Wednesday, September 24, 2008

"New Yankee Stadium destined to be a cash cow" Globe and Mail 9/24/8

Click the title to read the entire article. Here's an excerpt:

Think about this: Bank of America, one of the few remaining entities in the People's Republic of Wall Street, has reportedly agreed to pay $20-million a year over multiple seasons for naming rights to … well, something. See, the Yankees won't sell naming rights to Yankee Stadium. They're going to sell naming rights to different parts of the stadium, such as gates. You know: “Hey, let's meet outside the Bank of America gate.” Or, “Let's get tickets in the Bank of America bleachers.” You get the picture. They're talking about sponsoring each entry gate at the ballpark. That's right: each stinking gate.

There's a cottage industry in baseball right now guessing about the ultimate impact of the new Yankee Stadium on revenue. The Yankees will be allowed to amortize their stadium-financing costs over 40 years, under terms of baseball's collective agreement, which will skim just slightly less than $8-million off the amount they'll pass along in luxury-tax payments – or about 8 per cent of the Blue Jays' payroll. If you want to look at it in a cock-eyed way, lessening the amount of money the Yankees will be required to throw into revenue-sharing means other teams are subsidizing the new ballpark. Nice.

In a 2006 bond prospectus prepared in conjunction with New York City's Industrial Development Agency, the Yankees estimated a new stadium will generate at least $250-million from ticket and luxury-suite revenues, compared to less than $200-million in the old park. The team could net $30-million annually on concessions. Those figures are acknowledged to be conservative...

Tuesday, September 23, 2008

"City's field of schemes in Bronx?" Daily News 9/22/8

City's field of schemes in Bronx?
Monday, September 22nd 2008, 8:46 PM

A newly rediscovered photo of former grass field near Yankee Stadium has stirred activists. A parking lot since the 1970s, it has often been used as an off-season ballfield.

A recently discovered photograph of a baseball diamond just west of the old Yankee Stadium has reignited questions about whether the city is actually replacing all of the recreational parkland taken for the Bombers' new arena.

The 2.89-acre parcel between 161st St. and the Macombs Dam Bridge approach was paved over in the 1970s, and served as extra stadium parking during the season, but was left open to the public for the rest of the year.

It will soon be the site of a parking garage for the new stadium. But the Parks Department did not include the asphalt ballfield in its calculation of the recreational park facilities the city must, by law, replace as part of the stadium project.

"The site was used for parking at the old stadium, and it will be used for parking at the new stadium," said Parks spokeswoman Jama Adams.

A chain-link backstop, along with painted bases and foul lines, are the only remnants of the ballfield's glory days as the well-maintained natural-grass baseball diamond shown in the undated archival photograph. Parks recently supplied the photo to a filmmaker making a documentary about the stadium project.

Locals and activists say the asphalt field remained in off-season use, and should be counted as park space lost to the project.
"There's no other way to say it but that they lied about it," said Geoff Croft of NYC Park Advocates, who said he played ball at the site as a child. "They have ignored these facilities."

Parks denies the painted baselines and backstop indicate the parking lot was intended for off-season use as a ballfield.

"This parcel of parkland has been operated as a parking lot by a garage operator since at least the mid-1970s," said Adams.
"During the baseball season, the site was locked by the garage operator, and so it was not open for recreation. During the off season, the site was not locked."

Adams acknowledged locals may have used the site in the off season, but said that did not mean the city had to count it as a recreational facility.

"While it is entirely possible to use the parcel for some recreational purpose during the winter months and there were remnants of the parcel's former use as a multiuse play area," she said, "its primary purpose has been as a parking lot for Yankee Stadium."

Monday, September 22, 2008

"Foul Ball: Congressional Committee Criticizes New Yankee Stadium Deal" AM Law Daily 9/21/8

Foul Ball: Congressional Committee Criticizes New Yankee Stadium Deal
September 21, 2008 10:45 AM

Posted by Brian Baxter
Ohio congressman and former Democratic presidential candidate Dennis Kucinich is not a fan of the New York Yankees.

Before the historic baseball franchise closed out its last game at Yankee Stadium on Sunday night with a 7-3 victory over the Baltimore Orioles, North America's most successful professional sports team was the target of political vitriol during a Capitol Hill hearing on Thursday.

Kucinich, chairman of the House Oversight and Government Reform Committee, claimed that the Yankees and New York City officials had conspired to misrepresent the value of city land to the IRS for purposes of obtaining sweetheart tax deals from the federal government for the construction of a new stadium in the South Bronx (pictured here).

"The practice of providing taxpayer subsidies to the building of sports stadiums is a transfer of wealth from the many to the wealthy," Kucinich said at the start of the hearing. "[N]ot only have we found waste and abuse of public dollars subsidizing a project that is for the exclusive benefit of a private entity...but also we have discovered serious questions about the accuracy of certain representations made by the City of New York to the federal government."

That would seem to put the Yankees' lawyers directly in the crosshairs of the diminutive Democrat. Akin Gump Strauss Hauer & Feld senior counsel Randy Levine is the team's president--he was also deputy mayor for economic development and planning during the Giuliani administration--and team COO Lonn Trost is the former head of the sports law practice at defunct New York firm Shea & Gould.

Nixon Peabody public finance partners Bruce Serchuk and Mitchell Rapaport were retained by the Yankees and the New York City Industrial Development Agency (NYCIDA), an arm of the New York City Economic Development Corporation (NYCEDC). Serchuk, who worked in the office of tax policy at the Treasury Department and in the IRS's chief counsel office, is considered one of the primary architects of the Yankees's strategy to obtain over $940 million in tax-exempt bonds to help finance construction for the team's new stadium, set to open on April 16 of next year.

The team requested an additional $350 million in tax-exempt bonds in June to cover construction of a giant video screen and other stadium-related cost overruns. With a price tag approaching $1.6 billion, the new stadium ranks as the most expensive sports complex ever built in the U.S. New York City will retain ownership of the land but won't charge the team rent or property taxes.

Kucinich and New York state pols like local Assemblyman Richard Brodsky, who testified at Thursday's hearing, directed their criticism on the valuations of land in the South Bronx put forth by the Yankees and the city.

Kucinich and Brodsky allege that the Yankees and the city deliberately misstated land values in Macomb's Dam Park--the city parkland where the new stadium is being constructed--citing assessments of between $45 per square foot to $275. Brodsky testified that the values are more akin to Manhattan property prices, and that the city and the Yankees fudged the numbers in order to obtain increased public funds. (The IRS allowed the city to issue tax-exempt bonds based on property values--the higher the value, the more the Yankees could borrow; Brodsky issued his own report on September 16 slamming the team and the city for subsidies.)

"This subcommittee's still ongoing investigation has uncovered substantial evidence of improprieties and possible fraud by the financial architects of the new Yankee Stadium," said Kucinich.

No one from the city or the Yankees testified at Thursday's hearing and neither Serchuk nor Levine responded to requests for comment. A Yankees spokesperson declined to comment, as did a representative for Boies, Schiller & Flexner--the firm the team traditionally turns to for litigation work.

