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 it truly rigorous? After all, the Empire State Development Corporation counted benefits but not costs. And the press punted and never analyzed the study that Forest City Ratner paid for.
Posted by eric at 8:22 AM
November 17, 2008
Recession Is a Relative Term in Baseball
The New York Times
by William C. Rhoden
With much of the nation reeling, with banks failing, workers being laid off and homes being foreclosed, sports owners continue to build castles and pay players by the millions. At least one team, the Knicks, is paying a player millions not to play.
Recession? What recession?
...Sports leagues like the N.B.A., the N.F.L. and Major League Baseball are fairy-tale lands, an otherworld of packed stadiums, charter flights, multimillion-dollar training facilities, multimillion-dollar player contracts paid by multibillionaire owners.
Yet in a time of severe economic crisis, the leagues, at least for now, are holding forth, if not completely thriving.
NoLandGrab: Rhoden goes on to explore several reasons as to why pro leagues appear to be somewhat recession-proof, but he misses the the two most obvious: heaps of public subsidies and anti-trust exemptions.
Posted by eric at 11:13 AM
Why aren’t the Yankees making cuts, too?
amNewYork, Letters to the Editor
Supporters of public funding of local professional sports venues spew the same blah-blah-blah to justify the expense, but when the city is headed towards fiscal straights, pro-sports subsidies never seem to get cut:
I’ve got two questions for the Emperor of City Hall: 1. If “all” of NYC must take the pain of our government’s failures, what “sacrifices” are George Steinbrenner and the Yankees making? 2. If Bloomberg is telling the truth that stadiums are so profitable, why do the Yankees need hundreds of millions of our tax dollars? This has got to be the dumbest lie ever. And, if we taxpayers are paying for half of the new Yankee Stadium, why aren’t we getting half the eventual profits in return? Mike Antoinette better watch his head, because it seems like he’s losing it!
— Tanya O’Langan, Manhattan
Posted by lumi at 5:19 AM
November 15, 2008
NY State Never Sought Piece of Barclays Center Naming Rights Action
Develop Don't Destroy Brooklyn
Ratner's frivolous $950 million arena would supposedly be "privately owned" (it would be leased to Ratner for $1), yet the $400 million naming rights deal with Barclays bank (is it still $400 million?) is solely with the developer. The public gets nothing out of the lucrative naming rights deal on the arena it supposedly owns.Norman Oder did some FOIA searching to find out if NY State ever wisely tried to get any value out of the naming rights deal. What he found was that New York State was not wise. The state sure could have used that money.
Posted by amy at 10:19 AM
November 13, 2008
Did the state try to gain any value from arena naming rights? Apparently not
Atlantic Yards Report
Norman Oder tries to get at whether or not New York State even tried to get a piece of the naming rights for the Atlantic Yards arena, but finds that State and City agencies are not very forthcoming with answers. [Answer redacted]
Yesterday, Gov. David Paterson proposed $5.2 billion in budget cuts over the next 16½ months, with reductions in school aid, increased tuition at city and state universities, and reduced Medicaid reimbursements, among other things.
Perhaps administration officials--many of whom were not in charge at the time, actually--are wondering why exactly their predecessors allowed Forest City Ratner to claim the entire value of naming rights for the Barclays Center arena.
In response to a Freedom of Information Law request, documents received from the Empire State Development Corporation (ESDC) indicated that no effort was made to retain any such value, though at one point, a Forest City Ratner executive indicated anxiety about the developer being "punished" for the naming rights deal.
...Though the documents are scant, in several places they were redacted; the ESDC cited exemptions that allow agencies to deny access to records that are inter-agency or intra-agency materials which are not final agency policy or determinations and instructions to staff that that affect the public, among other things.
NoLandGrab: As far as those budget cuts go, it doesn't appear that Bruce Ratner has yet had to tighten his belt even one notch. What a surprise.
Posted by eric at 9:57 AM
November 11, 2008
And has the Atlantic Yards arena site been assessed? Not that I've been told
Atlantic Yards Report
In order to generate PILOTs (payment in lieu of taxes) sufficient for the Atlantic Yards arena bond, would the land under the arena be assessed in the same questionable way that the land under Yankee Stadium was assessed?
Norman Oder tries to get to the bottom of this question by requesting documents from various government agencies.
NoLandGrab: Regular readers may remember that, just last week, the City of New York refused to hand over documents concerning the Yankees Stadium deal to a US House Subcommittee investigating possible fraud.
