpayers in subsidies, and how much the teams are benefiting. I'll be updating my stadium cost spreadsheet [PDF] with the new numbers shortly, but in the meantime, some highlights: The total cost of the Yanks' new stadium is now well north of $2 billion, with taxpayers picking up $854.7 million of that tab; for the Mets, the cost to the public is now a mere $371.5 million. And that's without even counting the fact that neither team will pay property taxes, ever, thanks to a nifty tax dodge involving public authorities and 99-year subleases. [Emphasis added]
Runnin' Scared, When Elephants Fight: Not-quite-liveblogging the Brodsky Yankees Hearing
Part 1 of deMause's running commentary.
Runnin' Scared, Brodsky Hearing: IBO Says Mets, Yanks Stadiums Costing Taxpayers $1.2 Billion
And Part 2, featuring the IBO's subsidy bombshell:
Without going into details (check the IBO's website for those), the totals come to a total public subsidy for the Yankees of $854.7 million, more than half a billion of which will come out of state and city coffers; for the Mets, the total subsidy is $371.5 million, with the state and city on the hook for about $230 million. And this, it's worth noting, is without counting any lost future property taxes. Levine would probably turn orange at this point, but he, along with most of the rest of the onlookers, has gone home.
More coverage...
NY Observer, IBO: New Yankee Stadium Costing City, State $528 M.
AP via SILive.com, Lawmaker offers to fight Yankees prez over stadium
The president of the New York Yankees asserted repeatedly at a combative hearing Wednesday that the team's new $1.5 billion stadium — backed by hundreds of millions of dollars in public subsidies — is a good deal for the city, and he accused a lawmaker who offered to fight him of grandstanding for headlines.
The legislator, Assemblyman Richard Brodsky, lashed out at team president Randy Levine and city economic development chief Seth Pinsky, challenging both to a "civil, in-your-face fistfight" over public financing of the stadium.
...The subsidies for the stadium have sparked outrage in the middle of a global economic meltdown that has crippled the city's budget and cut thousands of working-class jobs while the Yankees doled out hundreds of millions of dollars for new players. The team, which last season failed to make the playoffs for the first time in more than a decade, signed pitchers CC Sabathia and A.J. Burnett and first baseman Mark Teixeira to contracts totaling $423.5 million.
AP via International Herald Tribune, Yankees feed at taxpayer trough because they can
I don't live in New York, so I'll leave it to the taxpayers there to be outraged or simply figure that's not a bad price for entertainment. But at a time when the unemployment rate is at a 16-year high, Americans are losing their jobs at the fastest rate since World War II, and cities and states are struggling for enough money to provide the most basic services, I'd lean toward outrage.
NoLandGrab: AP sports columnist Tim Dahlberg should indeed be outraged, since Federal taxpayers will be picking up the tab on several hundreds of million in subsidies for the Yankees and Mets.
Posted by eric at 8:45 PM
Yankin' Our Chain
Here's a round-up of some of today's stories about the Great Yankee Stadium Swindle.
amNY, City's share of Yankee stadium costs double
The city’s costs for the new Yankee Stadium have more than doubled in two years, said City Comptroller William Thompson, who accused the Bloomberg administration of low-balling its original estimate.
The capital cost for the city is now $325 million, up from its estimate of $129 million in 2006, the comptroller’s office said today.
“It’s willful. Costs don’t just go up dramatically like this,” said Thompson, a mayoral candidate.
...“The Yankees have spent $423.5 million on free agents this offseason — for them and the city to ask New York’s hard working taxpayers to foot the ever expanding bill on the new stadium is nonsensical and unfair, especially in difficult economic times,” said Councilman Eric Gioia (D-Queens), a candidate for public advocate.
The New York Times, Yankee Stadium Burdens Mayor’s Campaign
With a vote set on Friday on whether to extend $372 million in additional tax-free financing for the new Yankee Stadium, challengers to Mayor Michael R. Bloomberg are trying to halt the subsidies. State lawmakers have subpoenaed team and city officials to an emergency hearing on Wednesday, and what once looked like a gleaming example of the mayor’s financial skill is suddenly looking like one of his biggest vulnerabilities.
...What could give the stadium issue traction this year, however, is the city’s dire financial condition — presenting a stark contrast between struggling, insecure New Yorkers who don’t earn major league salaries, and the hundreds of millions of dollars the new stadium complex is costing them.
NoLandGrab: Remember, Bloomberg engineered the overturning of term limits on the ridiculous premise that only he could guide us through the current economic crisis. By giving our money away to the Yankees?
The New York Times, A New Yankee Stadium, the Same Old Politics
The city is proud of the deal, officials say, because it will create “1,000 permanent new jobs.” If you scratch into the official filings, it turns out that there are actually only 22 new full-time jobs expected. The rest are seasonal positions — valuable, certainly, but only if they really exist.
And what if the team doesn’t create 1,000 new jobs? Does the city have any mechanism to hold the team accountable, to get back some of its investment?
Asked about this on Tuesday, Mr. Lombino, the spokesman for development corporation, said there is none.
The New York Times, Yankees Try New Strategy to Market Premium Seats
The Yankees have hired a division of a prominent Manhattan residential real estate brokerage, Prudential Douglas Elliman, to help sell some of their prime real estate: unsold premium seats and luxury boxes at the new Yankee Stadium.
...Levine said that hiring Prudential Douglas Elliman was not an indication of a slow sales pace on high-end seats at the $1.3 billion stadium. Seven luxury suites remained to be sold, out of 59, and about 1,000 of 4,000 premium seats were available.
NoLandGrab: Sure, Randy, they're sellin' like hot cakes. So why did you have to hire Prudential Douglas Elliman? The Yankees haven't gotten any better at telling the truth in the 30 years since then-manager Billy Martin said "one's a born liar, and the other's convicted," in reference to rightfielder Reggie Jackson and owner George Steinbrenner.
The Neighborhood Retail Alliance, YanKeys to the City
Our old friend Richard Lipsky, who loves the Atlantic Yards project, hates the idea of subsidizing Yankee Stadium. Just for fun, substitute "Atlantic Yards" for "Yankee Stadium" in the passage below:
So, as we anticipate another election cycle where Mike Bloomberg will once again break all spending records, dramatically injecting his own version of an economic stimulus into the local economy primarily for his own benefit, we will be able to add the Yankee Stadium development to a long list of mega projects launched by a mayor who has lost sight of the needs of average New Yorkers in the pursuit of monuments to his own ego.
Posted by eric at 10:30 AM
As hearing on Yankees' bond request approaches, Brennan questions tax-exemption for stadium
Atlantic Yards Report
The hearing this morning that Assemblymembers Richard Brodsky and Jim Brennan will hold on the New York Yankees' request for some $430 million in additional tax-exempt bonds will inevitably get contentious, as Brodsky assured the the attendance of New York City Industrial Development Authority chair Seth Pinsky and Yankees president Randy Levine only via subpoena.
With them will be city Comptroller William Thompson, a mayoral candidate, who issued his own scathing criticism of the Yankees's plan yesterday, and asked that the IDA's planned hearing Thursday on bonds for the Yankees and the New York Mets be postponed. The fourth person testifying will be George Sweeting of the Independent Budget Office.
Posted by lumi at 5:46 AM
January 13, 2009
PRESS RELEASE: Assembly Committees Issue Subpoenas to Randy Levine, Yankees President, and Seth Pinsky, Chairman of the NYCIDA Board, on Public Financing of the New Yankee Stadium
Committees Seek Testimony and Documents Which Yankees and NYCIDA Have Failed To Produce
Chairman Richard Brodsky (D-Westchester) of the Committee on Corporations, Authorities and Commissions, and Chairman James Brennan (D-Brooklyn) of the Committee on Cities, issued subpoenas yesterday to Seth Pinsky, Chairman of the Board of the New York City Industrial Development Agency, and Randy Levine, President of the New York Yankees, to appear at the Committees' hearing tomorrow, January 14th, 10:00 A.M., at 250 Broadway, Room 1923 (19th Floor), and deliver documents regarding the public financing of the new Yankee Stadium. The Yankees and the NYCIDA have continued to stonewall the Committees’ requests for documents pertaining to the request for an additional $430 million in public financing, in the face of a NYCIDA Board vote on Friday, January 16 on the additional money.