Some lawyers with experience in stadium financings contacted by The Am Law Daily say that Kucinich's criticisms are nothing but cheap shots designed to garner headlines.

"[Stadiums] generate significant economic benefits in terms of associated sales tax, improved property value, urban revitalization, and they're a marquee asset and destination," says one public finance lawyer who requested anonymity. "These are not a one-way street of public dollars making rich people richer, but true public-private partnerships for economic development, as much as any other single asset you can imagine. But they don't come free."

As this lawyer sees it, without the tax breaks, the Yankees would have likely moved the stadium to another nearby region--like New Jersey or Connecticut--that would have made the tax breaks available. And, some argue, the people of the South Bronx--the nation's poorest congressional district--are better off with the Yankees than without them. (For a breakdown on the exemptions and subsidies being provided by the city, state, and federal governments, click here for a spreadsheet compiled by New York City's Independent Budget Office.)

"Infrastructure assets in most parts of the world are financed on a public-private-partnership basis where the line between what's public and private is not a black-and-white thing," the public finance lawyer says. If, for example, Toyota considers building a plant near San Antonio, and the city chooses to roll out an economic development package to entice the company to build there, is that giving away private money or encouraging economic development for the sake of revitalizing a region?

"A year ago you would have said we have a free market economy. Today the government owns an insurance company and it's about to own the entire mortgage market."

This source, who is familiar with the new Yankee Stadium deal but has no direct involvement in it, rejects Kucinich's allegation that any of the lawyers involved did something illicit in lining up financing for the House That Jeter Built.

"We're talking about many, many teams of lawyers working with the IRS, which issued a private letter approving the structure because it was grounded in established law," the lawyer says. "The federal government was fully involved in approving this transaction, which couldn't have been more public."

Still, the New York Daily News has obtained e-mails between Levine and Seth Pinsky, president of the NYCEDC, demonstrating a cozy relationship between the two.

"The policy question is whether Congress thinks that a facility like a sports stadium--which is to be used primarily by a private, for-profit, professional athletic team--ought to be financed with tax-exempt bonds," the public finance lawyer says. "If they say 'no' and want to write that into law, fine, but I don't think it's the time to be discouraging economic development."

Kucinich will soon have the opportunity to hear that point of view in person: The next scheduled hearing is set for October 7, in which Yankee officials are expected to testify.

Download opening statement of Dennis Kucinich.

Download testimony of Assemblyman Richard Brodsky.

Download testimony of IRS associate chief counsel Stephen Larson.

Make a comment


"Infrastructure assets in most parts of the world are financed on a public-private-partnership basis where the line between what's public and private is not a black-and-white thing" Not sure why your source needed to go off record to peddle this line (says, ahem, this pseudonymous commenter). Infrastructure a sports arena ain't. There are some arguable benefits to having a private party build and operate some infrastructure, especially if the public sector feels it lacks the expertise to do so, in which case, tax-exempt financing might be acceptable. A sports facility simply isn't, unless the public sector gets a MUCH more extensive amount of use from the facility, as it often does in Europe. Your source, who I suspect is at Nixon Peabody, should also be suspect for using the cover of anonymity to pursue the highly dubious argument that a tax-exempt financing was central to the Yankees staying in NY (Stenbrenner going to move them to Tampa?). The Jets/Giants were able to build a decent new stadium without a tax exemption.
Comment By Gari N. Corp - September 21, 2008 at 9:19 PM

Sunday, September 21, 2008

"Moguls Steal Home While Companies Strike Out" Truthout 9/19/8

Moguls Steal Home While Companies Strike Out
Friday 19 September 2008
by: Bill Moyers and Michael Winship, t r u t h o u t | Perspective

Here's an excerpt. Click the title above to read the whole article.

"On Opening Day in 1923, New York Governor Al Smith threw out the first ball and John Philip Sousa led a big brass band playing his famous marches. It was the Roaring Twenties, when the money flowed like bootleg whiskey, the pride before the fall. In 1930, the year after the market crashed, as the Great Depression began, Babe Ruth was taking home $80,000 a year, more than the president of the United States, Herbert Hoover. "Why not?" Ruth asked. "I had a better year than he did."

Yankee star Alex Rodriguez had a better year than both of them. This season, A-Rod is making $28 million, just part of an annual Yankee payroll of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country's richest tycoons.

But when it came to paying for the new, $1.3 billion pleasure dome, the millionaires on the field and King Midas in his skybox came up with some razzle-dazzle plays to finance their new wealth machine - tax-free bonds, requiring ordinary citizens to subsidize the construction, and hundreds of millions more for new parking garages, a train station and parks that supposedly will replace the ones seized by the city to make room for the new stadium. The Little League games that used to flourish on sandlots just outside the old ballpark have been moved miles away, sent down to the minors on a long road trip.

That's O.K., you may think; there will be plenty of room in the new stadium for the tax-paying public to come root, root, root for the home team - even the Coliseum in ancient Rome had bleachers for the commoners. But, in fact, there will be 5,000 fewer seats in the stands. And while the Yankees reportedly promise that half of what's left will cost $45 or less, those seats that used to cost $250, right behind the dugout, will now cost you $850. And if you want to be near home plate, you'll have to cough up $2,500 - per game.

Meanwhile, there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year - tax deductible - assuming they haven't filed for bankruptcy this week.

Why aren't the fans and taxpayers giving the Yankees a Bronx cheer? They did, but city officials rolled over them while making sure local politicians stayed in the lineup. The politicians are getting their own luxury suite at the new stadium for free - and first shot at buying the best available seats.

The new colossus will cast its majestic shadow across the South Bronx, one of the nation's poorest neighborhoods. The residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of New York City respiratory disease is already so high they call it "Asthma Alley."

Not that the well-to-do in the infield seats will have to hear the wheezing. They'll have exclusive access to a private club, a private entrance and a private elevator, totems of this gilded age. Let the games begin."

Friday, September 19, 2008

"South Bronx neighborhood taking hit from new stadium" ESPN Magazine 9/19/8

South Bronx neighborhood taking hit from new stadium

By Tom Farrey
ESPN The Magazine

Yankee Stadium, with the largest capacity in baseball, a venue too grand to call a ballpark, needed fans to fill all those seats. And in the era of borough-based teams, the Yankees found many customers in the South Bronx neighborhoods surrounding the stadium that was built in 1923. These were the first and second generations of New Yorkers to have fallen in love with the game on city playgrounds, most of which didn't exist until the turn of the 20th century. They grew into eager teens and hardened adults who could appreciate and marvel at the moon shots of Babe Ruth because they, too, had put stick on ball and dreamed of such ridiculous outcomes.

Professional sports in the United States is by no small measure built on the foundation of the playground movement, a national effort by social reformers to give children places to play in large cities made dense by the Second Industrial Revolution with population, pollution and juvenile crime. By 1917, there were 4,000 such parks around the country, up from just a few dozen a couple of decades earlier. These urban oases were so popular that often several games would be held on a patch of carved-out dirt, with home plates at different corners and line drives rolling balls into the playing area of an adjacent contest.

