Tuesday, July 31, 2007

"Gimme shelter" Metro NY 7/30/7

Gimme shelter
City looks for cover on Yankee garages

by patrick arden / metro new york

JUL 30, 2007
BRONX. The city’s pick to build parking garages at the new Yankee Stadium has already defaulted on one
taxpayer-financed project. And if it defaults this time, the city could be on the hook.

Despite the state’s kicking in more than $70 million, the city spent two years looking for a developer willing to take on the garages’ financial risk.

In March, they settled on Community Initiatives Development Corp., a not-for-profit that would qualify for $190 million in tax-exempt financing through the city’s Industrial Development Agency. Tax-exempt bonds would allow CIDC to pay back debt at the bargain rate of 5 percent, lowering construction costs.

But CIDC couldn’t cover a loan backed by $7 million in tax-exempt bonds issued by the Syracuse IDA in 1999 to build senior housing. In 2002, the project “was taken over by a nursing home operator who’s made it a success,” said David Michael, Syracuse’s director of economic development, who added CIDC was “just a financing conduit for the real owner.” Michael said the city would “probably not” loan money to CIDC again.

In April, CIDC exec Joseph Seymour, former director of the Port Authority, told Metro his firm is only a “pass-through to give the garages tax-exempt financing.” The money would go to a new subsidiary, Bronx Parking Development Corp., whose board would include representatives from city agencies.

With 81 games a season, profits would be slim, as Metro reported this month. In case of default, the city could be liable for the debt, said a spokesperson for Comptroller William Thompson, who has a rep on the IDA but couldn’t comment on the deal’s specifics.

At a Community Board 4 meeting last month, attorney Steven Polivy took credit for putting together the “private-public partnership.” Polivy works for Stadtmauer Bailkin LLP, which specializes in securing government subsidies for corporate clients. CIDC’s president, William Lowenstein, has had a long relationship with the firm.

That’s one of many backroom connections listed in a new report by watchdog group Good Jobs New York.

“The garages aren’t benefiting anyone but the Yankees,” said Good Jobs analyst Dan Steinberg. “These are costly municipal garages that will further pollute the South Bronx.”

Friday, July 20, 2007

"Your taxes help Yankees pay honchos" NY Daily News 7/20/7

Your taxes help Yankees pay honchos

Friday, July 20th 2007, 4:00 AM

City taxpayers subsidized the salaries of nearly a dozen top Yankees execs between 2001 and 2005 and paid hundreds of thousands of dollars for lobbyists for the new $1.3 billion Yankee stadium, a new report charges.

Team management even charged the city for the cost of hotel rooms for owner George Steinbrenner and his daughter Jennifer Swindall and for a percentage of the salaries of Steinbrenner's two sons, team executives Hank and Hal Steinbrenner.

The civic watchdog group Good Jobs New York says the money came from a $5 million annual "New Stadium" planning fund.

The fund - $25 million over five years - was approved by former Mayor Rudy Giuliani in his final days in office. It was financed with credits City Hall let the Yankees deduct from annual rent payments on its current stadium lease.

Giuliani gave the Mets a similar $25 million stadium planning deal before he left office.

The existence of these funds - technically called offsets to rent - have been known for years, but the report is the first to detail how some of the Yankees money was spent. The watchdog group has been a persistent critic of massive corporate subsidies for economic development.

The report found that in 2001, the Yankees charged $437,500 worth of front office personnel costs to the New Stadium fund. According to a team report submitted to the Parks Department, 30% of team President Randy Levine's time, 20% of Chief Operating Officer Lonn Trost's, 10% of Hal Steinbrenner's and 5% of Hank Steinbrenner's were charged to the fund. In later years, subsidies continued for the salaries of Trost and Levine.

Levine, who resigned as Giuliani's deputy mayor to become Yankees president in early 2000, played a key role in negotiating the team's rent deal in late 2001 - one that Giuliani made retroactive to January of that year.