Assemblyman Brodsky said, “The Assembly investigations of the NYCIDA financing of the new Yankee Stadium have already revealed that taxpayers will pay up to $4 billion to construct the new Stadium; that City agencies cooked the property tax assessment; that secret negotiations gave the City, at taxpayer cost, a free luxury suite at the new Stadium, and that the number of new permanent jobs created at the Stadium in exchange for $4 billion of subsidy was 22. The City and the NYCIDA are now seeking to railroad an additional $430 million of taxpayer money, on which the Assembly Committees have been seeking additional information for months. The City, the Yankees, and the NYCIDA have refused to make these and other documents available. The legislative oversight and legislative functions of the Assembly require the City and the NYCIDA to tell the Committees and the public the truth about this deal. Subpoenas, as always, are a last resort, but in this case were necessary.”
"It is obvious that additional public subsidy for the Yankees is both inappropriate and unnecessary and the New York City IDA should halt further tax-exempt financings based on diverted property taxes," said Assemblyman Brennan.
Posted by eric at 9:12 PM
Comptroller opposes Yankees' subsidies
Crain's NY Business
by Erik Engquist
City Comptroller Bill Thompson said Tuesday he opposes further city subsidies for the new Yankee Stadium, which he had supported in the past, and will vote against additional tax-free financing for the team unless the terms are changed.
His vote as a board member of the Industrial Development Agency will be largely symbolic, since the board is stacked with appointees of Mayor Michael Bloomberg, who supports requests by the Yankees for more financing.
"We need to get more in return to allow the Yankees to issue another $400 million in debt," Mr. Thompson said at a press conference at his office. "Incredibly, the Yankees are asking for more money and the city is giving it to them without asking for anything in return."
The Bloomberg administration disagreed. "In exchange for the new tax-exempt bonds, the city will receive $11.5 million in capital from the Yankees that can be used for our parks and infrastructure projects. Similarly, the Yankees application discloses that the team is putting $225 million of its own equity into finishing the stadium, which creates tax revenue for the city."
NoLandGrab: Among the many problems with this deal is that the Bloomberg administration is quick to leave out details that might prove inconvenient.
As Neil deMause reported on his Field of Schemes blog yesterday ("Yanks bond request includes $11m tax break") the IDA will also be voting on granting the Yankees exemptions on mortgage recording and construction materials sales taxes, totaling — surprise — $11.1 million, almost equal to the $11.5 million "capital contribution" the Yankees are making.
You can read the entirety of Bill Thompson's statement opposing further subsidies for the Yankees after the jump.
THOMPSON: CITY MISMANAGED COST ESTIMATES FOR STADIUM FINANCING
Comptroller Cites Lack of Oversight and Financial Competency as Cause of Inflated Expenses
New York City Comptroller William C. Thompson, Jr. today accused Mayor Bloomberg and the New York City Industrial Development Agency (IDA) of financial incompetence during negotiations for a new Yankee Stadium, saddling City taxpayers with astronomically steeper costs.
Speaking at a news conference, Thompson highlighted the upcoming IDA Board of Director’s vote on a new stadium financing plan as an opportunity for the City to rectify earlier oversights and errors.
“While our financial review cannot determine intent, this incredible mismanagement begs the question: Was this plain old incompetence or a blatant attempt to mislead the public?” Thompson said. “Either way, New Yorkers now have a box-seat view of fiscal mismanagement.”
In July 2006, the IDA approved a financing package with the Yankees to allow for construction of a new stadium. The debt package totaled $967,555,000: $942,555,000 in tax-exempt bonds and $25 million taxable. Direct capital costs to the City for related infrastructure projects, such as new parkland, were estimated at the time to be $129.2 million. These costs do not include the construction of new parking facilities, for which the City is also responsible.
“The original City capital contribution now has ballooned to $325 million, two-and-a-half times the amount we were told in 2006,” Thompson said. “With this deal, New Yorkers lose. At a time when we can least afford it, the Administration is bending over backwards to subsidize an enormously profitable corporation, one that just signed three players to contracts worth a total of $423 million.”
Thompson cited the following as examples of faulty cost estimates:
- The demolition of the existing Yankee Stadium was estimated at more than 50% less than the true cost.
- Failure to conduct environmental reviews, which would have taken into account the existence of, and necessity to remediate, oil tanks on the waterfront site of a planned new park.
- Underestimation of the cost for a rooftop park and retaining wall resulting in cost escalations of 30%; the price tag now stands at $44.5 million.
“We cannot continue to let New Yorkers lose in order for the Yankees to win,” Thompson said. “Next season, more and more families will be priced out of the very stadium they helped to build, as the minimum cost of a box seat alone will at least double from $250 to $500.”
Thompson’s review also examined the City’s lost revenue, such as an agreement to surrender use of 250 parking spots to the Yankees as part of its negotiations for a luxury suite, resulting in a loss of $500,000 in revenue per year. These ongoing negotiations likely will result in an additional loss of $750,000 in annual revenue from three billboards, on which the Yankees want the rights to advertise.
Similarly, the cost to the City for a luxury suite will total $1,250,000 annually, while other luxury suite purchasers will pay between $600,000 and $850,000. Under terms of the new agreement, the City has agreed to let the Yankees market the suite with a minimum payment of $100,000 per year.
“Anybody can see that this is simply a bad deal for New York,” Thompson said. “Yet it is the kind of financial incompetence that the Administration has consistently demonstrated when it comes to the new Yankee stadium. And incredibly, the Yankees are asking for more money and the Administration wants to give it to them without getting anything in return.”
Thompson’s office has held meetings with IDA staff to discuss the new financing plan and the status of related projects. This Thursday, the IDA Board of Directors will hold a public hearing regarding the proposed issuance of $371.8 million of new bonds, including both tax-exempt and federally taxable, together with a $60 million refunding of the existing bonds to move debt service out to later years. The IDA Board will vote on the plan Friday.
Some elements of the $371.8 million are said to include:
- $40 million in extra costs to accelerate construction.
- $60 million additional security costs at the behest of the New York Police Department.
- $92 million in scope modifications.
- $75 million in true cost increases.
- $65 million in “soft costs.”
“For all these reasons, I am calling for the vote to be postponed so that the City can negotiate a better deal,” Thompson concluded.
In November 2008, an audit conducted by the Comptroller’s office found that the Yankee’s underpaid the City more than $11 million in rent over a two-year period. As a result, the Yankees have since paid the City $7,352,519 plus interest of $635,132. The Yankees still owe the City another $4,035,636.
The full audit report can be viewed at www.comptroller.nyc.gov.
Posted by eric at 8:46 PM
9th inning for Yanks, Mets handouts
MetroNY
Neil deMause explains how much a second Yankee Stadium triple-tax-free bond "handout" is going to cost federal taxpayers, if approved, and why the richest team in pro sports really, really needs the money.
Is the city giving the Yankees $259 million? No. It’s in essence extending a $259 million low-cost loan, with the cost of the discount being covered by taxpayers. Cost to the public: about $90 million, most of it charged to the federal treasury.
What’s it for? Bigger scoreboard, a Hard Rock Cafe, “bathroom improvements,” you name it. Most of which have already been built and paid for, since the stadiums open in fewer than three months.
Why should we pay the teams for stuff they’ve already built? The city says it’ll earn a few million dollars in new taxes from the extra construction, and that the Yanks have kicked in a $10-million gift to the Parks Department. Unless the team is threatening to return their new faucets and void their check to Parks if the bonds aren’t approved, though, it’s hard to see how this is a gain.
NoLandGrab: Though deMause doesn't blame the Yankees' payroll for the need for mo' money, why should taxpayers in other cities be made to help enrich a rival ball club concurrently snatching up the most coveted free agents?