Construction of the new stadium has severely impacted Macombs Dam Park and its surrounding neighborhood.
Macombs Dam Park, located in the shadow of Yankee Stadium, was one of the forerunners. It opened in 1899 and immediately pulled neighborhood children off the streets and into sports such as baseball, basketball and tennis. In the ensuing decades, hundreds of thousands of kids used its extensive recreational facilities. The nation's first interracial track team trained there. Hall of Famer Rod Carew played on its fields, as did former All-Star Ken Singleton and current Pittsburgh Steelers lineman Willie Colon. The Yankees even used to hold tryouts there, signing city prospects such as Joe Pepitone.
Now, that green space is gone, a casualty of the new $1.3 billion Yankee Stadium.

"Memories, only pictures, now long gone," says Sean Sullivan, principal at nearby All Hallows High School, whose athletic program relied heavily on the park.

At his office desk a couple of blocks from where the costliest stadium in baseball history rises, Sullivan thumbs through decades of photos. The images highlight the importance Macombs Dam Park held for the community his Catholic school serves. The South Bronx is the poorest congressional district in the U.S., with high rates of obesity and asthma to boot. People here needed that well-worn park. For exercise. For escape. For the fresh air provided by hundreds of mature trees that would be cut down.

Their absence begs the question: While America says goodbye to the old Yankee Stadium this weekend, could it be that something else just as significant has been lost? Members of the neighborhood ask as much, while the club prepares to move into its new home in the spring.

"If I had a chance to sit down with the hierarchy of the Yankees, I would tell them, 'Why did you take away the park and hurt my kids?'" Sullivan says. "You're going to build a stadium and move it 1,000 feet to the other side of 161st Street, to charge the price of tickets that my kids and the people of this community won't have a hope of paying for. Shame on you."

But the fact is, the club hardly needs the neighborhood anymore. The Yankees are a worldwide brand now, pulling revenue and talent from many points on the globe. They draw ticket buyers from places well beyond the Bronx, with the wealthiest driving in from Manhattan or the northern suburbs -- they're the customers most responsible for subsidizing the salaries of A-Rod and Derek Jeter. The new stadium is tailored for them, with its martini bar and abundance of luxury boxes. There actually are fewer seats in the new Yankee Stadium than in the old one.

The clout of the rich and powerful was on full display in June 2005 when Michael Bloomberg, New York City mayor, announced that an agreement had been reached with the club to build the stadium on what was protected park land. The community had little time to organize a protest, and eight days later, a bill sailed through the state legislature alienating 22 acres of Macombs Dam Park and part of adjacent John Mullaly Park (named after the founder of the Bronx parks system). The bill was submitted in the final days of a busy session, after years of intense lobbying by the Yankees of key politicians and officials.

With a pricetag of around $1.9 billion, the new Yankee Stadium, set to open in April 2009, is the most expensive stadium ever built.

"I did not see that bill or read that bill before it came up for a vote that day," says Sen. Liz Krueger, a Democrat representing Manhattan. "Most of my colleagues did not really understand what they were voting for or against when that bill came up for a vote."

It was a vote, unanimous in the Senate, that Krueger came to regret.

But at first blush, the project looked so promising. At the news conference, Bloomberg enthused that the Yankees were going to pick up the entire cost of construction for the new stadium. That up to 1,000 new, permanent jobs would be created. And that the neighborhood would get recreational facilities that would be a "dramatic improvement" over the existing facilities, in exchange for giving up the land.

The city's plan then, as now, called for the creation of new play spaces on smaller parcels elsewhere in the borough. An artificial turf football and soccer field on top of a 1,600-car garage built for the stadium. Baseball fields where the current Yankee Stadium sits, after it's demolished. A tennis facility in what is now an industrial area along the Harlem River.

"This neighborhood, when it's done, will have a state-of-the-art sports and recreation complex," says Adrian Benepe, the city's commissioner of parks and recreation.

But some of those replacement parks won't be finished until 2011, due to delays. And members of the neighborhood say some of these spaces are too far away, particularly for children. The tennis courts, once right across the street from a row of apartment buildings, now will be a 20-minute walk away, through busy streets and an overpass that spans the Major Deegan Expressway.

Bloomberg says such obstacles are worth the trouble -- while conceding that the taking of land never would have happened to a place like Manhattan's Central Park.

"You don't have progress unless you inconvenience a few people," he says. "It isn't that you care less about them. If we stopped and said that if we can't inconvenience anybody, we wouldn't have anything."

The city certainly has spent money to meet its legal obligation to replace the seized land. At the ground breaking, the city announced it would drop $160 million on the stadium project, mostly on replacement parks. Now, that figure has risen to $217 million, according to New York City's Independent Budget Office, a publicly funded watchdog agency. IBO director George Sweeting told "E:60" that with the state chipping in for garages and the federal government allowing the aggressive use of tax-free construction bonds, the total public subsidy has grown to $656 million. Few, if any, stadiums in U.S. history have received more help from taxpayers.

It's really all about the Yankees' bottom line at the expense of New Yorkers and Bronx residents.
--Bettina Damiani, Good Jobs New York

The flip side is that all that investment is unlikely to generate much new employment, says Neil DeMause, a New York-based sports economist who tracks stadium projects. "It's not like they're bringing a new stadium here or a new team," he says. "They're moving across the street."

Bettina Damiani of Good Jobs New York, a non-profit organization that monitors public subsidies to corporations, says that more than anything, jobs that once existed outside the stadium will move inside the facility, as the Yankees attempt to capture as much of fans' game-day expenditures as possible.

You gotta start getting a life and looking at what's great for this city.
--NYC Mayor Michael Bloomberg

"It's really all about the Yankees' bottom line at the expense of New Yorkers and Bronx residents," she says.
Still, Bloomberg stands firmly by the project, with its total costs escalating to about $1.9 billion. The Yankees are covering most of that record outlay by agreeing to pay off construction bonds on the stadium. Indeed, Bloomberg suggests that neighborhood should thank the Yankees for what he considers their investment in the South Bronx. The team also has agreed to donate $800,000 a year to Bronx charities (although critics say that so far, the dispersion of funds has been slow) and provide some free tickets and merchandise to local kids.

"You gotta start getting a life and looking at what's great for this city," Bloomberg says.

But that's a hard one to reconcile for people in the neighborhood who are struggling to carve out any quality of life. One of them is Doreen James, who takes care of mentally ill patients for low wages while raising three children in a rental building across from what was Macombs Dam Park. For two years now, she's listened to noise from construction and breathed dust that billows into her apartment. Her 15-year-old son, Timothy, has put on weight sitting around the apartment, as his youth football team has struggled to field a team since losing its field. Forced to play at an interim patch of artificial turf too short to hold games, few players have been coming out to practice.

Soon, she'll be moving her family to Brooklyn. She is fed up and doesn't feel she can wait any longer for public officials to deliver on the promise of a better neighborhood.

"Tell them to call me when that happens," she says, packing books into a box.She's out of here, like one of Ruth's dingers.