Posted by lumi at 5:31 AM
Paterson's Billions in Cuts, As Bruce's Boondoggle Flounders Along
The mantra of "Schools, yes — stadiums, no" was wielded effectively by the Dolan family, owners of Madison Square Garden and Cablevision, in the fight against a Jets stadium on the west side of Manhattan.
Even though Develop Don't Destroy Brooklyn doesn't have the resources to launch a similar media campaign against Bruce Ratner's multi-billion-dollar boondoggle, during these tough economic times, the point still stands:
The New York Times reports:
Paterson Says Schools and Medicaid Face Cuts
Gov. David A. Paterson said in an interview on Sunday that he would almost certainly seek billions of dollars in cuts to Medicaid, as well as midyear reductions in school aid, to address New York’s worsening fiscal condition.
He also said he expected to urge labor unions to reopen the contracts they have struck on behalf of public employees as a way to avoid or decrease layoffs.
Such a step is reminiscent of measures taken by New York City in the financial crisis of the 1970s or moves made more recently by the Big Three domestic automakers to reduce their labor costs after years of granting steady raises and comprehensive health and pension benefits...
Still, New York State and New York City continue to sink hundreds of millions into Bruce Ratner's
frivolous billion dollar arena and parking lots Atlantic Yards projectmoney pit.
Posted by lumi at 5:11 AM
November 9, 2008
For Sports Teams, Mayors Play Ball at the City’s Expense
NY Times
JIM DWYER
The first incarnations of these deals came in the final hours of the administration of Rudolph W. Giuliani, and thus had the faint whiff of idolatry about them. (Mr. Giuliani was such a Yankees fan that he managed to buy four World Series rings from the team “at cost,” which apparently meant thousands of dollars less than their actual value. Somehow, the city’s chief executive can get discount jewelry from a sports company that was being subsidized with public funds, while the Conflict of Interest Board fined a school librarian $500 for displaying a book written by his daughter.)The Giuliani stadium deals were immediately canceled in 2002 when a new mayor took office — the hard-headed, clear-thinking businessman Michael R. Bloomberg. With the city facing a recession and the loss of income from the Sept. 11 attacks, Mr. Bloomberg said New York simply could not afford them. Maybe later, he said.
Over the next few years, Mr. Bloomberg proceeded to slather new layers of icing atop the Giuliani cakes. The stadium plans were reborn, richer than ever. As a result, on Saturday, there will be one of these hokey quasi-religious ceremonies moving home plate from the old stadium across the street to the new one.
This happens the same week that Mr. Bloomberg says he has to close health clinics, shut libraries one day a week, not hire a new class of cops and raise property taxes.
Atlantic Yards Report comments:
Perhaps he could turn his attention to the Atlantic Yards arena, for which Bloomberg claimed in 2004, "This will be done with private money, and any city monies of any meaningful size will be debt issues financed by the extra tax revenues that come from this."That was before the city pledged $100 million in subsidies, then added $105 million more. And the developer wants, at least, another $100 million.
Posted by amy at 11:47 AM
November 8, 2008
U.S. government bails out Bruce Ratner
dailyheights.com
One important piece of news lost in the din of election coverage was the federal government’s decision to free up millions of dollars in tax-exempt bonds for the Forest City Ratner (our old friend Bruce) development project at Atlantic Yards.The ruling gives Ratner access to $800 million in tax-free money to proceed with the construction of a new arena for the New Jersey Nets. The arena is only one part of a controversial $4 billion boondoggle that seeks to transform the yards into a sprawling commercial and residential complex.
But the joke may be on him — not to mention city and state officials that have blown taxpayer money fighting for him — because Ratner still needs to find investors willing to back the bonds. Jay-Z or no Jay-Z, the Nets were a hard sell before the market took a nose dive. With the economy writhing on the table right now, it’s going to be even more difficult to convince people to invest money in a basketball team that went 34-48 last year.
Posted by amy at 7:53 AM
November 7, 2008
City balks over Yankee Stadium documents
MetroNY
By Patrick Arden
Where there's smoke there's fire:
The Bloomberg administration is refusing to hand over documents requested by a Congressional subcommittee investigating how the city secured tax-exempt financing for the new Yankee Stadium. U.S. Rep Dennis Kucinich (D-Ohio) has claimed the probe discovered “substantial evidence of improprieties and possible fraud.”
NoLandGrab: The possible fraud lies in the fact that the City claimed a ridiculously high land value in order to justify the bond financing, but lowballed the land value in order to skimp on the replacement of the park land to the commmunity.
Aside from the fact that the deal may have cheated the federal government of future tax revenue, note that the high land valuation benefits the Yankees and the low land valuation cheats the community.
