"Pols probing city on Yankee stadium aid" Daily News 10/16/8

Pols probing city on Yankee stadium aid
BY GREG B. SMITH AND JUAN GONZALEZ
DAILY NEWS STAFF WRITERS

Thursday, October 16th 2008, 1:49 AM
The city may have improperly inflated the value of the new Yankee stadium by hundreds of millions of dollars and lied about it to the IRS, investigators charged Wednesday.

Rep. Dennis Kucinich, head of a House subcommittee probing taxpayer funding of sports arenas, says the city provided a "possibly inaccurate tax assessment" to justify hundreds of millions of dollars in tax-exempt bonds.

The Ohio Democrat cited "serious questions" about city statements to the IRS. Because of those questions, Kucinich wrote, "The accuracy of the [city's] representations of the Yankee stadium project cannot be relied on."

Investigators said the city might have improperly included $500 million in construction costs in its assessment.

They also noted three different city-funded appraisals forecast the stadium's worth as anywhere between $21 million and $204 million - meaning it might have been overvalued by nearly $180 million. Only the highest appraisal was mentioned to the IRS.
Kucinich said if the city Department of Finance based its findings on inaccurate valuations of the stadium, "there would be a violation of New York State Law."

Finance spokesman Owen Stone said the stadium's assessment was accurate and that department officials "look forward to traveling to D.C. to explain to the committee how Finance values property."

Kucinich blasted city officials for refusing to hand over documents and e-mails that could show whether top city officials exerted improper influence on city assessors who determined the stadium's value.

Under the agreement with the city, the Yankees were able to obtain $942 million in tax-exempt bonds that will save them $181 million in lower borrowing costs over the next 30 years. The Yankees want $366 million more that will save another $66 million in borrowing costs.

In a letter sent to Mayor Bloomberg on Tuesday and released Wednesday, Kucinich said his investigation found the city may have lied to the IRS about the stadium's true value.

Under the deal, the city allowed the Yankees to make special payments instead of paying property taxes. Under IRS rules, those payments cannot exceed normal property taxes.

Kucinich said city officials could be guilty of perjury if an IRS audit finds the city's "sworn representations" were false. The committee will hold a hearing next Friday.

gsmith@nydailynews.com