Tom Farrey is an "E:60" correspondent and the author of the new ESPN book, "Game On: The All-American Race to Make Champions of Our Children," which includes a history of the relationship between youth and professional sports. He can be reached at Bert Rudman, chief investigative producer for E:60, contributed to this report.

"Dennis Kucinich says Yankee Stadium tax deals smell bad" Daily News 9/18/8

Dennis Kucinich says Yankee Stadium tax deals smell bad

Thursday, September 18th 2008, 8:08 PM
Taxpayer handouts for the new Yankee Stadium should stop until questions are answered about "improprieties and possible fraud" regarding $942 million in tax-exempt bonds already approved, a congressman said Thursday.

In a hearing on Capitol Hill, Rep. Dennis Kucinich (D-Ohio) claimed his ongoing probe of the deal has uncovered "substantial evidence of improprieties and possible fraud by the financial architects of the new Yankees Stadium."

Neither the Yankees nor city officials showed, though both were invited.

Kucinich zeroed in on disparities in the appraisal of land under the stadium raised last week by the Daily News' Juan Gonzalez.

A city-hired appraiser valued the land at $40 million, while a city agency put the figure at $204 million, documents show.
The $204 million appraisal was used last year to get the Internal Revenue Service to sign off on $924 million in tax-exempt bonds.

Kucinich raised the possibility that the approval could be rescinded if the appraisal was discovered to be a lie.

He said his investigation had raised "serious questions about the accuracy" of unnamed city officials' statements to the IRS in winning approval for the original funds.

An IRS official, Stephen Larson, implied the tax agency would likely look at The News' articles on the appraisal disparities, stating, "Given what's in the papers recently, we have a fact pattern that's getting awfully close."

Thursday Alice McGillion, a spokeswoman for the Yankees, declined to comment on the subjects raised at the Kucinich hearing.

Thursday, September 18, 2008

"Yankee Stadium deal criticized by lawmakers" Associated Press 9/18/8

Yankee Stadium deal criticized by lawmakers

WASHINGTON (AP) — A congressional panel has taken tough swings at the New York Yankees and New York City government over a new stadium for the Yankees. But neither the team nor the city budged from their positions on the $1.3 billion structure.

Rep. Dennis Kucinich said Thursday he found "waste and abuse of public dollars" in the financing of the new stadium under construction in the South Bronx.

Kucinich is an Ohio Democrat who heads the House Oversight and Government Reform Committee. He charged that city officials misrepresented to the IRS the value of the property, helping them to get special tax deals from the federal government and in effect dumping the cost of construction onto taxpayers. No one from the either the city or the Yankees spoke at the hearing.

As Kucinich spoke, New York's mayor, Michael Bloomberg, was in a nearby building testifying before a different House committee on global warming.

Earlier this week, Bloomberg defended the deal, calling it "a great project."

"We want these kinds of facilities here. Having new stadiums is as important as other things in terms of, not just the spirit for the people who live here, but our economy," Bloomberg said.

That's not how several Democrats on the panel saw it.

"In the case of the new Yankee Stadium, not only have we found waste and abuse of public dollars subsidizing a project that is for the exclusive benefit of a private entity, the Yankees, but also we have discovered serious questions about the accuracy of certain representations made by the City of New York to the federal government," Kucinich said.

The panel's investigation found "substantial evidence of improprieties and possible fraud by the financial architects of the new Yankee Stadium," he added.

The criticism highlights tensions felt nationwide as governments increasingly support stadiums for profitable pro sports teams with multimillion dollar payrolls.

Rep. Diane Watson, D-Calif., said her hometown of Los Angeles has gone without a professional football team for decades because city officials are unwilling to pay for a new stadium.

Given the current financial crisis gripping the U.S. economy, she said it made no sense for taxpayers to pay for construction of buildings for the benefit of sports owner tycoons.

"In this country we have allowed the upper class to destroy the middle class," Watson charged.

The lawmakers also complained that city and team officials had not provided information they have sought about the financing of Yankee Stadium.

The panel did hear from New York State Assemblyman Richard Brodsky, an outspoken critic of the deal, who charges that between $550 million to $850 million in taxpayer money has been committed to the project.

Brodksy's charges, based on city, IRS, and Yankee documents, include:

_The city manipulated the assessed value of the stadium to meet requirements for an IRS tax exemption. That included using comparable land values in Manhattan rather than the Bronx to come up with the value for the new property.

_City officials didn't disclose their purchase of a luxury box and extra game tickets and apparently there is no city policy on their use.

_The $366 million in additional funding sought by the Yankees to complete the stadium would be for a large video screen, not structural costs.

Previously, Yankee officials have accused Brodsky of factually inaccurate grandstanding after he voted twice in favor of the deal in the state legislature.

"The project has been one of the most transparent transactions undertaken in the city of New York and details have been recorded in voluminous, publicly available documents," Yankees spokeswoman Alice McGillion said earlier this week.

(This version CORRECTS first name of Calif. lawmaker, Diane, instead of Laura Watson. ) )

Wednesday, September 17, 2008

"Yankees’ Deal May Have Violated Law, Report Says" NY TImes 9/16/8

Yankees’ Deal May Have Violated Law, Report Says

Published: September 16, 2008

New York City and the Yankees may have violated federal tax regulations and state laws in using $943 million in tax-exempt bonds to build the baseball team’s new stadium, according to a report issued on Tuesday by Assemblyman Richard L. Brodsky.

Saying the taxpayers are footing the bill for the $1.3 billion Yankee Stadium in the Bronx and are getting little in return other than higher ticket prices and the loss of parkland, Mr. Brodsky, a frequent critic of the deal, said that the report stems from a review of thousands of pages of previously unreleased documents.

Although city officials and the Yankees hotly disputed many of the findings, the report concluded that the city and the state invested as much as $850 million in cash and tax breaks in the new stadium, which sits across 161st Street from the team’s historic home in the South Bronx.

“This stadium is being built by the people of the city and the state of New York,” Mr. Brodsky said during a press conference at the north end of the new stadium, at 164th Street and Jerome Avenue. “In return, they’re getting almost nothing. This deal does not serve the public’s interest. It serves the Yankees’ interest.”

Mr. Brodsky and other critics have argued that the city violated federal tax regulations by manipulating the assessed value of the land beneath the stadium so that the team’s annual payment in lieu of taxes would effectively equal the annual payments to bondholders, or debt service, of $56.7 million beginning in 2010.

Mr. Brodsky’s 34-page report previews testimony he plans to give on Thursday at a Congressional subcommittee hearing sponsored by Representative Dennis J. Kucinich of Ohio that is looking into public financing for sports complexes. The Yankees plan to testify next month, while the Bloomberg administration is negotiating a date.

The release of the report ignited a rancorous exchange with the city and the team. In a spirited defense of the city’s position, Seth W. Pinsky, president of the Economic Development Corporation, suggested that at this point Mr. Brodsky may be “willfully choosing to ignore” the documents and information the city provided during the last year.

“This is a project that is in fact privately financed,” Mr. Pinsky said. “It’s creating thousands of union jobs, spurring city and state investments in the area and relieving the city of the ongoing cost of maintaining an aging stadium. It’s a project that went through numerous hearings, almost 20 public hearings, and was approved at every level, including by the assemblyman himself.”