Is this why we need this Mayor more than ever to steer the City through these tough financial times?
Looking ahead, expect creative justifications for extraordinarily high valuations for the tax-exempt bond financing for Bruce Ratner's arena.
Posted by lumi at 4:23 AM
November 6, 2008
Higher Taxes for All...Except Ratner
Develop Don't Destroy Brooklyn presents a brief study in contrast:
From City Room:
Bloomberg Announces Layoffs and Tax Increase
Delivering a grim prognosis for the city’s economy, Mayor Michael R. Bloomberg announced plans on Wednesday to save $1.5 billion this fiscal year and next, by trimming 3,000 jobs from the city’s workforce, rescinding a popular 7 percent property tax cut and suspending the annual $400 property tax rebate checks that homeowners have come to rely upon...
Meanwhile, Bruce Ratner would pay no taxes on about 7 million square feet of housing and office space and an 18,000-seat arena, and collect hundreds of millions from the City treasury.
Posted by lumi at 5:36 AM
November 4, 2008
The Times takes a skeptical look at stadium construction figures (but not AY)
Atlantic Yards Report
If the Atlantic Yards arena moves closer toward construction, maybe the New York Times will take a skeptical look at the numbers behind it. Meanwhile, in today's article about baseball stadiums, headlined As Stadiums’ Costs Swell, Benefits in Question, there's a lot of skepticism.
NoLandGrab: While The Times's Charles Bagli didn't address the planned new arena for the Nets, anyone who still thinks that publicly funded sports venues are a swell idea should read the article.
Posted by eric at 12:16 PM
November 2, 2008
Barclays Taps Investors for $11.8 Billion in Capital (Update1)
Bloomberg.com
Barclays Plc, Britain's second-biggest bank, will raise 7.3 billion pounds ($11.8 billion) from a group that includes investors in Abu Dhabi and Qatar as credit-market writedowns deplete capital.Chief Executive Officer John Varley tapped sovereign wealth funds in the Mideast to avoid a U.K. government bailout plan that calls for overhauling management boards, capping executive salaries and banning dividend payouts. Barclays fell 12 percent in London trading today.
Posted by amy at 10:02 AM
October 28, 2008
Is "adoption" really "approval"? Looking more closely at ESDC board action in July 2006
Atlantic Yards Report
"Adopted?" "Approved?" "Accepted?" "Supercalafragilisticexpealedocious?" In ESDC World, the line between the real and the made-up seems a little fuzzy.
Norman Oder tries to ferret out the facts.
In the Atlantic Yards chronology, the meaning of one action by the Empire State Development Corporation (ESDC) is a key to whether tax-exempt bonds for the project would be grandfathered in under new Internal Revenue Service (IRS) rules.
Last week, I (like others) concluded that the ESDC's vote to adopt of the Atlantic Yards General Project Plan (GPP) at its 7/18/06 meeting likely constituted what the Treasury Department requires as "official action evidencing its preliminary approval of the project before October 19, 2006."
The issue may be more ambiguous. "Adoption" might also be seen merely as an agreement to release a "proposed" plan for public comment. On the other hand, "adoption" of a plan that receives no comment means it will go into effect, which does indicate approval.
Posted by eric at 8:16 PM
Jobs, housing, and (not) hoops: the city's justification for arena bonds
Atlantic Yards Report
Before a Congressional subcommittee hearing Friday regarding tax-exempt bonds for Yankee Stadium (and other projects), the New York City Economic Development Corporation, whose affiliate New York City Industrial Development Authority issues such bonds, produced a document called Yankee Stadium, Fact v. Fiction (PDF).
While the document only glancingly mentioned Atlantic Yards, the framework was quite curious. The tax-exempt bonds at issue would be used only to build the AY arena, not any other components of the project.
But what's the justification for the arena? Affordable housing and job creation. Most of the latter would be related to office, retail, and building services, not the arena. And affordable housing could be built without the arena.
Posted by eric at 7:40 PM
October 27, 2008
My Arena Bonds $1 billion's-Worth
Gumby Fresh
It's one thing for the IRS to give the nod to Bruce Ratner to seek triple tax-exempt bond financing for a new arena, but where is an overdeveloper supposed get these bonds and what are his prospects in a marketplace where investors are sitting on their hands?
