"$2 Billion in Taxpayer Money to Yankees to Yield 22 New Permanent Jobs" Yonkers Tribune 1/8/9

$2 Billion in Taxpayer Money to Yankees to Yield 22 New Permanent Jobs

Brodsky_AssemblymanRichard92AD New York City Proposes to Give Yankees $430 Million For Television/Audio-Visual System, Concession, and Other Stadium Additions

Brodsky Committee Continues to Seek Data in Face of Stonewalling by NYCIDA and City

New York, NY -- After weeks of stonewalling, New York City released two of dozens of documents sought by the Assembly Committee on Corporations, Authorities, and Commissions that relate to the City’s attempt to give the Yankees an additional $430 million of taxpayer money for the construction of the new Yankee Stadium.[1] The Yankees have already received an excess of $1.5 billion of taxpayer money.

These two documents are the Yankees’ application to the NYCIDA, which the City and the NYCIDA have had since December 11, 2008,[2] and had previously refused to release, and a cost-benefit analysis which is part of the NYCIDA process. The documents reveal that the $2 billion in taxpayer subsidy will yield an total increase of full time employment at the new Stadium of only 22 jobs,[3] that the average wage of employment at this subsidized project is $34 million per year,[4] that the largest single uses of the new monies are for a large television and audio-visual system, concessions, Yankee’s administrative offices, and other accoutrements.[5]

The City is still stonewalling in its refusal to provide other documents related to its attempt to give new taxpayer money.

The approval process being used by the City at the NYCIDA is limited to a single public hearing now scheduled for January 15, and a final vote now scheduled for 9 a.m. the following morning. Documents and information needed to analyze and understand this proposal have been withheld from the public and the Committee. They City and the NYCIDA have apparently refused a request from Assemblyman Richard Brodsky to delay the vote.
<>The Committee will continue to seek and make public data that will explain the reasons for and uses of this additional $430 million in taxpayer money. A more detailed summary of the two documents released follows.

Summary of the Yankee IDA Application and Cost-Benefit Analysis

In 2006 the New York Yankees were given about $1.5 billion in taxpayer money for the building of a new Yankee Stadium. Over $500 million was direct cash and tax relief. The additional $950 million came in the form of low-interest bonds whose principal and interest were repaid with tax dollars, as the City freely admitted in sworn filings with the IRS: “The City has determined to use its property taxes (in this case PILOTs) to finance the construction and operation…of the Stadium.”

The Yankees are now seeking, with the support of the Bloomberg Administration, an additional $430.9 million. The largest single use of the money seems to be for a new television, video-audio system at the Stadium. Other notable uses include monies to replace concrete ramps with granite ones, to cover legal and financial fees, and to pay for a museum and conference center, Yankee administrative offices, concessions, and suite upgrades.

It should be noted that $123 million of the actual cash proceeds of the bonds will be paid directly to the Yankees as repayment for money they have already "advanced" to the project, apparently always anticipating the additional taxpayer monies would eventually be received.[6]

The City calculates a net economic benefit of $59.7 million.[7] They do this by ignoring the cost to taxpayers of repaying the bonds. If these costs were included as they properly should be, the actual economic cost to the City of these additional bonds alone, would be about a minus $500 million.

The process being used by the City is limited to a single public hearing now scheduled for January 15, and a final vote now scheduled for 9 a.m. the following morning. Documents and information needed to analyze and understand this proposal have been withheld from the public and the Committee.

Information newly released in the Yankees application for the additional public financing on the new jobs to be created as a result of the new Stadium are described below, as are the uses of the additional taxpayer money and subsequent legal issues that have arisen.

New Jobs Created As A Result Of The New, Taxpayer Financed Yankee Stadium

FULL TIME EMPLOYEES

The Yankees now assert that there will be a total of 22 new permanent full time jobs created as a result of the new Yankee Stadium project.[8] This is an increase of their original statement that 15 new permanent full time jobs would be created. The Yankees now assert that there will be no increase in non-permanent full time jobs.[9] These are the players, coaches and scouts. The total amount of full time jobs at the Stadium is now estimated to be 174.[10]

PART TIME EMPLOYEES

The Yankees estimate that 253 new non-permanent, part-time jobs will be created.[11] The largest single part of that increase in for sweepers, supplemental police, night watchmen, electrician and maintenance workers. This is a substantial decrease from their original statement. The Yankees calculate the reduction in total part time employment as follows: a reduction from 879 to 522 total part time employees in year one, and a reduction of total part-time employees from 950 to 775 in year two.[12] No yearly or hourly salary numbers are provided.