Posted by lumi at 4:44 AM
January 11, 2009
Atlantic Yards Report - Two We Missed
Atlantic Yards Report
Was value-engineered arena driven by revenue analysis?
GumbyFresh, who notwithstanding the moniker is pretty well-situated to observe the financial markets, thinks the news of the value-engineered arena was driven by a cold hard look at the costs and revenues.The New York Times's Charles Bagli, who appeared on the Brian Lehrer Show this morning, suggested it was a question of financing--a not dissimilar thing.
Brodsky, Brennan to hold hearing on Yankees' bond request a day before IDA hearing
The latest sports facility deals may have hit a bump in the road. Yes, the New York City Industrial Development Authority (IDA) has scheduled a hearing January 15 on $342 million in new tax-exempt bonds the New York Yankees and the New York Mets are requesting from the city, with a board meeting on approval the very next day.Not so fast, say Assemblymembers Richard Brodsky and Jim Brennan, who chair the Committee on Cities and the Committee on Corporations, Authorities and Commissions respectively. They've scheduled a hearing January 14 "in the face of the refusal by the City to postpone a final decision until a full understanding of the law and the facts could be brought forward."
Posted by amy at 10:14 AM
January 7, 2009
News Round-up: Evil Empire Edition
We're having a hard time deciding if the Evil Empire is the one in Yankee Stadium or the one in City Hall (probably both), but there's plenty of news today about how they're once again teaming up to stick it to the taxpayers.
It's not every day that we can say that the voluminous Norman Oder has posted a digest version of the news, but in this case, he's summarized the key stories, which are also linked in their entirety below.
Atlantic Yards Report, Documents emerge about stadium subsidies; mayoral candidates shy away from criticism
The big news in today's papers is that, as the New York Times reports, in an article headlined City Gives Up Its Stadium Suite in Exchange for Cash: After intense criticism, the Bloomberg administration has given up a perk it worked fervently to secure: a free luxury suite at the new Yankee Stadium.
But lower down in the article there's a hint at the larger story:
“Does the Bloomberg administration really think that giving up a suite at Yankee Stadium is going to soften the blow that this project has had on city taxpayers?” said Bettina Damiani, director of Good Jobs New York....Indeed, though Rep. Anthony Weiner, a stated mayoral candidate, criticizes the suite deal in the Times, Tom Robbins in the Village Voice points out that both Weiner and Comptroller William Thompson, a fellow candidate, are unwilling to criticize the larger question of taxpayer funds supporting the stadium via tax-exempt bonds.
If they're unwilling to raise that issue, it's unlikely they'd look closely at a similar funding scheme for the planned Atlantic Yards arena. The main critic of the stadium deals is Assemblyman Richard Brodsky.
The Village Voice, Mayor Mike and the Yanks: How Suite It Is
Tom Robbins's story, sub-headed City Hall gift-wraps another present for baseball's richest team, is a must-read for those of you interested in what a colossal screwing of the public looks like.
The 2009 mayoral campaign begins this month when the richest sports franchise in America puts its hand out for one more bailout. The New York Yankees—strike that—Yankee Global Enterprises LLC, the mega-corporation that controls all things Yankee, has already received $942 million in triple tax-free bonds courtesy of the Bloomberg regime to build its fabulous new stadium on city land where a wonderful tree-shaded park once stood near the Harlem River.
The mayor's people are spending most of their time these days ordering the closing of day-care centers and firehouses, insisting that the terrible economic situation dictates no other course. But on January 16, Bloomberg's team will pause from these chores to order its representatives on the city's Industrial Development Agency to approve another $370 million in tax-free bonds to finish the stadium project. According to the city's Independent Budget Office, this new round of financing will cost taxpayers roughly $48.5 million in foregone revenues. This is on top of the $181 million the team saved by having the taxes excused on its first round of financing.
The New York Times, City Trades Its Yankee Stadium Suite for Cash
Westchester Assemblyman Richard Brodsky appears to be the only politician in the entire state willing to raise questions about the propriety of spending hundreds and hundreds of millions of public dollars on new ballparks.
Assemblyman Richard L. Brodsky, who had sought details about the deals the city was making, described the city’s about-face over its use of the suites as “a terrible embarrassment.”
“The taxpayers who are paying for the construction of Yankee Stadium cannot afford to buy tickets for the games, but the mayor was getting a luxury box, so he had to back off,” he said in an interview on Tuesday.
“But the reason he backed off,” Mr. Brodsky speculated, “is because next week, the city is going to give the Yankees more taxpayer money.”
On Jan. 15, the Industrial Development Agency will hold a hearing over a recent request by the Yankees and the Mets for about $400 million in municipal bonds and other money to pay for the final construction stages at their stadiums. In 2006, both teams received about $1.5 billion in bonds and subsidies to help them build the ball parks.
Runnin' Scared [Village Voice blog], City Releases 116-Page Obfuscation of Stadium Deals
Neil deMause tries to peer through the NYC Industrial Development Agency's smokescreen.
Amid today's hoopla over the Bloomberg administration's decision to give back its free luxury boxes at the Mets' and Yanks' new stadiums - about which it's probably best said that the city decided that partying it up in a suite while the great unwashed paid through the nose for tickets didn't look so hot, so instead chose to take the value on a gift certificate - there was another development in New York's ongoing baseball stadium melodrama. This afternoon, the city Industrial Development Agency also released its cost-benefit documents for the $342 million in new tax-exempt bonds the teams are requesting from the city, in advance of a public hearing on January 15 to decide the bonds' fate.
Covering 116 pages, the paperwork -- released at 5:49 pm, the traditional time to dump documents on an unsuspecting press corps, knowing that few will have time to read them let alone track anyone down for comment -- goes into mind-numbing detail on just what gewgaws the teams would be using the money for: For the Yanks, such items as $38,608,134 for "Counter Terrorism Structure Hardening" and $4,750.000 for "Perforated Metal Mesh Panels Upgrades"; for the Mets, "Structural hardening and upgrade perimeter security" and "Modification of office and rotunda flooring material" (no price breakdowns provided).
Newsday, Bloomberg backs off ballpark suite deals for city
"Other cities get boxes and through our negotiations we made sure New York got no less, but we've decided to take the value in cash payments to return it to the community," said mayor's spokesman Andrew Brent.
NoLandGrab: In this case, "New York" = "the Mayor and his chief lackeys." The Bloomberg administration's magnanimity appears to know no bounds.
Metro NY, City drops luxe box at Yankee Stadium
The city is giving up the perk just one week before it decides whether to give hundreds of millions more in tax-free financing to both teams during a budget crisis.
Posted by eric at 10:03 AM
January 4, 2009
Mayor needs an economic plan
Crain's
While no one would suggest the mayor can solve all the local economy's ills, he needs to come up with new programs that offer immediate aid and support. He should start with the city's vital tourism trade, as well as small businesses and emerging industries. He must rethink his affordable-housing plan, which can't succeed unless there is more new construction, and he has to explain how he will keep such crucial projects as the redevelopment of the West Side rail yards, Atlantic Yards and Willets Point on track.
article
NoLandGrab: Wouldn't it be more important to start with explaining WHY these projects should be continued in their current forms when alternate plans would make much more sense and not wreak economic havoc?
Posted by amy at 9:53 AM
In governors' request for federal infrastructure aid, only a hint of (indirect) help for Atlantic Yards
Atlantic Yards Report
So New York State Gov. David Paterson, along with governors from other large states, has asked the federal government for a total of $1 trillion in emergency aid over two years for all 50 states.Could any of that be directed to Atlantic Yards? The news coverage wasn't clear, summarizing the request as including $350 billion for infrastructure; $250 billion for anti-poverty programs; and $250 billion in flexible education spending to maintain funding for programs from pre-kindergarten to higher education; and middle-class tax cuts.
Given that the "ready-to-go" projects are the focus, Atlantic Yards could not be directly affected. However, it's possible that a change in rules regarding the Low Income Housing Credit Program could make it easier to fund affordable housing destined for the project.