Here are excerpts from Gumby's menu options for Bruce:
Let's look at the appetite for the arena's debt.... Here the omens are still fairly horrible. Broadly speaking, Ratner and his dudes at Goldman Sachs have four financing options:
1) Borrow the money directly from a bank. Tricky. We're mostly talking about foreign banks that would be lending him money, the same ones that are still on their knees and trying not to keel over, and such an option would not involve the use of a tax exemption, which Ratner's pretty much got in the bag now.
...
2) Go to a bond insurer to insure a tax-exempt bond issue. Things have been a wee bit quieter here.
...
3) Get a bank to insure the bonds. The Beekman Tower option. See above. You would get the tax exemption in this instance, but the capacity of the banks to support such a foolhardy venture as moving a second-tier franchise to a horrendously expensive arena in a crowded market in the middle of a downturn would be limited.4) Issue the bonds without any kind of enhancement. Or, could Goldman Sachs threaten enough of their municipal bond salesmen with firing to get the bonds to clear? Again, tricky. The universe of buyers for highly illiquid, low-investment grade infrastructure bonds is small and incestuous.
Posted by lumi at 5:52 AM
October 23, 2008
Bad Call: N.Y. Fans Are Getting Ripped Off
WNBC.com
by Gabe Pressman
The IRS has given the New York Yankees, Mets and New Jersey Nets the go-ahead to use tax-free bonds to pay for their new homes.
The new Yankee Stadium, the new Mets Citi Field and the Nets arena in Brooklyn will all benefit from this ruling and the taxpayers of New York will be ripped off. In baseball terms, it's a foul deal and the taxpayers are the victims of a bad call.
...Ultimately, of course, as ticket prices soar and the sale of luxury suites roll up millions of dollars in revenue for the teams, the citizens of New York will be deprived of money. We are a city of rabid sports fans, but New Yorkers will never be enthusiastic about money being taken out of their pockets.
It's a steal -- and not the kind to cheer about.
NoLandGrab: While the IRS's extension of this tax "loophole" will cost New York's taxpayers several million dollars, it'll cost the citizens of the nation's other 49 states hundreds of millions of dollars. And to think people are angry about bailing out banks.
Posted by eric at 2:20 PM
When AY GPP was "released" in July 2006, was that preliminary approval?
Atlantic Yards Report
Last we checked, words do matter. So what are we supposed to make of Norman Oder's latest discovery?
THE RULE
To grandfather in a project [for eligibility for triple tax exempt bonds], the [IRS] rule requires a governmental entity to have taken "official action evidencing its preliminary approval of the project before October 19, 2006."
"APPROVED" VS. "ADOPTED"
While the Modified General Project Plan for Atlantic Yards was formally approved in December 2006 by the Empire State Development Corporation (ESDC), a slightly different version, the General Project Plan (GPP), had been "adopted" (according to an agency press release) by the ESDC on July 18, 2006.
"PRELIMINARY APPROVAL"
Though that ESDC board action in July was likely cursory, the IRS rule still seems tailored to comments filed by the city and state regarding the definition of "preliminary approval." Thus I (and most others) concluded that the ESDC's "adoption" of the GPP qualifies as "preliminary approval" under the regulation.
"RELEASED"
Developer Forest City Ratner's Atlantic Yards web site does not use the term "approval" to describe the action at that July ESDC board meeting.
It does not use the term "adopted."
It uses the term "released," adding that the ESDC's action "formally started the public review process."
...
The New York Times's coverage that day used "release":The report’s release sets into motion a public comment period. The project faces a final vote by the development corporation’s board this fall, and if it is approved, it will face a vote by the state Public Authorities Control Board.
The IRS may well consider that "preliminary approval." But the public sure didn't know it.
NoLandGrab: Bruce Ratner and his political backers are having it both ways.
To satisfy legal requirements for NY State land-use review, the plan had to be "released", "approved" and "adopted," according to a timetable set by the State Environmental Quality Review Act (SEQRA).
On the other hand, to satisfy the recent federal ruling that grandfathered the project under old IRS rules for Payments in Lieu of Taxes (PILOTs), the project needed "preliminary approval" at some point before the IRS closed the loophole in October, 2006.
Swap "release" for "preliminary approval" and you've got a loophole in a loophole.
Posted by lumi at 7:14 AM
Did DePlasco really mean what he said?
Develop Don't Destroy Brooklyn highlighted the following from Forest City Ratner spokesperson Joe DePlasco's recently released statement on the IRS ruling on triple tax-exempt bonds:
The tax exempt financing was always part of the plan for the development of the arena and the regulation released today acknowledges that.
Atlantic Yards Report points out the IRS regulation says no such thing and the Associated Press noted that the IRS regulation specifically said nothing about Atlantic Yards.
