Friday, October 12, 2007

"Yankees pull a squeeze play with stadium rent" Daily News 10/12/7

Yankees pull a squeeze play with stadium rent
Friday, October 12th 2007, 4:00 AM

The Yankees have failed to adequately account for $14 million the team deducted from its city rent bill the past two years - money team executives say they used for planning costs for the new Bronx stadium.

City officials confirmed yesterday they are challenging more than $9 million the team deducted from money it owes the city for its 2006 stadium rent.

In addition, thousands of canceled checks and invoices the team submitted to the Parks Department to justify the $9million deduction - plus an additional $5million deduction the team took for 2005 - are in such disarray that Yankees executives agreed last week to submit the paperwork all over again.

According to records the Yankees filed, copies of which the Daily News reviewed in a Freedom of Information request, the team grossed nearly $300 million last year from stadium admissions, concessions and cable TV receipts. Yet it paid $2.3 million - less than 1% of total revenues - in rent to this city.

Without the $9 million deduction and other credits the team took for stadium maintenance, the actual rent to the city would have been more than $17 million.

Among the documents the Yankees submitted to the city as deductions for "New Stadium Planning Costs" was a bill for more than $25,000 for hotel lodging for the players and coaches at the Fairmont Olympic Hotel in Seattle in August 2005. The Yankees played a series with the Mariners during those dates.

Then there was an August 2006 tab for $11,000, covering the cost of 9,000 copies of 8-by-10-inch photos of players. Exactly what team travel bills and promotion photos have to do with planning a new stadium is anybody's guess.

"We've spoken with the Yankees, and all parties agree the receipts are not complete," said Parks Department spokesman Warner Johnston. "We received many expenses never intended to be accepted as rent credits. They [the Yankees] are making amendments, including a list of which expenses are to go to the rent credits and which do not."

But beyond just the bush-league accounting of baseball's most storied franchise is the bigger controversy over whether the Yankees had the right to claim the $9 million credit for last year.

In 2001, then-Mayor Rudy Giuliani negotiated a five-year lease extension that allowed the team to deduct up to $5 million in stadium rent each year for planning costs for the new stadium.

The deal was followed by a similar three-year extension by Mayor Bloomberg. Between the deals, the team received what amounted to a $40 million public subsidy of the new stadium.

Both agreements, however, required the Yankees to submit proof to the city that the costs incurred actually went for the new stadium. The Giuliani lease extension specified that the Yankees could deduct "the lesser of" $5 million each year or the "planning costs incurred by the tenant for such calendar year."

During those first five years, the team claimed only a total deduction of $16million in new stadium costs. Then last year it deducted an additional $9 million retroactively for costs from 2001 to 2004 - something city lawyers say doesn't appear to be permitted by the lease.

"The city is reviewing whether the $9million plus in credits claimed for costs in 2001 and 2004 ... whether they can now take that credit," a Law Department source said.

"We just disagree and we think it's covered in the amendments to the lease," said Alice McGillion, a spokeswoman for the Yankees, when told of the city's challenge.

As for all the ineligible bills the Yankees submitted to the city, McGillion conceded some errors were made, but said they would be fixed in the amended material the Yankees are preparing.

"We welcome the scrutiny and an audit," McGillion said. "We're confident the submission will pass muster."

But Bettina Damiani, the director of Good Jobs New York, a nonprofit economic group that has long opposed the huge public subsidies for the new stadium, isn't so sure.

"Yankee officials have perfected the art of corporate giveaway," Damiani said. "None of us would be permitted to manage a personal property transaction this way. Why do they get to play with our tax dollars so easily?"


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