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On June 15, Mayor Michael Bloomberg stood before a packed crowd inside the Yankees' Stadium Club and proclaimed the city's plans for a new home for the Bronx Bombers. The new 51,000-seat facility, promised the mayor, to be built atop the ball fields and tennis courts just north of the House That Ruth Built, would be a "stunning" addition to the Bronx, with "the state helping the way, but George footing the billit doesn't get any better than that."
Steve Swindal, George Steinbrenner's son-in-law (and newly anointed successor as the Yanks' managing partner), went further, declaring bluntly: "There will be no public subsidies." Coupled with the new Mets stadium announced three days earlier, the announcement seemed to mean that Bloomberg had pulled off a miracle: From the ashes of his Olympic dreams, he would provide New York with the twin baseball palaces that Rudy Giuliani had proposed in the dying days of his rulebut this time, at no cost to the public.
Well, not exactly. The truth about stadium deals is in the fine print, and nowhere has the print been finer than in the deals concocted by Bloomberg and his sidekick for economic development, Dan Doctoroff. An analysis by the Voice of public documents reveals that when all is said and done, the Mets' and Yanks' "privately financed" stadiums would stick taxpayers with a bill of at least $800 millionand possibly hundreds of millions of dollars more.
Playing hide-the-subsidy with sports stadiums is nothing new, of course. Judith Grant Long, a Harvard urban planner who has examined the financing of all 99 existing major-sports facilities, found that when unreported subsidies are included, public stadium costs leap by an average of 40 percent. Even the San Francisco Giants' SBC Park, considered the Holy Grail of privately financed ballparks, sported a final public price tag of $142 million. "The 1960s and '70s leases are very different animals" from those in recent years, Long explains. "As the lease terms became more and more complex, the subsidies were obscured."
The latest Yankees plan is a textbook case of subsidy devils lurking in the details. According to the mayor, the only city money required is $135 million to replace athletic fields that would be obliterated along with Macombs Dam and Mullaly parks. (Yankee Stadium would be torn down and converted into a softball field.) The state would kick in $70 million for four new parking garagessome with ball fields on their rooftopsbut would recoup its money from parking fees. Steinbrenner, meanwhile, would foot the bill for all $800 million in construction costs.
It's in the lease terms, though, where you find the gravy for the Yanks. First off, while the Yankees would pay operations and maintenance at Yankee Park at Adidas Field, they would no longer have to pay rent. While Bloomberg has presented this as a wash, the parks department reports that the Yankees have in recent years averaged $7.5 million in annual rent payments after deducting maintenance. Over 30 years, then, letting the Yanks play rent free would cost the city the equivalent of $103 million in up-front cash; for good measure, Bloomberg has proposed kicking in $15 million in rent rebates for the team's final three years at Yankee Stadium.
As rent goes, so go property taxes: The Yankees would pay none. So-called "as-of-right" bonuses for building in the outer boroughs would provide a partial tax break in any casemore on that in a bitbut the special tax break alone would cost the city about $44 million in present value. A 100 percent break on sales tax for construction materials would net the team another $22 million.
Finally, while George would foot the construction bill, the state would be the one actually arranging the financing, in order to take advantage of triple-tax-exempt bonds. (As with the now dead West Side stadium for the Jets, the Yankees would repay these bonds with "payments in lieu of property taxes" to evade IRS scrutiny.) Tax-exempt bonds offer lower interest rates, at the price of passing along a chunk of costs to the federal, state, and city treasuries; IRS regs limit the team's potential benefits, but $55 million is a reasonable guesstimate.
The public's total Yankees outlay now stands at $374 millionand that's before factoring in a new Metro-North station or other transit improvements (the city insists they're not part of the stadium deal), shortfalls in state parking revenue (or losses to the city if state garages siphon off customers from existing city-owned lots), or cost overruns in building the new parkland, which could amount to tens or hundreds of millions more. Just counting those as-of-right tax breaks, part of a 20-year-old program to lure businesses to the lagging outer boroughs, would tack on an extra $299 million in city subsidies.
The Mets tab, meanwhile, promises to be even higher. Start with $85 million in city money (since no Queens parks would have to be moved, the Mets would use it for such things as driving pilings to keep the stadium from sinking into the Flushing muck), plus $75 million from the state, with no garage revenue to recoup the public outlay. The Wilpons, who own the team, would get the same breaks on rent, property taxes, and construction sales tax as the Yankees (net loss to the city: $124 million), tax-exempt bond benefits ($55 million), plus a kickback of $7 million a year in parking revenues that currently go to the city (present value: $96 million). Survey says: $435 million.