Since no one can figure out exactly what DePlasco is talking about, might we assume that "the plan" "the regulation released... acknowledges" was something agreed upon behind closed doors?
Posted by lumi at 6:05 AM
IRS OKs Tax-Exempt Bonds For Barclays Center, Other NY Venues
SportsBusiness Daily (subscription only)
IRS officials this week ruled that Nets Owner and Forest City Ratner CEO Bruce Ratner for his planned $950M Barclays Center in Brooklyn "can use tax-exempt bonds to pay for the building, providing some rare good news for the delay-plagued project," ...
Posted by lumi at 4:51 AM
October 22, 2008
Tax-Exempt Bonds: The Evening Wrap
Here's the rundown on today's coverage of the IRS's decision to tighten a "loophole" on the use of PILOTs to finance arenas and stadia — only the Yankees, Mets and, maybe, the Nets, have slipped the knot.
Gothamist, Atlantic Yards Project Gets Big Bond Break from IRS
These New York teams may be hard-pressed to find investors who will buy the bonds, given the current Wall Street turbulence. Not so incidentally, the ruling comes four days before Yankees president Randy Levine and city officials are expected to testify at a Congressional hearing investigating the tax-exempt financing of the new $1.3 billion Yankee Stadium. Representative Dennis Kucinich, who is holding the hearing Friday, has threatened to prosecute officials if they lied about the value of the land the new stadium occupies.
State Assemblyman Richard Brodsky, a Westchester Democrat, slammed the IRS decision, telling the Times and the AP, "This is the same kind of socialism for the rich, and capitalism for the rest of us that’s gotten us into the current economic mess...The rules don't apply if you've got enough juice."
Curbed, Atlantic Yards Crap Tossing V.3.5: Financing Edition
The IRS issued a ruling yesterday that has monstrously huge implications for anyone that will ever want to build a stadium or arena ever again (don't go to sleep yet...this is big). You wouldn't know it in NYC, though, because even though it impacts the new Yankee Stadium and Citi Field, it's playing out as an Atlantic Yards story. At issue is whether tax-free financing can be used to build Frank Gehry's $950 million arena. (Leaving aside the issue as to anyone will ever finance a facility that is sure to go above $1 billion given traditional Gehry cost overruns in the middle of one of the most massive credit meltdowns in history.) The ruling creates a loophole for projects that are "substantially in progress," while banning it for new ones.
The Angry New Yorker, Tax Free Stadiums
Hey if I want to build myself a new house, think I can get me some tax free bonds to pay for it?
Brownstoner, Treasury Dept. Hooks Up Ratner Big-Time
One potential snag for FCR: The new regs require that the bonds be issued by December 31, 2009.
Gowanus Lounge, So, Does Mr. Ratner Get Tax-Free Bonds for Atlantic Yards?
The key phrase is that it grandfathers in projects “substantially in progress.” We can see lawyers and bureaucrats arguing this point about Atlantic Yards until we live in Green-Wood Cemetery.
Be sure to check out Gowanus Lounge's reflections on the ethics of subsidizing arenas.
Develop Don't Destroy Brooklyn, Ratner Spokesman Vs. Treasury Department Spokesman on IRS Regulation
Bloomberg News, New York Yankees, Mets Get Approval for Tax-Exempt Bond Funding
Village Voice [Runnin' Scared blog], Atlantic Yards Gets Tax Break, Or Not
The Times spoke to Daniel Goldstein of DDDB, who "said it appeared to him that federal tax officials went out of their way to help the developer," the paper writes, "which he said 'makes no sense' when the federal government is in the midst of a costly bailout of the banking industry." Actually it does make sense: the bailout is an attempt by the powerful to restore a failed, obviously unsustainable confidence scheme to viability; this tax break (if it is a tax break), ditto.
Posted by eric at 9:18 PM
Treasury Gets Tough On PILOTs
Tighter Regs Issued As House Panel Opens
The Bond Buyer
by Peter Schroeder
Some industry insight into yesterday's IRS ruling, including the news that said ruling increases the risk for buyers, which might in turn make the bonds tougher to sell — unless you're George Steinbrenner, Fred Wilpon, or Bruce Ratner.
The Treasury Department yesterday issued more restrictive final regulations for bonds issued by payments in lieu of taxes, just three days before a House panel is scheduled to hold a hearing questioning the use of PILOTs to finance the new New York Yankees stadium.
But the rules contain a transitional provision that appears to enable the New York Yankees, Mets and Nets to continue to issue PILOT bonds as planned without having to comply with the new rules.