Posted by amy at 9:51 AM
January 3, 2009
Brodsky to IDA: delay vote on tax-exempt bonds for Yankees, Mets
Atlantic Yards Report
Assemblyman Richard Brodsky has asked the members of the New York City Industrial Development Authority--the bonding arm of the New York City Economic Development Corporation--to delay a January 16 vote on an additional $454 million in tax-exempt bonds the new Yankees and Mets stadiums.Brodsky, who chairs the Committee on Corporations, Authorities and Commissions, gave the board members documents he uncovered regarding "legal failures of the initial funding for Yankee Stadium" and said he's still waiting for "documents that clarify and explain the request for additional funding, the role of the IDA, and the role of other parties."
A public hearing on the funding request is schedule for January 15, with a vote scheduled for 9 a.m. the next day, the switch enacted after complaints that it had been scheduled for Inauguration Day, January 20.
"The spate of taxpayer bailouts of large corporations was at least justified by the threat that they would otherwise go out of business," Brodsky said. "There is no reason to provide public assistance to these hugely successful businesses at a time when taxes are rising, services are being cut, and jobs are being lost."
Posted by amy at 10:15 AM
December 30, 2008
Markowitz's Time Warp
Develop Don't Destroy Brooklyn noticed that The Brooklyn Paper has Brooklyn Borough President Marty Markowitz on record casually changing the creation story of Atlantic Yards:
Let's zero in on one comment by Beep Markowitz in his interview with The Brooklyn Paper's Gersh Kuntzman:
MM: ...We’ll see what the future brings. I am confident that [Atlantic Yards] is going to happen. I really am. I really am. I was hoping it would have happened in 2006, 2007, 2008, 2009, so if it’s 2011, it’s 2011, as long as I know it’s on track.
GK: Is it on track?
MM: I hear that. The train is at the station. It’s moving very slowly. We have to see what the future brings. … It was always going to be over the course of 12 years or 16 years.
Actually, it wasn't "always going to be over the course of 12 years or 16 years."
The project that was approved in 2006 was to take 10 years. But now New York State's agreements with Forest City Ratner give the "developer" 6+ years to build just the arena, 12+ years to build just Phase One (the arena and 4 or 5 skyscrapers), and no timeline whatsover to build Phase Two, which would comprise the bulk of the proposed "affordable housing."
This isn't the first time Markowitz has delivered his own version of reality. A year and a half ago, Atlantic Yards Report filed a story on Marty's creation myth.
Posted by lumi at 4:45 AM
December 23, 2008
Good Jobs NY Press Release: Bloomberg’s Economic Development Office Announces Rushed Vote on More Bonds for Yankees’ and Mets’ Stadiums
Back Door Giuliani-Era Practice Revived
New York, December 23, 2009 – Good Jobs New York today denounced the New York City Industrial Development Agency (IDA) for announcing a rushed vote on $454 million in proposed additional tax-exempt financing for the new Yankee and Mets Stadiums.
In the wake of a statement by New York City Comptroller William C. Thompson, Jr. assailing the IDA for scheduling the vote on Inauguration Day, the IDA has rescheduled the board vote for January 16, the day after the hearing, not the normal five days after. The rushed voting process revives the IDA’s practice of secretive and questionable economic development deals that were the norm during the Giuliani administration.
The new date for this important meeting gives IDA board members less than 24 hours to consider the testimony presented the previous day on two major projects that have been widely considered to be egregious corporate giveaways. This raises other transparency concerns such as:
- Deviating from regular IDA calendar: The IDA’s hearing on proposed financing for the projects is being held outside the normal monthly public hearing calendar. The regularly scheduled IDA public hearing for January is on the 8th (where a separate project will be presented), while the board meeting originally slated on the 13th has been cancelled.
- Weak board attendance: Since few IDA board members attend the agency’s required public hearings, it is unlikely that the majority of the board will have heard public testimony prior to voting on these two projects. Those members not in attendance must rely on copies of testimony submitted and the IDA staff’s reporting, as there are no stenographers at IDA hearings.
Moreover, the public financing scheme approved by the IDA in 2006 for the new Yankee Stadium is under investigation by the U.S. House of Representatives’ Subcommittee on Domestic Policy and by State Assemblyman Richard Brodsky. Earlier this month, for example, Brodsky revealed evidence that suggests communication between City and Yankees’ officials led the city to artificially inflate land values to support more bond debt.
“It is outrageous for the Bloomberg Administration to rush additional public financing for the wealthiest teams in baseball while city, state and federal legislators are grappling with the worst budget crisis in decades,” said Bettina Damiani, Project Director of Good Jobs New York. “How do entertainment corporations outrank the city’s infrastructure and employment needs?”
This rushed vote is a giant step backward for transparency at the IDA. In 2006, the IDA codified policies it had practiced since 2004 that made significant steps forward, including allowing more time between hearing and board meetings, and releasing cost benefit analyses and project applications five days prior to public hearings. These policies have enabled New Yorkers to participate in meaningful debate, as evident at IDA hearings when financing was proposed for various post 9/11 projects and for the initial allocation of tax-free financing for the Yankees and Mets, for example.
“We urge the IDA and the Bloomberg Administration to reschedule the vote until after the Inauguration, so board members have sufficient time to review public comments and IDA materials associated with the projects,” said Damiani.
Should the IDA board approve this financing, it will cost more than $80 million in lost tax revenue, bringing total public costs for both the Yankees and Mets deals to nearly $1.4 billion, with most going to the Yankee Stadium project.
The public hearing will be held at 10:00am on Thursday, January 15 at the IDA offices in Lower Manhattan, 110 William St., 4thFloor. The Board meeting to vote is currently scheduled for January 16 at 9:00am at the same address.
Posted by eric at 2:32 PM
As analysts call Forest City Enterprises stock worthless, local elected officials get a vague update on Atlantic Yards
Atlantic Yards Report
In light of ongoing lawsuits, federal intervention in the credit markets and the news that Morningstar just rated Forest City Enterprises' stock as worthless, Norman Oder speculates about the development company's options for more subsidies and delays for Atlantic Yards, and concludes, "if Forest City Ratner seems to be fighting hard to maintain Atlantic Yards, it may be because the parent company itself is at stake."
Posted by lumi at 5:18 AM
December 21, 2008
Lupica on Yankee Stadium: "It's a wonderful lie" (and NY mag on "perversely perfect symbols")
Atlantic Yards Report
Most of Daily News sports columnist Mike Lupica's column today, headlined It's a wonderful lie, concerns the revelations, many from his collegue, Metro columnist Juan Gonzalez, about the strange and sudden leap in the valuation of the land under Yankee Stadium.He writes:
So how come no politician in New York except Rep. Richard Brodsky seems to be asking the questions and carrying the fight on this? Or maybe the cozy relationship between the Yankees and City Hall that began when Yankee groupie Rudy Giuliani was mayor was turned over to Bloomberg like a well-turned double play. As always with the current mayor, pay close attention to what he does, not what he says.And I'll add: And will any politician look closely at the valuation of the land under the Atlantic Yards arena, assuming the construction plan and issuance of tax-exempt bonds moves forward?
Posted by amy at 11:17 AM
December 19, 2008
Indirect subsidies: how Forest City Ratner might save another $8 million (and a whole lot more)
Atlantic Yards Report has a must-read post for those who are trying to "follow the money."
Norman Oder explains how the value of subsidies for Bruce Ratner's Atlantic Yards megaproject have already been lowballed. Plus, he identifies another area where NYC is on the hook for unspecified millions:
For example, I estimated last month that Forest City gained nearly $55 million when the city reimbursed the developer $100 million for property in the AY footprint for which it spent $103.5 million--but was more likely worth $158.1 million.
And think I've identified another $8 million, given the transfer of city streets and the conveyance of city property for just one dollar.
Beyond that, the use in project documents of a term known as "extraordinary infrastructure costs"--which Develop Don't Destroy Brooklyn has aptly called "a blank check"--leaves open the possibility of much more public subsidy.
