Wednesday, November 16, 2005

Yankee Stadium $$$

Neil deMause, author of "Field of Schemes"--a must read, by the way--has a nice analysis of all the money the city will spill on the Yankee plan. It's in this week's Village Voice. Click the title to read it.

"It's in the lease terms, though, where you find the gravy for the Yanks. First off, while the Yankees would pay operations and maintenance at Yankee Park at Adidas Field, they would no longer have to pay rent. While Bloomberg has presented this as a wash, the parks department reports that the Yankees have in recent years averaged $7.5 million in annual rent payments— after deducting maintenance. Over 30 years, then, letting the Yanks play rent free would cost the city the equivalent of $103 million in up-front cash; for good measure, Bloomberg has proposed kicking in $15 million in rent rebates for the team's final three years at Yankee Stadium.

"As rent goes, so go property taxes: The Yankees would pay none. So-called "as-of-right" bonuses for building in the outer boroughs would provide a partial tax break in any case—more on that in a bit—but the special tax break alone would cost the city about $44 million in present value. A 100 percent break on sales tax for construction materials would net the team another $22 million.

"Finally, while George would foot the construction bill, the state would be the one actually arranging the financing, in order to take advantage of triple-tax-exempt bonds. (As with the now dead West Side stadium for the Jets, the Yankees would repay these bonds with "payments in lieu of property taxes" to evade IRS scrutiny.) Tax-exempt bonds offer lower interest rates, at the price of passing along a chunk of costs to the federal, state, and city treasuries; IRS regs limit the team's potential benefits, but $55 million is a reasonable guesstimate.

"The public's total Yankees outlay now stands at $374 million—and that's before factoring in a new Metro-North station or other transit improvements (the city insists they're not part of the stadium deal), shortfalls in state parking revenue (or losses to the city if state garages siphon off customers from existing city-owned lots), or cost overruns in building the new parkland, which could amount to tens or hundreds of millions more. Just counting those as-of-right tax breaks, part of a 20-year-old program to lure businesses to the lagging outer boroughs, would tack on an extra $299 million in city subsidies."


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