...David Caprera, a partner at Kutak Rock LLP in Denver, said the new regulations will require a shift in how many market participants view PILOTs.
...Since the PILOTs must be tied to taxes, Caprera said the new regulations shift a small amount of risk to the bondholder, who cannot be guaranteed a fixed payment, and unexpectedly low tax revenues could jeopardize a timely payment.
Posted by eric at 1:39 PM
Bailout! Feds save Ratner millions with new ruling
The Brooklyn Paper
by Sarah Portlock
"Joe the Plumber" has been all the rage for the past week. Now, courtesy of the U.S. Treasury Department, we bring you "Bruce the Plunderer."
The Treasury Department has bailed out Bruce Ratner.
In a much-anticipated ruling issued late Monday, the federal agency exempted Ratner’s Atlantic Yards project from a ruling that bars the use tax-free bonds to finance stadium projects.
Atlantic Yards was apparently exempted because it is “substantially in progress” — a term defined as having received “preliminary approval of the government” and involved “significant expenditures” before Oct. 19, 2006; and having a finance plan in place that contemplated the use of tax-free bonds.
...“It’s a slight of hand that allows the city to stick it to taxpayers on behalf of developers,” said Neil DeMause, author of “Field of Schemes,” which focuses on the massive public cost of stadium financing.
Posted by eric at 1:11 PM
IRS to give Bruce Ratner a huge federal tax break to build arena
There's a lot of coverage of the IRS's ruling to grandfather in federal tax breaks for Bruce Ratner's Nets arena and a new round of bond financing for the Yankees and Mets ballparks.
Atlantic Yards Report, In IRS regulations allowing tax-exempt bonds, no need for messy democracy like an elective body
In short, the IRS decided that Payments in Lieu of Taxes would no longer be allowed for sports stadiums after October 2006. For the old rules to apply to the planned Nets arena, the project had to be underway before that. How is that possible when the project wasn't approved until the following January? Norman Oder explains the IRS's twisted logic:
Anyone watching 12/8/06 meeting of the unelected Empire State Development Corporation (ESDC), with all of four board members (of seven, with one vacancy) in attendance could conclude that the project was rubber-stamped. Moreover, some board members had but a vague notion of project details.
But that wasn't the key decision made by the ESDC board. The key decision was made July 18, 2006, when the ESDC announced that it had "adopted" the General Project Plan (GPP) and "accepted" the Draft Environmental Impact Statement (EIS).
...
In between, in October, the Internal Revenue Service (IRS) proposed new regulations to tighten tax-exempt bonds for sports facilities.
...
Apparently, the regulations don't require action by an elective body.A "governmental person (as defined in §1.141-1)" of the Treasury Regulations is "a state or local governmental unit as defined in §1.103–1 or any instrumentality thereof."
And what's §1.103–1? "[A]ny division of any State or local governmental unit which is a municipal corporation or which has been delegated the right to exercise part of the sovereign power of the unit."
In other words, a handful of appointees of Gov. George Pataki showed up at a meeting on July 18, 2006 and gave their OK to stacks of documents they hardly read--or didn't read at all. And that meant the project was on its way, even if the chronology sent by the city and state to the IRS was bogus.
The Associated Press, via International Herald Tribune, New tax rules would allow NYC teams to float bonds
Updated tax rules issued Tuesday limit the way tax-exempt bonds can be used to pay for sports facilities but don't block the New Jersey Nets, New York Yankees and New York Mets from using billions of dollars in bonds to help pay for their new homes, state and city officials said.
The NY Times, Developer of Nets’ Arena Can Use Tax-Exempt Bonds
Lead real estate reporter Charles V. Bagli filed a story today:
Under the new ruling, federal officials essentially gave a green light for the three sports arenas, among the world’s most expensive, to use tax-exempt bonds. But tax experts said that the ruling would not allow other governments to issue such bonds on behalf of professional sports teams. The rule was adopted on Monday by the Treasury Department and the Internal Revenue Service.
Still, the New York teams may have difficulty finding investors who will buy the bonds, given the current turmoil on Wall Street and in the credit markets.
...
[Develop Don't Destroy Brooklyn spokesperson Daniel] Goldstein said it appeared to him that federal tax officials went out of their way to help the developer, which he said “makes no sense” when the federal government is in the midst of a costly bailout of the banking industry.
The Real Estate Observer, IRS Gives Thumbs Up to Tax-Free Bonds for Yankees, Mets, Nets [Updated]
The new IRS regulations are here [Word doc]. They grandfather in any projects that had "preliminary approval" before October 19, 2006. The baseball stadiums were approved prior to then, though Atlantic Yards did not get a final approval until the end of 2006. Still, officials seemed to be under the impression that ruling cleared all three teams to qualify for tax-free bonds.