Posted by lumi at 5:16 AM
December 18, 2008
Atlantic Yards Report Double-Dose Financial Report
Atlantic Yards Report
Two items on Forest City's gyrations in trying to figure out how to continue to build a publicly financed stadium in the midst of a World financial meltdown:
A good way to increase cash flow is to delay paying for public properties while receiving public subsidies more rapidly.
So, now we know what Forest City Enterprises CEO Chuck Ratner meant when he told investment analysts in April that "we still need more" subsidies.
I commented that such a request might generate pushback from some elected officials. It did, and since then, the hemorrhaging of city and state budgets means that direct appropriations are very unlikely.
However, as the New York Observer reminded us this week, there are more ways to skin a budget, including:
- a delay in paying the Metropolitan Transportation Authority the $100 million (not $1 billion) it pledged to pay for the railyard
- additional subsidies boosting the affordable housing
- a speed-up in the city's pace to deliver the $100 million pledged
Will Gramercy Capital, its stock tanking, easily renegotiate loan with Forest City Ratner?
A loan made by Gramercy Capital Corporation to Forest City Ratner is coming due. Will FCR be able to pay? Will the loan be renegotiated? Stay tuned!
The company that lent Forest City Ratner nearly $153 million to buy property in the Atlantic Yards footprint has seen its stock price tank, as has the stock of FCR's parent Forest City Enterprises, as it awaits repayment of $177 million it dearly needs.
While the stock of Gramercy Capital Corporation reached $28.51 for its 52-week high, it closed yesterday at $1.32. In October, it suspended its third-quarter dividend to save $32.3 million. (FCE acted similarly last week.) The company might be a little antsy about getting repaid promptly and in full.
Posted by steve at 6:34 AM
Smoking gun: emails show how Yankee Stadium valuation was "jacked up"
Atlantic Yards Report
Note is made of incriminating emails that show, despite Congressional testimony to the contrary, New York City worked for the Yankees to cook the books and show a higher value for the land under the new Yankee Stadium. This allows the Yankees access to more tax-free bonds.
Daily News columnist Juan Gonzalez continues to look into the astounding inflation (from $26.8 million to $204 million) in valuation of the land under Yankee Stadium, apparently aimed to qualify for the amount of foregone taxes needed to pay off construction bonds via PILOTs (payments in lieu of taxes).
(Yes, Atlantic Yards watchers are waiting to see if something similar happens with the land under the planned $950 million arena.)
...
If the city cooked the books, the IRS could conduct an audit--and strip the bonds of their tax-exempt status. (Is there political juice for that?)
Here is Juan Gonzalez's article from yesterday's Daily News referenced in this Atlantic Yards Report story (it helps boil the blood and keep you warm on these cold mornings): E-mails reveal how city went to bat for Yankee to inflate value of stadium land
Posted by steve at 6:00 AM
Yankees Find New Uses For Bond Money
amNew York
Here's an example of the voracious appetite of professional sports organizations for public funds, no matter what the economic climate.
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Posted by steve at 5:49 AM
December 16, 2008
Atlantic Yards YES! Education NO!
When New York Governor David Paterson asserted, "During one of the greatest fiscal crises in our state's history, that is a level of funding we simply cannot afford," he was talking about education funding, not Bruce Ratner's highly subsidized $4 billion arena and high-rise megaproject.
Quote from Daily News, "Gov. Paterson: No education cuts now means worse cuts next year," November 26, 2008.
Posted by lumi at 5:54 AM
December 15, 2008
Atlantic Yards YES! Day Care NO!
If you're for Atlantic Yards, it doesn't get better than this — New York "City Plans to Reduce Aid to 21 Day Care Locations" (NY Times) while still supporting Bruce Ranter's subsidy-sucking Atlantic Yards megaproject.
Atlantic Yards YES!!!
Posted by lumi at 5:41 AM
Will sports be next in line for handouts?
MetroNY
By Neil deMause
With sports teams and leagues hemorrhaging cash, "We may now be looking at the first bailout bill for pro sports."
NoLandGrab: It could happen — after witnessing the amount of City, State and Federal assistance Bruce Ratner is trying to line up for his arena and high-rise megaproject, we'll believe anything.
Posted by lumi at 5:16 AM
December 14, 2008
Atlantic Yards YES! Cops NO!
From NY1: As Budget Shrinks, NYPD Faces Possibility Of Layoffs
The mayor has ordered all city agencies to cut spending by 7 percent or $1.4 billion, on top of the 5 percent cut he ordered last month.Police spokesman Paul Browne says layoffs might not be necessary if they can find other ways to cut costs.
But Kelly says with 94 percent of the NYPD's budget going towards personnel, the department may find no other way.
"If we make additional reductions it has to come out of our personnel stream, and everything will be on the table," said Kelly Friday. "And obviously, since we've already reduced with the first round of cuts, the next round will require layoffs."
If we're not going to have real cops, can we at least get RoboCop 3 to protect us from Delta City Atlantic Yards?
Posted by amy at 11:40 AM
December 12, 2008
Yankees Need More City Money
WNYC Radio
by Matthew Schuerman
Wonder how the Yankees can afford to make C.C. Sabathia the highest-paid pitcher of all time? Here's how.
It looks like the Yankees are going to get a little more help in building their stadium. WNYC's Matthew Schuerman reports that Mayor Bloomberg gave his blessing to issuing another $370 million in tax-exempt bonds for the team.
REPORTER: The Yankees need the money to add extra features to their new stadium. The team will pay the bonds back, but the city won't collect taxes from them. A Bloomberg administration spokesman says the Yankees have agreed to pitch in $11 million in return for getting these new bonds, resulting in a slight net gain for the city treasury of $2.3 million. That's hardly enough to make up for the tens of millions of dollars in extra costs the city has incurred since agreeing to the new ball park three years ago. But the spokesman says revenues from associated projects, such as parking garages near the stadium, may well make up that difference.
NoLandGrab: Yet more tax breaks for the wealthiest sports franchise in the entire U.S. are surely an important priority in times of financial crisis.
[Update: Sources are reporting that the Yankees have reached agreement with free-agent pitcher A.J. Burnett on a five-year, $82.5 million contract.]
Posted by eric at 5:04 PM
Excellent
ShysterBall
It's been a few years since I've watched the Simpsons regularly. Like a lot of people have noted, it lost its fastball years ago. But it's still crafty and knows how to get people out. Like the one from last Sunday, in which the idea of publicly funded stadiums was caught looking.
...(dual hat tips: to Atlantic Yards Report for writing about and linking to the whole episode, and to Pete Toms, for letting me know that Atlantic Yards was writing about and linking to the whole episode)
NoLandGrab: Wait a minute! First Crain's credits us for an Atlantic Yards Report story, and now Norman Oder gets credit for our Simpsons' coverage?
Posted by eric at 2:15 PM
December 10, 2008
Brodsky announces expanded inquiry into aid for stadium projects
Atlantic Yards Report
Given news reports of additional ($342.1 million, according to the New York Times) tax-exempt bonds for the Yankees and Mets stadiums, Assemblyman Richard Brodsky, chair of the Corporations committee, issued a statement saying he'll continue his inquiries.
We don't know if the Assemblyman has been reading NoLandGrab's occasional "Atlantic Yards YES!" items, but here's an excerpt from his press release:
"We don't have the money to fund trains, schools or hospitals, yet two of the richest, most profitable companies in the world are turning to taxpayers for support," said Assemblyman Brodsky. "What public interest is served by these subsidies, especially when average citizens cannot afford the enormous increase in ticket prices? Who is protecting the public interest? How can we afford these subsidies when we can't find the money to fund mass transit or schools without enormous tax increases? We're going to get answers to these questions."
What about the "Barclays Center?"
Note that Brodsky has not indicated that the inquiry would extend to the planned Atlantic Yards arena. Though construction has not yet begun, presumably some of the same discussions between the team owner and city/state officials are occurring.
