Thursday, April 27, 2006

"Council OKs teams’ financing schemes" MetroNY 04/27/06

Or you can say "City Council decides that corporate welfare for Steinbrenner's billionaire team is more important than funding fire, police and emergency medical services for the rest of us."

Council OKs teams’ financing schemes

by patrick arden / metro new york

APR 27, 2006

CITY HALL — Nearly $1.4 billion in tax-exempt financing to build new stadiums for the Yankees and the Mets was passed yesterday by the City Council. The Mets plan to break ground this summer, while the Yankees still need federal approval for its use of parkland.

But both teams also need the IRS to approve the legality of the city’s financing scheme, because tax-exempt bonds can’t be used to finance stadiums unless the debt is repaid with money that would normally go to the city. Under the current plan, the teams would service their tax-exempt bonds with payments in lieu of property taxes, or PILOTs, though they currently pay no property taxes. The city’s Independent Budget Office said this may not fly with the feds, and it wondered what city taxes could equal the large size of debt payments required from the teams.

Before yesterday’s vote, Speaker Christine Quinn recalled the Council’s fight last year for the right to approve the city’s use of PILOTs. In those debates the city’s corporation counsel testified that PILOTS “are not revenues to the city,” while the Council claimed otherwise. Quinn said, “It is an appropriate use of PILOTs to allow for both of these stadia to get tax-exempt financing.”

Councilman Charles Barron disagreed. “At a time when they’re increasing rent in public housing, the Mets and the Yanks get free rent,” he said. “In the long run, the only people that are going to benefit tremendously from this are the Mets and the Yanks.”

Jeff Wilpon, chief operating officer of the Mets, was grateful for the city’s subsidy, and said an 11th-hour community partnership agreement the team reached with Queens Councilmen was “fair.”

“I think it’s good to spend money on the poor, but it’s also good to spend money on the stadiums,” said Wilpon.

And what if the team doesn’t get its tax-exempt bonds?

“We’ll be fine if it doesn’t go through,” he said, “but we’re hopeful.”

City’s budget priorities

Top 10 “highlights” in the mayor’s 2006-2010 capital plan (in millions).

• Bridges: $2,521

• Affordable housing: $1,980

• Croton water facility: $1,050

• Street reconstruction: $864

• Transfer stations: $483

• Street resurfacing: $432

• New stadiums for the Yankees and Mets: $265

• Fire and EMT facilities: $215

• Dam reconstruction:$210

• Police facilities: $133


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