Despite the report’s heavy use of footnotes referring to project documents, the Yankees also took Mr. Brodsky to task for using “inaccurate facts” for personal aggrandizement. Alice McGillion, a spokeswoman for the Yankees, said in a statement released on Tuesday that stadium construction had had an enormous impact on the Bronx, both in terms of hiring construction workers who live in the Bronx and by providing 30,000 tickets a year to neighborhood organizations.

Although stadiums generally have mostly low wage, seasonal jobs, Yankees executives said that they will employ an additional 1,000 people, not the 15 listed in project documents. A large Yankees team store and restaurants like the Hard Rock Cafe will be open year round, they said.

The Yankees are aiming to complete the stadium by February 2009, in time for the new season. Next month, workers will lay down sod on the infield and the outfield, which has been designed using the same dimensions as the current stadium.

The Yankees and the Bloomberg administration have always insisted that the team is paying for the new stadium, unlike almost every other professional sports team. The use, however, of tax-exempt bonds, will provide the team with savings of about $181 million over the life of the bonds, according to the Independent Budget Office.

Mr. Brodsky contends that because the Yankees will pay the city an annual sum in lieu of taxes, that money, in turn, is being diverted from city coffers to pay the debt service on the bonds.

There is no question that taxpayers are making a sizable investment in the new Yankee Stadium, as well as a new stadium for the Mets in Queens. The city and the state agreed to provide the Yankees with more than $300 million in cash subsidies for garages, a Metro-North train station, replacement parks and road work. But the teams do not pay rent for playing on city land, nor do they pay property taxes.

The Bloomberg administration successfully lobbied the Internal Revenue Service to approve the use of the tax-exempt bonds for the stadium, which did not initially qualify. But the I.R.S. later issued a proposal that would tighten the rules governing such bonds so it would be nearly impossible for this kind of financing to be used again by a profitable sports franchise.

The Yankees are awaiting a ruling on whether they can issue a second bond offering of about $250 million.

“We do things for professional sports we wouldn’t do for any other business,” Mr. Brodsky said. “When it comes to professional sports, we become socialists; for everyone else, we’re capitalists.”

"Brodsky Slides in Front of City's Stadium Plans" The Observer 9/16/8

Brodsky Slides in Front of City's Stadium Plans
Westchester assemblyman has Dennis Kucinich on his side—but why all the fuss?

On Thursday, inside the Rayburn House Office Building in Washington, D.C., two legislators will convene a hearing on the financing of New York sports stadiums. Neither are from New York City, but the duo, Assemblyman Richard Brodsky of Westchester and U.S. Representative Dennis Kucinich of Cleveland, have begun a crusade against a complex city-crafted plan to finance new stadiums and arenas for the Yankees, Mets and Nets.

At the least, the two stand to be a biting irritant to city officials and sports executives, as City Hall seeks to fight back on one news-making charge after another. But more than an annoyance, the two bring publicity, scrutiny and attention to the issue that could conceivably influence an impending ruling at the Internal Revenue Service on the matter, threatening the development of the planned $950 million Nets basketball arena in Brooklyn and additional loans for the Yankees and the Mets.

The chairman of the Domestic Policy Subcommittee, Mr. Kucinich is holding the hearing as part of his larger focus on subsidized sports arenas and a Congressional probe on the Yankee Stadium deal. At the hearing, Mr. Brodsky expects to present a report he released Tuesday that’s highly critical of multiple aspects of the city’s financing deal for the new Yankee Stadium.

The focus of the two men—one a loud and often relentless critic of many Bloomberg administration policies; the other a mousy, twice-failed far-left presidential candidate—is on a complicated mechanism the city used to win tax-free financing for the new Mets and Yankees stadiums (and plans to use to finance the new Nets arena). The Mets and Yankees already have obtained their financing, but both teams want more to cover additional costs. The Nets have yet to gain approval for the financing, with plans to break ground on a new arena before the end of the year. The I.R.S. has criticized the mechanism as a loophole and has yet to rule on whether the teams can get any additional financing through the city’s structure.

Without the mechanism, for which the teams give fixed payments in lieu of taxes that pay off hundreds of millions of dollars in bonds, costs would rise substantially for each of the three teams, and in the case of the Nets, perhaps further upset an already troubled project.

At issue is the tax-exempt aspect of the financing. Under the Bloomberg administration’s arrangement, once the city-controlled Industrial Development Authority approves the financing plan, the teams are eligible to issue hundreds of millions in bonds that are free from city, state and federal taxes. Such savings can lower the cost to the teams by perhaps 15 or 20 percent.

But now, two and a half years after the IDA first approved the Yankees for the financing, the two lawmakers are crying foul in a loud, public way, questioning both the premise that the stadium deals are indeed a public good and the legality of the details in the financing mechanism.

For their part, Bloomberg administration officials are proud of their work and say they have nothing to hide in the deal, which uses a tax-free structure with a relatively minor amount of city and state investment to leverage a major federal subsidy for city projects. The financing allowed for billions in private investment, officials contend, making Mr. Brodsky’s crusade a frustrating one, especially as the financing mechanism for the Nets is up in the air.

“Why is he trying to create additional challenges for economic development beyond the challenges that the larger economy is already creating?” said Seth Pinsky, president of the city’s Economic Development Corporation and an architect of the financing agreement. “It’s unclear to me what Richard Brodsky’s endgame is.”

Mr. Brodsky, who was the leading state legislative voice against the mayor’s failed congestion pricing proposal, holds that the issue is no different from any of those on which he focuses, and highlights a need for reform of the state’s public authorities, his pet cause.

“The state IDA law, in my opinion, was at best manipulated,” he said. The investigation is “consistent with the abuse of the state authority structure. … These are run as Soviet-style bureaucracies with no transparency and no accountability.”

Looking at the deal—a Yankees request for an additional $350 million in tax-free financing, for instance, would have meant $3.6 million and $6.7 million in estimated subsidy from the city and state, respectively, compared with $72.6 million from the federal government—the city and state appear to come off fairly well. But Mr. Brodsky points to broader questions of legality with the deal in its entirety. In his report on the issue, he alleged that property assessments were artificially boosted to meet the financial arrangement, and that there are legal questions as to whether the city had the right to take on new public debt without other approvals, among other issues. (The city has denied any wrongdoing on assessments or other questions of legality.)

The attention of Mr. Kucinich, who declined to comment in advance of the hearing, comes as the I.R.S. in a waning Bush administration weighs the request by the city and state to allow the use of their financing structure for the Nets arena. The city and state want the agency to allow the use of the structure for projects that were already in the pipeline, and the I.R.S. is expected to issue its ruling shortly.

"City Declines To Participate In Hearing on Stadium Financing" the Sun 9/17/8

City Declines To Participate In Hearing on Stadium Financing
By PETER KIEFER, Staff Reporter of the Sun | September 17, 2008

The Bloomberg administration is scrapping plans to send one of its top economic officials to testify before a congressional panel that is investigating how sports stadiums and arenas receive public financing.

