"Stadium appraisals under fire" Newsday 10/16/8

Stadium appraisals under fire
BY MICHAEL FRAZIER | michael.frazier@newsday.com

October 16, 2008
A congressional panel has scheduled a hearing in Washington next week to determine whether appraisals of the Bronx property on which the new Yankee Stadium is being built were manipulated by the city.

Critics claim New York City inflated the property's value more than six times its actual worth to secure Internal Revenue Service approval of the city's plan to allow the $1.3-billion stadium to be constructed with tax-exempt bonds.

The city has said the appraisals were done by two different agencies, on dates about a month apart, using different criteria.

The land appraisals will be reviewed during an Oct. 24 hearing of the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee. The subcommittee is chaired by Rep. Dennis Kucinich (D-Ohio).

The discrepancies between the appraisals are reflected in reports submitted to the IRS. One report listed the land as worth $275 per square foot, while the other had it at $45 per square foot.

The city Department of Finance made the higher appraisal in April 2006, using the supposition that the new stadium was complete. The finance department said the lower figure was estimated by the city's Parks Department in May 2006, appraising the land as if it were undeveloped.

It was unclear yesterday why the two appraisals were performed in that way.

Yankees officials originally were scheduled to testify before the subcommittee on Oct. 7, but the hearing was postponed.

Yankees president Randy Levine and Seth Pinsky, president of the city Economic Development Corp., are expected to testify. Assemb. Richard Brodsky (D-Westchester), a critic of the deal made by the city and the Yankees, also is expected to testify.

The debate over using public financing for private projects was revived after the Yankees requested an additional $336 million in tax-exempt bonds to help complete the stadium. The IRS is considering a regulation that would block the Yankees from receiving any more tax-exempt bonds.

The Yanks' crosstown rivals, the Mets, who also are building a new stadium, went the same financing route and are seeking $52 million more in tax-exempt bond financing.

The new Yankee Stadium initially was financed with about $942 million in tax-exempt bonds and $25 million in taxable bond financing. The Mets' new stadium already has been granted $528 million in tax-exempt bonds.