Also, here's Forest City Ratner pr guru Joe DePlasco's statement:
“We are of course very pleased with the Treasury Department regulation. The tax exempt financing was always part of the plan for the development of the arena and the regulation released today acknowledges that. The regulation will help us move forward with a project that is critical to the on-going economic vitality of Brooklyn and the City.”
NY Daily News, IRS clears way for tax dollars to help new stadiums, arenas
Critics blasted the taxpayer subsidy as a waste of money at a time when the city and state are cutting costs in schools, mass transit and more.
"We can't fund the MTA and we're cutting back on city hospitals," said Assemblyman Richard Brodsky (D-Westchester), whose committee is investigating the Yankees deal.
"This is more socialism for the wealthy, where taxpayers are asked to fund a stadium they can't afford to go to."
NY Daily News, Just call the new Yankee Stadium the House That Tax Subsidies Built
Columnist Juan Gonzalez examines the chicanery behind the Yankee Stadium financing, which just got a boost from the same IRS ruling that made Bruce Ratner happy.
The Star-Ledger, Nets get favorable ruling from IRS
The Empire State Development Corp. expects to issue an unspecified amount of tax-free bonds to fund the arena early next year, Warner Johnston, a spokesman for the agency, said.
...
Nets owner Bruce Ratner is seeking up to $800 million in tax-free financing. The IRS ruling means New York state can issue the bonds, Johnston said.The Brooklyn plans are being closely watched in New Jersey, where some elected officials have hoped the Nets will scrap their Brooklyn arena plans and move to the year-old Prudential Center in Newark or stay at the Izod Center in the Meadowlands.
Curbed, IRS Decides Tax-Free Financing for Atlantic Yards Okay
[The IRS ruling] may or may not help the Atlantic Yards project get financed if the credit market isn't interested, but the project has won a big victory today.
Nets Daily, IRS Approves Tax-Free Bonds for Barclays Center
The blog that tracks all things Nets calls it a "big win for Bruce Ratner."
Two blogs posted Develop Don't Destroy Brooklyn's press release, denouncing the IRS ruling on the basis that the project wasn't approved until after the October 2006 rules change:
Yonkers Tribune, IRS Today Rules Bruce Ratner's Barclays Center Arena Not Qualified for Tax-exempt Bonds
Daily Gotham, IRS to Bruce Ratner: No Way!
Posted by lumi at 6:34 AM
October 21, 2008
New IRS rules stoke Atlantic Yards fight
The Internal Revenue Service issued rules Tuesday on whether the Nets basketball arena planned for Brooklyn can access $800 million in triple tax-free bonds.
Crain's NY Business
by Erik Engquist
The Internal Revenue Service issued rules Tuesday that dictate whether the Nets basketball arena planned for Brooklyn can use $800 million in triple tax-free bonds. The developer, Forest City Ratner, says it can; arena opponents say it cannot.
A layman’s reading of the IRS rules seems to support the position of the developer and its partner in state government, the Empire State Development Corp.
The issue—which like everything else concerning Forest City’s Atlantic Yards project will probably be decided in a courtroom—could determine whether the arena gets built. Forest City has said it could get private financing to build the $950 million venue, but that might not be possible in the current credit market.
The IRS rules say one condition that the arena must have met is that “a governmental person took official action evidencing its preliminary approval of the project before October 19, 2006.” The board of ESDC, the state’s development agency, approved the general project plan of Atlantic Yards in July 2006.
But the arena’s opponents will likely challenge that stipulation.
“The general project plan wasn’t legally binding, and it wasn’t anything that [Forest City Chief Executive Bruce] Ratner could legally rely on to do his project,” said Daniel Goldstein, a spokesman for project opponents.
NoLandGrab: So if Atlantic Yards already had "preliminary approval" in July of 2006, why did we all stand in line for hours for the public hearing for the Draft Environmental Impact Statement on August 23, 2006, endure a fractious, mismanaged hearing, and submit volumes of written testimony?
We knew the whole process was bogus, but this takes the cake.
Posted by eric at 9:41 PM
October 16, 2008
If You Build It, Will They Pay?
Luxury stadiums are on the rise. A top seat can cost $150,000. Beer costs extra.