The president of the Economic Development Corp., Seth Pinsky, confirmed yesterday that he would not be testifying at a congressional hearing in Washington tomorrow called by Rep. Dennis Kucinich of Ohio.

Mr. Pinsky said no other representative from the city will be attending in his place.

"We have informed the congressman that it will not work for us," Mr. Pinsky said. "But we remain happy to speak to him about this subject."

Tomorrow's hearing comes on the heels of a report that was critical of the city's role in helping finance the new Yankee Stadium. The report, issued by Assemblyman Richard Brodsky, chairman of the Committee on Corporations, Commissions and Authorities, found that while the public contributed between $550 million and $850 million to Yankee Stadium, the development project will create just 15 new jobs.

The report also accused city officials of assessing the land under the new Yankee Stadium at 10 times the market value of virtually all other land in the South Bronx neighborhood.

At a press conference yesterday, Mayor Bloomberg defended the stadium plan and questioned some of the statistics provided in Mr. Brodsky's report.

"You have a right to your own ideas but not to your own facts," Mr. Bloomberg said. "It creates an enormous number of jobs. I don't know what his problem is."

Mr. Pinsky said the plan will create hundreds of jobs and provide hundreds of millions of dollars in investment in the Bronx, an area that he says is in need of investment.

"The good news is that Assemblyman Brodsky decided to get in his car and come down from Westchester to see a successful development project. The bad is that he issued a report that is willfully misinformed," Mr. Pinsky said.

Tuesday, September 16, 2008

"New York Taxpayers Got Little for Yankees Subsides" Bloomberg 9/16/8

New York Taxpayers Got Little for Yankees Subsides (Update1)
By Aaron Kuriloff

Sept. 16 (Bloomberg) -- New York taxpayers spent hundreds of millions of dollars subsidizing the Yankees' new stadium and received little in return, according to a report by state Assemblyman Richard Brodsky.

Brodsky, a Westchester Democrat who is chairman of the Assembly Committee on Corporations, Commissions and Authorities, said the public contributed between $550 million and $850 million to a stadium many can't afford to visit and one that that will create just 15 new jobs.

The Yankees have said they are paying for the $1.3 billion stadium, being built across the street from the current venue.

"This stadium is being built by the people of the city and state of New York,'' Brodsky said in a news conference outside the new stadium's construction site. "In return, they're getting almost nothing.''

Seth Pinsky, president of the city's Economic Development Council, said in a telephone interview that the new stadium represents more than $1 billion in private economic development in the Bronx. A cost-benefit analysis showed a net gain for the city of about $40 million, and residents were receiving other benefits such as a new rail station and new parks, he said.

"It's a big net positive for the city,'' he said.

Yankees spokeswoman Alice McGillion also disputed the report in an e-mailed statement. She said Brodsky ignored evidence that the stadium had spawned economic development in the neighborhood and created 1,000 new jobs, while awarding hundreds of millions of dollars to contractors in the city and state.

About one-third of the tickets in the new stadium will cost $25 or less, with about 80 percent priced at $100 or less, McGillion said.

"It is disappointing that Assemblyman Brodsky, for personal aggrandizement, is attempting to insert himself into the final week at Yankee Stadium,'' she said.

Final Game

The Major League Baseball team is scheduled to play its final regular-season game in 85-year-old Yankee Stadium on Sept. 21. Tickets in the new stadium cost as much as $2,500 each, compared with a maximum of $1,000 this year.

Brodsky said documents he examined showed that the city sent the U.S. Internal Revenue service an assessment that valued the stadium land at more than $200 million, to meet federal requirements for issuing tax-exempt bonds. The assessment compared the land in the Bronx with parcels in Manhattan, the report said.

At the same time, the city sent the state and national park services an assessment showing the land valued 10 times lower, minimizing the cost of replacing parkland lost to construction, the report said.

"This deal does not serve the public interest,'' Brodsky said. "It serves the Yankees' interests.''

Public Debt

Brodsky's report also faults the city for creating hundreds of millions of dollars in public debt and failing to protect taxpayers from ticket-price increases in a stadium they helped build.

"The people who are paying for this building can't afford to go to games here,'' he said.

City officials also failed to disclose their purchase of a luxury box in the new stadium, Brodsky said, an acquisition that he described as "at best, unwise.''

Brodsky called for an independent review of the public and private entities involved in the stadium project and said he would deliver the report to the U.S. Congress on Sept. 18.

"This is the house that we built, not that the Yankees built,'' he said.

To contact the reporter on this story: Aaron Kuriloff in New York at

Last Updated: September 16, 2008 19:51 EDT

"For Stadium Seating, City Officials Demand Luxe" NY Times 9/15/8

For Stadium Seating, City Officials Demand Luxe
Published: September 15, 2008

Rank has its privileges everywhere else — so why not here?

That was the thinking, to hear city officials tell it, that drove them to demand free luxury suites and first dibs on the best available seats at the stadiums being built for the Yankees and the Mets.

The perks, which were negotiated in 2006 but came to light only in July, have antagonized fans, who are being asked to swallow higher ticket prices in the new ballparks. And they have drawn fire in Albany and Washington.

“They’re subsidizing this gigantic increase in ticket prices, and they’re getting this luxury box for themselves? Gimme a break,” said Assemblyman Richard L. Brodsky, Democrat of Westchester, whose committee on public authorities is set to issue a report on Tuesday assailing the Yankees deal.

Mr. Brodsky said that the perks were negotiated in secret and that the city had yet to explain, despite repeated inquiries, why they were necessary and how they will be paid for.

The use of tax-exempt bonds to pay for the New York stadiums is being investigated separately by Mr. Brodsky and a Congressional subcommittee led by Representative Dennis J. Kucinich of Ohio, whose panel is also examining the perks obtained by the city and has scheduled a hearing for Thursday.

It is still unclear where the luxury suites will be located, how the perks will be distributed, and whether any public records will be kept of who uses them.

Besides the free suites, the city will be allowed to buy up to 145 tickets to every Mets home game and up to 180 to every Yankees home game. (For these, the city will pay face value but will be able to reserve its tickets at least a day before they go on sale to the public.)

The rates for suites at Citi Field, where the Mets will play, are $275,000 to $500,000 a year, and the Yankees are charging $600,000 to $850,000 at their new stadium, according to published reports.

The city’s economic development chief, Seth W. Pinsky, said he did not understand all the fuss over the deal.

“Why is that relevant?” he said.

Mr. Pinsky, president of the Economic Development Corporation, said suites for politicians were nothing new in New York or anywhere else. The city has one at Shea Stadium, as well as at the ballparks of the minor-league Brooklyn Cyclones and Staten Island Yankees.

But the city has never had a suite at Yankee Stadium. Yankees and Mets executives declined to comment for this article. One Yankees official, who insisted on anonymity to avoid repercussions, said the city got the new suite simply because “Dan Doctoroff demanded a suite, like every other city.” Mr. Doctoroff, who now runs Bloomberg L.P., did not respond to requests for an interview.