Posted by eric at 8:43 AM
December 9, 2008
As Stadiums’ Costs Rise, City Agrees to New Bond Offerings
The New York Times
by Charles V. Bagli
Here's one Federal (and State and City) bailout that hasn't gotten a whole lot of scrutiny. This is a must-read if you would like to learn how you and your fellow taxpayers are being screwed for the benefit of a few powerful and monied interests.
With opening day for the city’s two newest baseball stadiums only four months away, the price tag for taxpayers continues to rise.
The Bloomberg administration has issued fresh estimates for utility work, lighting and the cost of replacing the parks and ball fields that once stood where the new stadium for the Yankees is being erected.
The city also plans to issue $341.2 million in additional tax-exempt bonds on behalf of the Yankees and Mets to complete the stadiums, whose combined cost is about $2.2 billion.
The teams are responsible for paying off the bonds, but they pay tens of millions of dollars less in interest because payments to bondholders are exempt from city, state and federal taxes.
The city and the state are also investing more than $660 million in parks, garages and transportation improvements around the stadiums and are providing the teams with an estimated $500 million in tax breaks related to construction materials and other items. The city had planned to issue a public notice of the latest bond offering and a required public hearing on Monday but decided to wait at least a week until it completed a cost-benefit analysis. With public costs mounting, critics of the deals say the city will be hard pressed to demonstrate that the economic benefits of the stadium projects outweigh the cost to taxpayers.
The man who rammed through the overturning of term limits on the premise that only he can guide us through the financial crisis likes to pretend that this is a good deal.
Mayor Michael R. Bloomberg has insisted that the city will earn a profit on its investment. And based on the city’s 2006 cost-benefit analysis of Yankee Stadium, the city would earn a net return of slightly more than $40 million over the bonds’ life.
Since then, however, project costs have swelled considerably. For instance, the city says it will cost $194.7 million to replace Macombs Dam Park and the ball fields now covered by the new Yankee Stadium on 161st Street, up 50 percent from the 2006 estimate of $129.2 million.
The city is also contributing $39 million toward the $91 million cost of building a Metro-North rail station nearby, an item that was not part of the 2006 cost-benefit analysis.
...Economists generally take a skeptical view of public investments in stadiums because the costs are so great, while most of the jobs they generate are seasonal and part-time. George Sweeting, deputy director of the Independent Budget Office, said, “The additional costs that have emerged make it quite likely that that the city’s net benefit number is now negative.”
NoLandGrab: We can't wait to see that new cost-benefit analysis. Given the City's history of skewing the number to fit its goals, this one ought to be good.
We hope that the City's analysis will explain how the projects' costs have soared at the same time that the greatest concern among economists and regulators is falling prices and the ugly prospect of deflation.
Posted by eric at 10:50 AM
December 6, 2008
Answers From Brian Lehrer of WNYC, Part 3
NY Times City Room blog
Michael J. Gaynor
Question: I wonder if you happen to know if the Mets gave ANY serious thought to erecting their new ballpark in Brooklyn — rather than Flushing. We have Robert Moses to thank for the noisy, automobile-friendly, stadium-in-the-middle-of nowhere called Shea — but why did the Mets erect their NEW ballpark there?Had they put it in Brooklyn — where the Nets’ new arena is going up (ballparks belong downtown; football stadiums belong in huge parking lots), reporters from the four corners of the earth would be here to cover the fairy-tale-come-true story.
The Mets longstanding tradition of dropping the public relations ball … continues.
— Posted by Richard
Answer: I, too, like downtown baseball stadiums with cityscape views. Of all places, Pittsburgh’s PNC Park is a good recent model — beautifully situated with the Steel City skyline (such as it is) over the outfield wall. But in the case of New York, imagine the real estate battles à la Atlantic Yards, the pollution, and the additional public subsidies for anyplace that could fit the bill. Meanwhile, the name Citi Field is fast becoming a joke. Shall we rename it Taxpayer Field? Federal Reserve Park? Cover the infield with the Henry Paulson TARP?
Posted by amy at 10:23 AM
December 5, 2008
Atlantic Yards YES! Seniors NO!!
If you had to choose between maintaining funding for programs to help seniors and subsidizing Atlantic Yards, naturally you'd choose Bruce Ratner's $4 billion megaproject.
WNYC News Radio, Cuts to City's Elder Abuse Program Puts Weakest at Risk
With the city facing a budget deficit that’s expected to balloon to $4 billion over the next two years, city agencies have been instructed to cut 7.5 percent of their budgets. Everything from daycare slots for low income families to dental clinics for kids, have been put on the chopping block.
One program slated for elimination by the Department for the Aging helps elder abuse victims – seniors who are taken advantage of because their age has made them weak and vulnerable. WNYC’s Cindy Rodriguez takes a look at who the program serves.
Posted by lumi at 4:50 PM
Atlantic Yards YES! FDNY NO!
Just the other day we were telling our friends, "If only the Mayor could deacitvate more engine companies and cut back FDNY staff to ensure aid to developer Bruce Ratner and his floundering Atlantic Yards megaproject."
From today's NY Post, FDNY'S SLASH AND BURN:
The FDNY will be slashing nighttime staff at a handful of firehouses around the city in a belt-tightening move that critics say threatens to increase response times and that has residents and union officials seeing red.
The department expects to save $9 million by deactivating three engine companies and one ladder for the overnight shift when the plan goes into effect on Jan. 17.
Posted by lumi at 5:28 AM
December 4, 2008
What’s in a Name? A Mets-Citi Bond
The New York Times
by Richard Sandomir
Last week, the government came to Citi’s rescue with a stabilization plan that includes backing $306 billion in mostly real estate assets, agreeing to absorb potential losses on that portfolio, as well as buying $20 billion in Citi preferred stock.
Banks are well represented in the universe of naming rights — from Bank of America and Wachovia to Chase, Citizens Bank and TD Banknorth — but those deals did not go into effect during a dire economy or cost nearly as much as the record sum that Citi is paying (which was matched by Barclays in its deal for the Nets’ arena in Brooklyn).
Without falling into bankruptcy, Citi could not seek to abrogate its deal. It was only in federal bankruptcy court that the Houston Astros got the name of the felonious energy company Enron off its stadium, but it cost them a $2.1 million buyout fee.
The Mets are standing by Citi, and Citi is standing by the Mets.
“It’s a binding agreement,” [Citi Vice Chairman Lewis B.] Kaden said in a brief interview, “and a good deal” that still fits Citi’s local and global marketing and philanthropic goals.
NoLandGrab: "Philanthropic goals?" The only philanthropy we see at play here are the generous gifts bestowed upon Citigroup and the Mets by the taxpayers.
Posted by eric at 11:32 AM
December 3, 2008
Mets: Citi Field will remain name of new ballpark
AP via Yahoo Sports, amNY, Metro, etc.
by Ronald Blum
Citi Field will remain the name of the New York Mets’ new ballpark following a government bailout the team believes will help the struggling bank survive its economic crisis.
Citigroup agreed in 2006 to pay the Mets $400 million over 20 years for naming rights to the stadium, scheduled to open next year. Two New York City councilmen said last week that the $800 million ballpark’s name should be changed to Citi/Taxpayer Field.
“The company is still an ongoing company and a vital company that is doing business around the globe,” Mets chief operating officer Jeff Wilpon said Tuesday. “The taxpayers are backstopping what’s going on in the global economy. It’s not really Citi’s fault that they’re in this problem. There are a lot of other banks in the same situation—with naming-rights deals, also.”
NoLandGrab: Sure it wasn't Citi's fault. And let's remember the taxpayers aren't just "backstopping what’s going on in the global economy" — we're backstopping the construction of local stadiums and arenas, too.
Posted by eric at 6:19 AM
December 2, 2008
Seating the Mayor at the New Yankees Stadium
WNYC Radio
by Matthew Schuerman
Hundreds of pages of e-mails, made public over the holiday weekend, are detailing the Bloomberg Administration's efforts to secure the free use of a a luxury suite at the new Yankee Stadium.
The Mayor's press office originally said in July that the Bloomberg administration had not decided whether it would accept the box.