The Yankees additionally report that the number of part-time contract employees will increase by about 1,100 jobs, with the bulk of these in the area of concessions, food and beverage.[13] No yearly or hourly salary numbers are provided.

AVERAGE WAGE / SALARY RECEIVED BY EMPLOYEES

The Yankees assert that the average annual wage/salary received by employees is $34 million.[14] It is unclear if this is for permanent employees alone, or includes the part-time employees.

The Uses Of The New Taxpayer Money

The single largest use of the additional public financing appears to total about $57 million for a large screen television and audio-visual systems.[15]

Other big ticket items include $10.4 million for “suite upgrades,” including the addition of press suite lounges,[16] as well as $1.6 million to enclose the press suite.[17]

The new taxpayer money will also be covering $40 million in construction delays,[18] and $1.6 million to replace concrete ramps with granite ramps.[19]

The additional public financing will also provide $137.4 million for concessions,[20] $12.5 million for Yankees administrative offices,[21] $8.4 million for a museum and conference center,[22] $1.3 million for City inspections and permits,[23] and $384,000 in legal fees.[24]

The Yankees’ application for the new taxpayer money also notes that the Yankees will be subleasing 6,500 square feet in the new stadium to Hard Rock Café, and 6,500 square feet to the Yankees Steak LLC, a steakhouse.[25]

Legal Issues

The City's attempt to railroad this IDA grant has been marked by secrecy and a continuing refusal to make relevant documents public in advance of the vote now scheduled for 9 a.m. the morning following the sole public hearing or opportunity for public comment. A series of legal questions arise that are shrouded in mystery, again because of the refusal of IDA officials to respond to questions. These include: Does the IDA will again need a "Deviation Letter", as did the first round of taxpayer assistance, because the Yankee Project does not meet economic development standards? Can the IDA avoid all other approvals, such as ULURP, IRS, and tax assessment assurances by attempting to rely on the 2006 approvals?[26] How can the funding be justified, since the earlier financing was justified on the purported Yankee threat to leave the City, but the Yankees have since signed a Non-Relocation Agreement barring them from leaving. In other words, how can they rely on a threat to leave when there is now a Non-Relocation agreement in place?



[1]Core Application, “Additional Bonds (PILOT and Rental) Sources and Uses Table.

[2] The Core Application is signed and dated by Lonn Trost on December 11, 2008 in several places, including on the “Request, Certification, etc.”

[3] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[4] Core Application, Employment Questionnaire, page 7.

[5] Core Application, “Scope Modification, Funding Modifications, Trade Costs and Contingencies – Detail” table and “Total Project Net Sources and Uses Table.”

[6] Core Application, “Additional Bonds (PILOT and Rental) Sources and Uses Table,” footnote 1.

[7] NYCIDA Project Cost/Benefit Analysis, page 2.

[8] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[9] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[10] Core Application Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[11] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[12] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table, * number 1.

[13] Core Application, Annex 4-9 to Employment Questionnaire, “Comparative Employment Information” table.

[14] Core Application, Employment Questionnaire, page 7.

[15] Core Application, “Scope Modifications, Funding Modifications, Trade Costs and Contingencies – Detail” table and “Construction Estimated Cost to Complete” table.

[16] Core Application, “Scope Modifications, Funding Modifications, Trade Costs and Contingencies – Detail” table.

[17] Core Application, “Scope Modifications, Funding Modifications, Trade Costs and Contingencies – Detail” table.

[18] Core Application, “Additional Bonds (PILOT and Rental) Sources and Uses Table.”

[19] Core Application, “City/NYPD/FDNY and Other Governmental Expenses – Detail” table.

[20] Core Application, “Total Project Net Sources and Uses Table.”

[21] Core Application, “Total Project Net Sources and Uses Table.”

[22] Core Application, “Total Project Net Sources and Uses Table.”

[23] Core Application, “Soft Costs Estimated Cost to Complete” table.

[24] Core Application, “Scope Modifications, Funding Modifications, Trade Costs and Contingencies – Detail” table.

[25] Annex 3 to Core Application.

[26] Annex 1(g) to the Core Application states that the “ULURP approval for the Project was obtained in connection with the New York City Industrial Development Agency’s issuance of bonds in respect of the Project in August 2006.