Mr. Pinsky, who reported to Mr. Doctoroff at the time, said Mr. Doctoroff did not say: “I want this because everyone else has this, whether or not it makes sense.’ I think what it was, was: It makes sense in these other places, it makes sense for us in the places where we have it, so why shouldn’t we also have it in these two stadiums?”

Mr. Pinsky also said that he and other negotiators “knew we were term-limited — recent events and speculation put to the side — so, at most, you’re talking about one year’s worth of personal benefit from this.” Mr. Pinsky is an appointee of Mayor Michael R. Bloomberg, whose term is set to end next December but who has publicly flirted with overturning the term limits law so he can stay on.

Mr. Pinsky said the perks were meant to be used to entertain visiting dignitaries and to reward city workers, but that it would be up to the mayor’s office to set up a policy for how to dole them out and ensure that it wasn’t abused.

Nearly every other local or state government entity that has financed a stadium or arena in recent years has held on to a suite or some other perk for its officials. New York City’s perks fall roughly in the middle of lavish and meager.

Perhaps the most extensive package was negotiated by the District of Columbia Sports and Entertainment Commission, the builder of the $611 million Nationals Park in Washington: two suites, 25 field-level tickets and free parking; use of the stadium on 18 nongame days; and, in a populist stroke, a promise to make 250,000 regular-season tickets available to fans at no more than 75 percent of full price.

Mr. Pinsky said the city could not rent out its suites or resell its tickets, so the perks could not be converted to currency that could be used on something more laudable, like money “to run public schools in the South Bronx.”

Elsewhere, officials typically justify luxury suites as a unique setting for romancing potential business partners. But it takes unusual restraint for politicians to keep from using the perk with their pals, some team executives said anonymously for fear of angering those politicians.

“The legitimate reason is supposed to be to use it to market the city,” said the president of a team that built a palatial building with public money and turned over a suite to the politicians responsible. “But are they capable of it?”

If government-owned suites are nothing new, neither is outrage over the idea of officials living large at taxpayer expense.

The mayor of Denver in 2001, Wellington E. Webb, quietly agreed to exchange the “Mile High Stadium” trademark to the Denver Broncos for a 20-year lease, worth $1.7 million, on a suite at Invesco Field. The deal was voided after critics assailed it as an end-run around ethics and contracting rules.

In Arlington, Tex., meanwhile, Mayor Robert Cluck said he had “nothing in writing” but expected that the Cowboys would give the city a suite in their new stadium, when it opens next year. “I don’t think we should have demanded one,” he said. “We’re building it for economic development reasons.” Then again, he said, he would be unabashed in using it.

“Everybody has the opportunity to run for City Council or mayor,” he said. “Maybe that’s just a perk of the job.”

"Yanks beaned taxpayers, stadium report says" Daily News 9/16/8

Yanks beaned taxpayers, stadium report says
Tuesday, September 16th 2008, 4:37 AM

ALBANY -The new Yankee stadium got up to $850 million in taxpayer investments but will create just 15 permanent jobs, a scathing new report charges.

Assemblyman Richard Brodsky (D-Westchester) will release the 30-page "House That You Built" report today; it comes as the team finishes its final home stand at its old historic ballpark.

The report says the Yanks got $336 million from the city and state and up to $500 million in interest savings on IRS-approved tax-exempt bonds.

It slams the city Industrial Development Agency, saying it "may have violated existing law in its creation of massive amounts of public debt and its failure to assure public benefits from the massive taxpayer investment."

The Daily News first reported many of the findings in the report, which charges:

- The city "manipulated" the assessed value of the stadium to meet the need for an IRS tax exemption. The city appraised the value of the new stadium land at $21 million, but told the IRS it was worth $204 million.

- "Sworn commitments" to the IRS and the National Park Service were not kept.

- The Industrial Development Agency and the mayor's office "secretly" acquired a luxury suite.

- The city failed to protect fans from "excessive ticket price increases."

Yankees spokeswoman Alice McGillion slammed Brodsky - who heads the Assembly's Corporations, Authorities and Commissions Committee - as a lying attention-grubber.

"Assemblyman Brodsky has never let an accurate fact stand in the way of his grandstanding in a press release or press conference," she said.

"The new stadium will create approximately 1,000 additional union jobs than exist in the present stadium, not the 15 he states," she said.

"This is in addition to the 5,000 union construction workers" working on the project, she said.

Andrew Brent, a mayoral spokesman, was also critical of Brodsky.

"One would think that, in these difficult economic times, the last thing [he] would want to do is trash billion-dollar private investments that he supported before opposing," Brent said.

McGillion noted that Brodsky voted for "cash bailouts" for the New York Racing Association and okayed tax incentives for Monticello Raceway.

"His hypocrisy is evident," she said.

"New York assemblyman heads to D.C. over stadium subsidy" New York Newsdays 9/15/8

New York assemblyman heads to D.C. over stadium subsidy
By VALERIE BAUMAN | Associated Press Writer

ALBANY, N.Y. — State Assemblyman Richard Brodsky said he will issue a report Tuesday finding that New York City manipulated the assessed value of the new Yankee Stadium to get an Internal Revenue Service tax exemption.

"We have done a fair, careful, thorough analysis and have uncovered some very disturbing things," Brodsky said.

Seth Pinsky, president of the New York City Industrial Development Agency, said he hasn't seen the report but rejects its claims. He said the new stadium will create 1,000 permanent jobs, add new infrastructure and transportation access to the Bronx and was already subject to nearly 20 public hearings.

"It appears the assemblyman is rehashing charges that he has made repeatedly and to which we have responded," Pinsky said.

Brodsky has questioned the Yankees' request to subsidize the stadium with US$336 million in public funds issued by the IDA.
He said the report indicates that tax payers - not the Yankees - are paying for the construction of the new stadium. The report indicates that tax payers have spent between $550 million and $850 million on the project to create only 15 new permanent jobs.

Brodsky is the chairman of the Assembly committee on corporations, commissions and authorities, which has jurisdiction to review proposals involving IDAs.

The Westchester Democrat said the IDA may have violated the law by creating massive amounts of public debt and by failing to assure public benefits from the taxpayer investment.

Brodsky also said the city didn't protect the public from excessive ticket prices by the Yankees.

Yankees spokeswoman Alice McGillion questioned the report's accuracy.

"Assemblyman Brodsky has never let an accurate fact stand in the way of his grandstanding in a press release or press conference," she said.

The report is based on a review of thousands of pages of documents and sworn testimony and meetings from city officials. Brodsky plans to present the report to Congress on Thursday.

Brodsky also said the IDA and Mayor Michael Bloomberg's office secretly acquired a luxury suite with proceeds from stadium bonds.

Bloomberg spokesman Andrew Brent said the project was examined thoroughly in numerous public meetings and hearings before being approved by the Assembly and Brodsky.

"Not only does the assemblyman have the facts wrong, but also his willingness to ignore basic information about the project suggests that getting the facts right may not be his chief concern," Brent said.

