New York Law Blog

A new report issued this week by New York State Assemblyman Richard L. Brodsky claims that the building of the new Yankee Stadium in the Bronx possibly violated not only federal tax regulations but state laws as well when it used $943 million in tax exempt bonds for the team’s new facility. According to Mr. Brodsky, the city as well as the state has invested roughly $850 million in cash and tax breaks to erect the new stadium, and believes the tax payers are footing the bill for the $1.3 billion new Yankee Stadium.

“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.

The city and state, of course, see it otherwise. They claim that Mr. Brodsky signed off on  the financing of the stadium as it went through 20 public hearings, and that he also used “inaccurate facts” in his report.

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.

“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.”

An interesting piece ran in the New York Times’ NY/Region section highlights a little known law regarding citizens who have previously been incarcerated and acquiring trade licenses once they are released. Marc La Cloche spent eleven years in New York prisons for robbery charges. While he was incarcerated, Mr. La Cloche studied barbering and when released applied for a license to do so with the state. When the state discovered he possessed a “criminal history”, he was declined the license. Mr. La Cloche fought the denial in the court system, but has since passed away. Since then, members of the New York state assembly have taken up the issue and are now working on bills to reverse the law.

With Mr. La Cloche in mind, they [State Senator Velmanette Montgomery and Assemblyman Michael Benjamin] introduced bills to forbid the state to deny a license to a would-be barber or cosmetologist just because of an applicant’s criminal record. Barbering and cosmetology were singled out because they are skills valued both in prison and in the neighborhoods to which many inmates return, once freed.

“You can’t transfer making highway signs and garbage bins to the community because there’s no industry out here for them,” Ms. Montgomery said. “But for cosmetology and barbering, there is. It’s also a skill that can be translated into a small-business opportunity.”

Some state officials didn’t like the bills. When they were passed by the Legislature last year, Gov. Eliot Spitzer vetoed them. One argument against them was that discrimination based solely on a criminal record is already forbidden by the state’s Correction Law.

But as we all know, and as the La Cloche case showed, what is law and what is reality do not always walk hand in hand. The Community Service Society, an antipoverty group, said during last year’s debate that it had detected a pattern of denying licenses to former inmates based on “spurious concerns over ‘character’ that can only be attributed to bias related to their criminal record.”

The bill to reverse the previous law was recently sent to Governor David Patterson which he signed.

Aimed at Giving New Yorkers Real Reform

A recent press release from the NY State Assembly provides information regarding the Comprehensive Energy Strategy which was announced by Assembly Speaker Sheldon Silver and Energy Committee Chairman Kevin Cahill.

The passage of a series of comprehensive, innovative initiatives aimed at implementing meaningful, long-term solutions to New York’s rising energy costs includes measures to:

• Recapture lost tax revenue currently withheld by big oil companies and redirect it toward the low-and-moderate-income Home Energy Assistance Program (HEAP)
• Implement consumer protections by improving the accuracy and efficiency of pumps that dispense ful and labeling the energy efficiency of tires
• Increase the competition among service station dealers by allowing the sale of unbranded motor fuel and making information about prices readily available to consumers

The Assembly package also includes legislation instituting a recapture and windfall profit tax provision on big oil companies with a prohibition on passing the tax on to consumers. The revenues resulting from this will to go a fund that supports energy savings measures for consumers as well as helping pay home heating bills this winter through the Home Energy Assistance Program.

"The measures the Assembly is acting on this week continue the Assembly Majority’s long-standing commitment to working families. The Assembly Majority is putting forth comprehensive, effective energy legislation aimed not only at providing more relief, but at ensuring that the steps taken translate into direct savings for consumers and are not simply yet another windfall to fatten already bloated oil company profit margins"

Sheldon Silver

On a national level, Silver and Cahill emphasized that only a comprehensive national strategy would be enough to reduce our dependence on foreign oil, investments in alternative fuels, and a renewed emphasis on energy efficiency; providing meaningful long-term relief for consumers.