But the e-mails show that back in early 2006, no fewer than four different city departments or agencies were fighting for more than six months to get the suite included in the stadium's lease.
In return for the luxury box, the city finally gave the Yankees an extra 250 parking spaces and the use of three billboards.
City Hall spokesman Andrew Brent says administration officials could not have been seeking any personal benefit since at the time of the negotiations, they assumed they would only have been in office to see one full season.
NoLandGrab: All the more reason to seek a third term!
Posted by eric at 7:02 PM
Giving the Mets’ New Ballpark a Bad Name
The New York Times
by George Vescey
With a mixture of rage and pride, I drove past the Mets’ new ballpark Monday and noticed that offensive name still up there.
As Citigroup grovels for a bailout from public funds, the Mets insist the name will not change. Not to give free publicity to these jokers, but as of this moment, the new stadium is still Citi Field.
My rage gave way to pride, however, knowing that we are all, in a broad sense, shareholders in the Mets. Civic benefactors. Patrons of the arts. Sportsmen and sportswomen, as franchise owners used to call themselves, before we wised up.
We are paying for the government subsidy — socialism at the top — so that this failing institution can keep its name on the Flushing skyline where Serval Zipper once stood so proudly.
...New ballparks are a source of amusement in the Bronx as well as in Queens. It was recently reported that the Bloomberg administration had bargained 250 extra parking spaces to the Yankees in exchange for a larger luxury box and free food for the high-profile schnorrers from City Hall.
This disclosure makes it easier to understand why the Bloomberg administration was so compliant about the vanishing of a neighborhood park that was so inconveniently in the way of the new Yankees playpen. The city claims it will eventually put in tiny little parklets on top of garages, but at least the Yankees respect their brand and are not selling their naming rights to some shaky financial institution.
NoLandGrab: The egregiousness of the public's forced underwriting of sports facilities owned by multi-hundred-millionaires or billionaires is made even more egregious when we have to underwrite the naming rights, too, the income from which all flows to the aforementioned filthy-rich owners, all while our term-limit-overturning mayor is horse-trading public money for luxury suites — meals included.
Posted by eric at 1:00 PM
A $950 million arena? Either that cost is bogus (goosed for PILOTs?), AY might now cost $6 billion, or the ESDC math was off
Atlantic Yards Report
The Yankees Stadium deal is being scrutinized because local officials inflated the value of the stadium in order to issue more low-cost federal bonds.
Is Bruce Ratner trying to do the same for a new Nets arena in Brooklyn? If that's the case, then the dramatically escalating cost of Ratner's arena starts to make sense:
Why exactly was the Atlantic Yards arena supposed to cost nearly $1 billion? The numbers just don't compute.
The rapid escalation of the cost of the arena--from $400 million in 2003 to $637.2 million at approval in 2006 to $950 million this year--significantly outpaces local inflation in construction costs.
That leads to some troubling speculations--even if the cost may have dipped a bit recently.
Has entire project cost jumped 50%?
If the $950 million figure is in fact accurate, then the entire Atlantic Yards project has increased in cost nearly 50% from $4 billion, and government oversight agencies should be taking a second look at whether a $6 billion project is remotely viable, as Develop Don't Destroy Brooklyn suggested in June.
Was value of arena inflated?
Alternatively, if the project cost as a whole has not gone up commensurately, the value of the arena may have be inflated by adding improper costs, perhaps in the same way as Assemblyman Richard Brodsky and Rep. Dennis Kucinich have alleged in their recent investigations of Yankee Stadium.
Posted by lumi at 4:02 AM
December 1, 2008
Brutally weird: Why a vacant lot in Alphabet City is (not) like the land under Yankee Stadium
Atlantic Yards Report
Follow Norman Oder on a tour of Manhattan's Lower East Side, as he tries to make sense of New York City's citation of a vacant lot in that neighborhood in setting the value of the land under the new Yankee Stadium in the Bronx.
But wait, let’s return to that vacant lot. That vacant lot is what the New York City Department of Finance (DOF) says should be compared to the South Bronx site hosting the new Yankee Stadium. That vacant lot is 4324 square feet, just a little less than one-tenth of an acre, while Yankee Stadium, at least when the city first assessed the site, was more than 17 acres, more than 170 times larger.
Not only is that vacant lot not comparable in size, it is not comparable in location. That vacant lot, according to MapQuest (below), is 8.71 miles away by driving; that route is slightly indirect, but the distance easily exceeds seven miles.
A DOF "comparable"
Yet that vacant lot was included in a list of “comparables” chosen by the DOF in an effort to value the land under the new stadium. That, critics on state and federal oversight committees say, was used to inflate the value of the property and allow more tax-exempt bonds to be issued, aiding the Yankees.
And, should tax-exempt bonds be issued for the Atlantic Yards arena, the comparables chosen by the DOF will deserve a close look.
Posted by eric at 6:14 AM
November 30, 2008
So, the 2006 IRS ruling the city requested for the Yankees hinged, in part, on a free luxury box
Atlantic Yards Report
No major daily newspaper has been looking hard lately at Atlantic Yards, but the press keeps running with the Yankee Stadium story, thanks in part to new revelations via Assemblyman Richard Brodsky. E-mail messages from city officials acquired by Brodsky tell an interesting tale, as the Daily News reports:
Mayor Bloomberg's top aides engaged in a behind-the-scenes brawl to win a free luxury suite at the new Yankee Stadium that could wind up costing taxpayers, e-mails show.Joseph Gunn, a city lawyer, in fact warned that the city would refuse to request a ruling from the Internal Revenue Service to allow tax-exempt funding if the city did not get the luxury suite.
As we know, such a Private Letter Ruling was achieved in 2006 for the Yankees and for the New York Mets. And the city this year successfully went to bat to get those rules grandfathered in for additional tax-exempt bonds for the baseball teams and, most importantly to the city, for tax-exempt bonds for the Atlantic Yards arena.
Posted by amy at 8:58 AM
The investigation into the city's practices regarding tax-exempt bonds isn't over
Atlantic Yards Report
In response to those who've prematurely assumed that the Atlantic Yards arena is dead, I've asserted that it is, rather, very much in play. Indeed, the recommitment of the Barclays Center naming rights deal is a sign that the project has some juice, even as the stock of parent Forest City Enterprises slumbers. (It´s still down nearly 90% from its peak, but up some 50% from its low.)At the same time, the Congressional investigation led by Rep. Dennis Kucinich (D-OH) into questionable assessments of Yankee Stadium also remains in play, as Kucinich has vowed. (“We’re going to continue our work here, make no mistake about that," he said after a hearing October 24.)
Should further and more concrete evidence of dubious practices be found, that would cast doubt on the tax-exempt bonds issued for the Yankees and, inevitably, the still inchoate plan for tax-exempt bonds issued for the Atlantic Yards arena.
In other words, even though more lenient regulations for the arena bonds were grandfathered in, questions will be asked.
Posted by amy at 8:56 AM
November 25, 2008
Pols want new name for Mets home: Taxpayer Field
AP via Yahoo Sports
Two New York City Council members say that Citigroup should show its thanks for a federal bailout by sharing the naming rights to the new Mets ballpark in Queens.
The struggling bank is slated to pay $400 million over the next 20 years to name the stadium Citi Field.
The bank made the commitment years ago, when it was flush with cash. Now that Citigroup is getting billions of dollars in federal aid, Staten Island Republicans Vincent Ignizio and James Oddo say the ballpark’s name should be changed to Citi/Taxpayer Field.
Citigroup and Mets chief operating officer Jeff Wilpon have been saying that they have no plan to alter the naming-rights deal for the ballpark, which hosts its regular-season opener April 13.
NoLandGrab: Given the hundreds upon hundreds of millions of dollars in public subsidies for the planned Atlantic Yards project, perhaps "Barclays Center" should be changed to "Barclays/NYC-NYS-Federal Taxpayer Center," unless Barclays does end up accepting aid from the British government, in which case "British" could be slipped in there somewhere, too.