Monday, September 15, 2008

"Rep. Charles Rangel lobbied IRS for tax breaks on behalf of Yankees" Daily News 9/15/8

Rep. Charles Rangel lobbied IRS for tax breaks on behalf of Yankees
Monday, September 15th 2008, 3:32 AM

The city and the Yankees secretly crafted a letter Rep. Charles Rangel used to lobby the IRS for tax changes that would save the team $66 million, the Daily News has learned.

They did this at the same time Yankees owner George Steinbrenner and the team's law firm, Akin Gump Strauss Hauer & Feld, raised almost $25,000 for Rangel, records show.

The law firm's political action committee also donated an additional $30,000 to the Democratic Congressional Campaign Committee in this election cycle. Rangel is chairman of the DCCC's board of directors and a key fund-raiser for House Democrats. Yankees President Randy Levine is senior counsel at Akin Gump.

The Rangel letter was just one weapon in the Yankees' ongoing battle to get more tax-exempt financing for the new stadium rising in the Bronx. Last year, the team got $942 million in tax-free bonds through a city agency, but the team wants $350 million more.

If the new bonds go through, the Yankees would lower their borrowing costs by $66 million on top of the $181 million they're already set to save from the first round of tax-free bonds, the Independent Budget Office estimates.

Internal e-mails and correspondence obtained by The News under the Freedom of Information Act show how the Yankees and Mayor Bloomberg's top deputies have worked hand in hand to win special tax breaks for America's richest team.

In one letter, the Yankees invited city officials to a special behind-the-scenes MLB preview of the 2007 All-Star game in San Francisco. This year's All-Star game was held at Yankee Stadium. City officials could not say which officials went or how much the trip cost taxpayers.

A key obstacle for the Yankees' financing remains the Internal Revenue Service. That's where Rangel, chairman of the powerful tax-writing House Ways and Means Committee, came in.

$350M break for Bombers

IRS regulations adopted in the mid-1980s - at the request of the late New York Sen. Daniel Moynihan - restrict the use of tax-free financing for sports arenas.

In 2006, the city got the IRS to grant an exception that allowed the Yankees to obtain $942 million in tax-exempt bonds - but the cost of the stadium began to rise, and the exception expired.

Now the Yankees say they need $350 million more in tax-free bonds, so they're pressing the IRS for another exception.

On Jan. 4, Levine e-mailed an unsigned Rangel letter to then-Deputy Mayor Dan Doctoroff along with "talking points" explaining the need to change the IRS regulations.

"Dan," the e-mail begins, "Happy New Year. Per our discussion, attached is 1) a proposed letter from Congressman Rangel to the IRS and 2) talking points. If you have any questions, please call me. Thank you. Best, Randy."

Levine says the letter and accompanying "talking points" were written by the city but "reviewed" by Yankees in-house tax lawyers before being sent to Rangel.

"The January letter was prepared by the city," Levine said. "They sent it to us to review for facts and [to see] if we agreed, which we did. We sent it back to the city saying it's up to them, do whatever they want. We had no problem with it."

Levine said he had "no knowledge of whether any of our tax lawyers made some suggestions as to form, or corrected the original draft. As to me, I made no changes."

Rangel's spokesman Emile Milne said the letter to IRS Acting Commissioner Linda Stiff was sent. The agency acknowledged its receipt.

The mayor's office said outside counsel hired by the city wrote the letter, which was "revised by city and state counsel." The office declined comment on whether the Yankees or anyone else reviewed the Rangel letter.

Ultimately, the IRS rejected the Rangel letter and requested a letter directly from the city in May, the mayor's office said.

Campaign donations spike

Rangel has received campaign contributions from the Yankees and Akin Gump for years, but in this election cycle - after he became chairman of the House Ways and Means Committee - the contributions spiked to $24,950.

Some of the donations appear to be choreographed to get around the $4,600 limit on how much an individual can give a congressional candidate. Last summer, 14 Akin Gump lawyers made $250 to $1,000 donations for a total of $12,850.

Yankees executives, Akin Gump lawyers and Akin Gump's political action committee have raised $45,000 for Rangel and his affiliated National Leadership PAC since 2000.

In 2006, Akin Gump - a bipartisan firm that for years has donated thousands to both Democrats and Republicans - reported that the Yankees hired the firm to lobby the U.S. Department of Interior for "federal approval required to complete stadium relocation."

That job ended Jan. 1, 2007. Levine said the Yankees hired the law firm again three months ago - this time to represent the team in a congressional probe on the use of public funds for sports arenas. Hearings are set for this week.

Levine said the firm had nothing to do with the Rangel letter and insisted the letter was meant to serve the interests of the Yankees and other projects, such as the Mets' new stadium and developer Bruce Ratner's proposed Nets' arena in Brooklyn.
Mets officials said they had nothing to do with the letter.

A spokesman for Ratner did not return calls.

Friday, September 12, 2008

"Yanks land deal ain't fair ball" Daily News 9/12/8

Yanks land deal ain't fair ball
Friday, September 12th 2008, 1:56 AM
Juan Gonzalez

In January 2007, the city assessed land under the new Yankee Stadium at 10 times the market value of virtually all other land in the South Bronx neighborhood.

The assessment - not including the new ballpark - worked out to a fair market value of $275 per square foot. But a Daily News analysis of city property records shows that city assessors said land on a dozen blocks around the site was worth an average of less than $25 a square foot.

Among the most astounding disparities:

- The site of a VIP parking garage that will be connected to the new stadium: $20 a square foot.

- Land under the old Yankee Stadium: $16 a square foot.

- Land under the giant Gateway Center mall, currently under construction a few blocks south of the stadium: $9 a square foot.

Lawmakers in Washington and Albany are investigating whether city officials inflated the new stadium's land value to make it possible for the Yankees to pay back nearly $1 billion in tax-free bonds for the project.

U.S. Rep. Dennis Kucinich (D-Ohio), head of a House subcommittee that oversees the IRS, will hold a hearing Thursday in Washington that is expected to focus on stadium finances.

Meanwhile, State Assemblyman Richard Brodsky (D-Westchester), who chairs the committee that oversees public authorities, will release an interim report next week on his Yankee probe.

Brodsky on Thursday called the city's assessment practices "inexplicable and disturbing," and vowed to "determine if the law and simple fairness were observed."

The investigations are coming to a head as the Bloomberg administration and the Yankees are fiercely lobbying the IRS for a waiver that would allow the team another $366 million in tax-free bonds to pay escalating costs of the new stadium.

The Yankees deal calls for the team to begin paying back its original bonds once the new stadium opens in April through the use of something called Payments in Lieu of Taxes. IRS rules say such payments can't be higher than the official tax on the property that is being financed.

In other words, the Yankees need the highest possible assessment to be able to make their huge debt payments.

This column reported on July 27 that a separate appraisal of the new stadium site done in 2006 - one the city commissioned and submitted to the National Park Service - claimed it was worth $46 a square foot.

"Our assessors jacked up the numbers and the justify the stadium bonds," a veteran Finance Department official said.

Assistant Finance Commissioner Sam Miller denied that allegation.

"Finance estimated the value of the new Yankee Stadium accurately and independently by using a standard cost approach for new construction, and by comparing the costs to other new stadia around the country," Miller said.

The Yankees declined to comment.