Skirting the Law?
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.”