That first year of the deal, the team also charged $14,779 in bills from the Regency Hotel to the fund. Among the charges was a lodging bill from April 2000 for George Steinbrenner and another in July 2000 for the Boss' daughter Jennifer Swindall.

"The report is not worth responding to," said Alice McGillion, a spokeswoman for the Yankees. "It is a rehash of the same failed arguments and inaccuracies.... It is disgraceful that 'No Jobs NY' continues to attempt to garner publicity by attaching themselves to the Yankee name."

The civic group's report also sharply criticized the Yankees' dispensing more than $400,000 from the planning fund for lobbyists, most of it for Powers, Crane & Company, the lobbying firm headed by former state Republican Party chair William Powers.

The Powers firm has received close to $1 million from the Yankees for its work on the stadium since 2002, according to the report and state lobbying records. In addition, the Mirram Group, headed by former Bronx Democratic Party boss Roberto Ramirez, received more than $300,000 from the Yankees in 2006 to lobby Bronx politicians for approval of the new stadium.

Bettina Damiani, director of Good Jobs New York, blasted the Yankees' use of city subsidies for firms that then lobbied state and city governments for more government aid.

"This is part of the complex legal and legislative efforts for planning a new stadium," said a source close to the Yankees.
According to Damiani, city and state subsidies for the new stadium have grown by another $150 million since the deal was approved last year - including money for a new Metro North station and additional funds Mayor Bloomberg announced recently in his new capital budget. Total city and state subsidies for the Yankees are approaching half a billion dollars, the report claims.

An official at the city's Economic Development Corp. called the new report "inaccurate."

Monday, July 16, 2007

"Nonprofits Are Strained by Impasse" NY Times 7/14/7

Here's an excerpt of the pertinent information. Click the title above to read the article at The Times website:

"A political impasse in Albany has cut off a critical source of low-cost financing for nonprofit organizations in New York City, ranging from operators of small homes for the developmentally disabled to the builder of large parking garages for the new Yankee Stadium in the Bronx.

"Since July 1, the city’s Industrial Development Agency, like its counterparts around the state, has had no authority to sell tax-exempt bonds on behalf of nonprofit organizations. That lapse is crimping the expansion plans of schools, hospitals and social-services providers, causing them to postpone projects or borrow at significantly higher interest rates, their officials said.

"The same lapse could also hold up plans for the Yankee Stadium project because the organization that was selected to build the parking garages is nonprofit, a status that allows it to borrow through the agency at interest rates as low as 5 percent. That entity, the Bronx Community Initiatives Development Company, wanted to sell $190 million worth of bonds this month to cover much of the project’s estimated cost of $281 million, according to an application it filed with the agency.


"But none of the pending projects are as politically sensitive as the stadium garages. City officials have been working for several months on a plan to build three garages around the site of the new stadium, which is under construction in the South Bronx.

"The city solicited bids for construction of the garages, which it said could charge no more than $25 a car in their first year of operation. But all of the bidders said the project would not be viable unless the city tossed in a large subsidy on top of the $70 million the state had already pledged.

"Instead, city officials decided to seek a federal subsidy in the form of tax-exempt financing through the industrial development agency. All they needed was a nonprofit organization to manage the project and a public benefit to justify the tax break.

"The organization they found was the Community Initiatives Development Corporation, a 15-year-old entity that says its mission is to “lessen the burdens of government associated with economic development projects and low-income housing development.” In turn, it created the Bronx Community Initiatives Development Company, whose sole purpose is to serve as the tax-exempt borrower for the parking garages.

"City officials said they hoped the borrowing freeze would be lifted in time for the garage developer to seek final approval at the industrial development agency’s board meeting on July 23.

"They also said they still must come up with a way in which the South Bronx community will benefit from this project. They said they were considering giving some of the surplus cash generated by the garages — if any —to Bronx Park."