Posted by eric at 6:49 PM
November 24, 2008
Citi, AIG Won't Drop Big Sports Sponsorships
Critics Slam Bailed-Out Firms' Pricey Deals for Naming Rights, Logo Placement
ABC News — The Blotter
by Justin Rood
Just because taxpayers are having to bail out financial firms to the tune of hundreds of billions of dollars doesn't mean those firms are giving up their expensive stadium naming-rights deals.
AIG, Citibank and a number of other federally bailed-out financial institutions have no plans to cancel hundreds of millions of dollars in sports team sponsorships, even as they take billions in taxpayer support, ABC News has found.
...Struggling Citibank just sealed a multi-billion-dollar emergency "backstop" deal with the U.S. government. The financial behemoth, suffering with billions in bad mortgage-related assets on its books, recently shed 53,000 workers and saw its stock price lose over half its value. Yet it's in a 20-year contract to pay the New York Mets $400 million to name the team's new stadium "Citi Field."
"This type of spending is indefensible and unacceptable to Citigroup's new partner and largest investor: the American taxpayer," said Rep. Elijah Cummings, D-Md., in a statement Monday.
..."Up until now they were businesses who could invest or waste their money as they see fit," said Taxpayers for Common Sense's Ellis. "But now we're the shareholders. And frittering their money away with naming rights and ties to sports teams isn't a really good investment of taxpayers' money -- particularly when credit markets are collapsed."
NoLandGrab: Barclays, which has a naming-rights deal with Atlantic Yards developer Bruce Ratner, has thus far resisted taking funds from the British government; some allege that's because Barclays' top managers don't want to have their compensation limited by government regulators.
Also:
Daily Kos, You are funding CITI's marketing efforts (and the New York Mets)
Posted by eric at 6:04 PM
November 23, 2008
How taxpayers might help the Nets land LeBron James
Atlantic Yards Report
The issue came up on the CUNY-TV talk show City Talk regarding the new Yankee Stadium, which I wrote about yesterday.One guest was Baruch professor Neil Sullivan, author of The Diamond in the Bronx: Yankee Stadium and the Politics of New York (2001, updated 2008),
He pointed out how the San Francisco Giants privately financed PacBell Park:
Everyone was, 'Ohmigod, you can't build these things, you'll have no money left for the ballplayers.' They signed Barry Bonds, they went to a World Series, they functioned fine.The great question in the off-season, one of the great questions that the Yankees will be considering, is do they make an offer to Manny Ramirez, that's going to be 20 to 25 million dollars... for four or five or maybe six years. Where do you think that money comes from? In this stadium game, one of the ways I think about it, the state picks up, the public picks up the capital budget for this private business. All of that money, hundreds of the millions... goes over to the operating side. They can go chase anybody they want.
Remember, the direct subsidies for Atlantic Yards so far total $305 million. The savings on tax-exempt bonds could be $165 million. Other subsidies and tax breaks would be enormous as well, though no one's produced definitive numbers.
That could help pay for a few good hoopsters.
Posted by amy at 11:34 AM
"Bloomberg's bombast": historian Siegel says sports facility subsidies don't pass cost-benefit analysis
Atlantic Yards Report
Historian Fred Siegel, writing in the 11/17/08 issue of the conservative Weekly Standard, doesn't forget that New York City Mayor Mike Bloomberg, in his first term--the one that even the Village Voice's Wayne Barrett praised--supported welfare for sports team owners.Siegel's essay, headlined Bloomberg's Bombast: New York's mayor buys himself a third term, begins:
The folks over at Newsweek have a sly sense of humor. They put New York mayor Michael Bloomberg on the cover of their November 3 issue and let him dispense fiscal advice to the next president. In the article, Bloomberg, who has presided over record levels of spending and debt increases, chastised "Washington" for putting us in a hole by "spending with reckless abandon for years." The lofty Bloomberg told Newsweek's readers, "Programs that don't pass a cost-benefit analysis, that have been driven by politics rather than economics, should be cut."This is excellent advice. But Bloomberg has never taken it. One of the few things economists agree on, for example, is that subsidized sports stadia are a bad investment of public funds. They are also one of Bloomberg's passions. The mayor tried and failed to subsidize a West Side football stadium to the tune of roughly $600 million, but succeeded in sending similar sums toward his developer friend Bruce Ratner for a massive Brooklyn project, centered on a basketball arena, now stalled, for which there was no demand.
Posted by amy at 11:29 AM
November 22, 2008
On CityTalk: "How much welfare do you think the Steinbrenners should get?"
Atlantic Yards Report
The Yankee Stadium deal was the subject of a scathing episode of the CUNY-TV talk show City Talk, taped November 11, which raised many issues that should be pursued regarding the planned Atlantic Yards arena.
One hot topic was press coverage of the subject, Oder explains:
Well, the press always likes to piggyback on a governmental investigation, and recent reports from committees led by Assemblyman Richard Brodsky and Rep. Dennis Kucinich certainly have provided a jump-start. Yankee Stadium is probably the poster child for questionable behavior, but it's not too late to take a look at Atlantic Yards, as pre-construction demolition and utility work continues.
Another question was of public ownership:
The reason for public ownership is to provide the opportunity to issue tax-exempt bonds. The same goes for the Atlantic Yards arena, which a federal appellate court described in a 2/1/08 decision as "a publicly owned (albeit generously leased) stadium." Yes, the developer would use PILOTs (payments in lieu of taxes) to pay for construction. But rent would be nominal.
Read the full article for epic coverage including "A brief history of machinations," the CBA and lost parklands.
Posted by amy at 9:40 AM
November 20, 2008
Daily Dis
Headline from today's NY Times:
"City Plans to Reduce Aid to 21 Day Care Locations" ...yet remains firmly committed to funding Bruce Ratner's Atlantic Yards megaproject.
Posted by lumi at 6:18 PM
Bloomberg: Blank Check for Ratner, No Check for Homeowners
Develop Don't Destroy Brooklyn
Mayor Bloomberg has signed a blank check for Bruce Ratner.
But now, after his power grab, he won't sign the $400 homeowner tax rebate checks:
"We have no money. This isn't a legal issue; this is a fiscal issue,'' Bloomberg said at a Brooklyn news conference today. "Obviously, we're not going to send out checks, and we'll have to find a way to balance the budget.''
"We have no money," but the blank check to Ratner is still signed?
NoLandGrab: Look, we'd be the first to admit that curtailing the property-tax rebate in tough economic times might be wise, given the need for cash for the MTA, schools and myriad other critical areas. But until the city and state say, "hey, maybe we oughtn't be bailing out a money-hemorrhaging NBA team by subsidizing a billion-dollar basketball arena," we don't feel much like volunteering to play the sucker. So just give us our damned $400.
Posted by eric at 4:17 PM
Times columnist: hard data needed to support benefits of projects
Atlantic Yards Report
David Leonhardt's Economic Scene column in yesterday's New York Times, headlined Piling Up Monuments of Waste, suggested that funding for the nation’s infrastructure was less of a problem than the inability to set credible priorities.
Scattershot system
Leonhardt writes:
It’s hard to exaggerate how scattershot the current system is. Government agencies usually don’t even have to do a rigorous analysis of a project or how it would affect traffic and the environment, relative to its cost and to the alternatives — before deciding whether to proceed. In one recent survey of local officials, almost 80 percent said they had based their decisions largely on politics, while fewer than 20 percent cited a project’s potential benefits.There are monuments to the resulting waste all over the country: the little-traveled Bud Shuster Highway in western Pennsylvania; new highways in suburban St. Louis and suburban Maryland that won’t alleviate traffic; all the fancy government-subsidized sports stadiums that have replaced perfectly good existing stadiums. These are the Bridges to (Almost) Nowhere that actually got built.
Well, the Atlantic Yards arena wouldn't replace a "perfectly good arena," given that the aging Izod Center is in another state and, without public transportation, is not the easiest place to visit. But federal taxpayers would subsidize new construction, even while a new arena in Newark could use a basketball team.
And, while the environmental review process in New York was extensive, was