Saturday, April 04, 2009

"Breaking With History in the Bronx" NY Times 4/3/9

Breaking With History in the Bronx

Published: April 3, 2009

The pharaohs would be at home in the new Yankee Stadium, if they could peel enough gold leaf off their sarcophagi to cover the costs of tickets. The monumentality of the place goes on display this weekend for the first games.

In dimensions and decor, the new stadium, handsome and comfortable, is meant to evoke the old one. But the resemblance is only concrete deep. This is not history, but a costume party, a rigging of familiar geometry. It disguises a radical departure from New York’s baseball history: the embrace of public subsidy — around a billion dollars when all the costs are added — for private wealth.

The first incarnation of Yankee Stadium opened in 1923. The owner, Jacob Rupert, bought private land, raised private funds for the construction, and maintained the place with money he made in ticket sales. Rupert and his successors paid taxes on the property: the land alone was assessed at $1.75 million in 1923. By 1970, the stadium and land were valued at $5 million.

If you were to page through the annual city tax rolls, you would find the valuation of Yankee Stadium — as well as the Polo Grounds in Manhattan and Ebbets Field in Brooklyn, the homes of the Giants and Dodgers — listed right alongside the other big properties in the city, like Rockefeller Center, the Metropolitan Life building and Loews Paradise theater.

What do those old tax rolls tell us?

They say that for much of the 20th century, baseball in New York was recognized by the government as another commercial venture, with all the opportunities and responsibilities of owning property.

Not at the new “cathedral of baseball.” In fact, the stadium is being treated by the government as if it were a house of worship, not a place to sell $10 cups of beer. The partnership that owns the team has a 40-year lease on what had been city parkland. The partners will pay neither property tax nor the “payments in lieu of taxes” that are made when a private business venture occupies public space.

Officials in the Bloomberg administration act as if the very notion that the team ought to pay property taxes is nuts.

Once upon a time, the city was warned about just these kinds of ventures — by none other than the chief spokesman for the Yankees, George M. Weiss, the general manager who ran the team at the height of its success in the 1950s.

After the Dodgers left Ebbets and the Giants left the Polo Grounds in the late ’50s, the city began planning to build a ballpark in Flushing.

“Every municipal stadium in the country is a white elephant,” Weiss said in 1960. The new stadium would “create a deficit that is, I believe, unfair to the public that will have to foot the bill, and to the Yankees, who go on paying the city $200,000 a year in taxes.”

In December of that year, the mayor and City Council approved what became known as Shea Stadium, even though the rent the city collected would not cover the payments the city would be making on the construction bonds.

In trying to stop the deal, the council’s minority leader, Stanley M. Isaacs, a Republican-Liberal, made a prophetic argument.

“He predicted that the Yankees would seek tax exemption for the Yankee Stadium on a threat to pull out of New York,” The New York Times reported on Dec. 21, 1960.

Isaacs was right about that. By 1970, CBS owned the Yankees. The executive in charge, Michael Burke, publicly threatened to move the team to New Jersey. Mayor John V. Lindsay agreed to buy Yankee Stadium, overhaul it, and lease it back to the team at very favorable rents. Over the years, the city lost tens of millions of dollars on the lease.

Soon after the Yankees had gotten their (first) handout, the owners of Madison Square Garden stepped forward to howl about their property taxes. The Garden had opened in 1968, a triumph of private enterprise, the owners said. In 1981, the city, under Mayor Edward I. Koch, agreed not to collect taxes for 10 years. Or at least that was what Mayor Koch said he thought the city had done. But the city ended up waiving property taxes on the Garden as long as the Knicks and Rangers play there — a deal that has cost the city at least $250 million in tax revenue.

During the debates on Shea Stadium nearly 50 years ago, Stanley Isaacs made another declaration.

“When Rome fell, the people were placated by circuses,” he said. “Our present administration has modernized the approach, but the lesson is still plain.”



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