Newsweek
By Johnnie L. Roberts and Andrew Murr
[T]he Yankees are hardly alone in finding new ways to gouge fans; their premium seats are a bargain when compared with prices in Dallas just for the right to buy a season ticket: as much as $150,000. In the latest sign of hyperinflation in the sports business, a slew of ultraexpensive venues are rising, or have been built recently, across the country from Dallas to Washington to New York—where not only the Yankees, but also the Mets, Jets, Giants and New Jersey Nets will all be getting new digs (the New Jersey Devils got a new arena last year). The total price tag for the New York-area building boom alone: more than $5 billion.
Of course, with the nation's financial system teetering, all this construction couldn't be coming at a worse time. Many of the sports industry's most golden gooses, including financial-services giants and automakers—might have a tough time scrounging up thousands of dollars for a seat these days, and might have to slum it with the hard-pressed masses in the cheap seats (meaning under $100 each at Yankee Stadium). These new sports palaces were conceived in a more conspicuous era, and as such they're replete with luxury suites, upscale club seating, catered food and any number of high-tech distractions. Each stadium has an economically stratified seating scheme that will have fans scraping their pocket bottoms or, in a few cases, even mortgaging their homes (if anyone can get a loan these days).
Of course, Norman Oder has already posted this comment:
Though the article states that "not only the Yankees, but also the Mets, Jets, Giants and New Jersey Nets will all be getting new digs," construction has not begun on the new Nets arena in the Atlantic Yards project in Brooklyn, which faces various challenges (lawsuits, credit crisis, availability of tax-exempt bonds).
Posted by lumi at 7:37 PM
Kucinich schedules hearing October 24 on Yankee Stadium and future of PILOTs
Atlantic Yards Report
Rep. Dennis Kucinich (D-OH), Chairman of the Domestic Policy Subcommittee of the House Committee on Oversight and Government Reform, yesterday announced a hearing October 24 during which Seth Pinsky, President of the New York City Economic Development Corporation, and Randy Levine, President of the New York Yankees, are expected to answer tough questions about the deal to use PILOTs (payments in lieu of taxes) to repay bonds for the new Yankee Stadium. The hearing also may cast doubt on a similar plan for the Atlantic Yards arena.
...
The hearing will examine not only whether the [Yankees] stadium valuation was "gamed" but also "whether the City’s efforts to stop finalization of proposed U.S. Department of Treasury regulations that would effectively prohibit the use of PILOTs in this context serve the public interest."That larger issue points directly to the city's effort to get tax-exempt bonds for the Atlantic Yards arena grandfathered in under the same loose 2006 ruling--which the chief counsel of the IRS called a "loophole" the agency immediately proposed to close--that enabled PILOTs for the new Yankee Stadium and Mets stadium.
The difference, as I've written, is worth perhaps $165 million to Forest City Ratner on $800 million worth of tax-exempt bonds. And this issue, more than any other, may be the biggest hurdle facing the arena.
Posted by lumi at 6:01 AM
Stadiums and the Economy
The Washington Times, "Sports Biz" (blog)
By Tim Lemke
If there's one area that truly will impact the world of sports, its the credit markets, where lending has practically halted and no one is handing out tons of free cash like in the past. Any team looking to build a new arena or refinance is probably going to find themselves in a pinch.
The good news is that most of the teams entering new facilities in the next year or two had already nailed down funding before the big problems on Wall Street. The Cowboys, Giants, Jets, Yankees and Mets were well on their way to building their stadiums and should be in OK shape when their facilities open in 2009 or 2010.
The NBA's New Jersey Nets, on the other hand, are facing some problems in getting their new arena in Brooklyn.
Bruce Ratner's stalled Nets arena is the only example cited in the article, which reviews all of the recent roadblocks, from the credit crisis, to IRS rules governing tax-exempt bonds.
Posted by lumi at 5:52 AM
October 15, 2008
Kucinich Steps Up Pressure on NYC Officials
Develop Don't Destroy Brooklyn
Congressman Dennis Kucinich (D-OH) sent a 16-page letter to New York City Mayor Michael Bloomberg yesterday (with 12 additional pages of attachments), raising "serious questions" about Yankee Stadium land assessments, PILOTs and tax-exempt financing. Can similar questions about the still-known-as Barclays Center arena be far behind?
DDDB has the press release, along with a link to the Congressman's letter, which also includes a reminder to the Mayor:
I request that the City promptly fully comply with the Subcommittee's requests for documents that should have been produced on August 6, 2008 — over two months ago — and provide two witnesses for the upcoming Subcommittee hearing.
Posted by eric at 8:00 PM
Your Name Here?
What happens to a stadium name when the company goes bust?
ABC News