This morning in Yankeefunland: Assemblymember Richard Brodsky’s surprise last-second hearing on the latest round of taxpayer-financed Yanks and Mets stadium bonds, with promised testimony (under duress) from Yankees president Randy Levine and city Economic Development Corporation chief Seth Pinsky. The state assembly not having wrapped its brain around WiFi yet, I wasn’t able to liveblog, but did keep a running diary of the proceedings:
10:08 am: The hearing has begun, Brodsky having just held court before a media scrum that would have been unthinkable back when this project was first approved. His main theme: The Yankees stadium project would provide “only 22 new jobs” compared to the old one. He then hands out a factsheet to the media (“We only have a limited number, so everybody share!”) that clarifies that this only refers to year-round, full-time employees; counting ticket sellers and hot-dog vendors bumps that up to 1,375 new jobs, though most of them only work 81 days a year.
10:16: Comptroller Bill Thompson is first up, as we await Levine and Pinsky’s presence. “I initially supported this project,” both “as a baseball fan and as a New Yorker,” says the mayoral candidate, but adds he’s now determined the city’s cost figures were “grossly inaccurate,” and believes this Friday’s vote on $370 million in new Yankees bonds should be postponed. (As usual, nobody’s so much as mentioning the Mets, who are up themselves for $83 million in new tax-free bonds.) “The administration is giving away the store to the Yankees and getting too little in return,” says Thompson, pointing in particular to the city’s giving back of a luxury suite – one whose acquisition cost taxpayers, in his estimation, $1.2 million a year in lost revenues – in exchange for an annual payment that could be anywhere between $100,000 and $800,000 a year. “What they’ve done is to take a bad deal and make it even worse.”
10:30: Brodsky asks deputy comptroller John Graham how exactly the Yankees managed to take the same $5 million rent deduction for “stadium planning costs” two years in a row, as a comptroller’s audit found last November. Graham says he believes the Yankees blamed it on “a bookkeeping error.” Brodsky: “A bookkeeping error?!?” Graham: “I’m now paraphrasing.”
10:34: Brodsky is back on the topic of the “more than $2 billion” in property taxes that he claims the city is giving up as part of the Yankees deal. It’s a crazy-high number, especially in tough economic times, and well higher than previous estimates of the city’s losses. How Brodsky came up with it, apparently: Taking all of the $60 million-or-so in annual PILOTS (payments in lieu of property taxes) the Yanks will be using to pay off their stadium bonds, and then multiplying them by the 30 years the bonds will take to pay off.
There are some problems here: First off, adding up cumulative payments without accounting for the fact that some won’t be owed for decades yet is a big economic no-no; it’s like claiming you bought a $1 million house by adding up all your mortgage payments over the next 30 years. Second, even if you don’t accept the city’s argument that the Yankees wouldn’t owe property taxes at all since they’re building on city-owned parkland – the city could easily have told the team, “You want to build on it, you gotta buy it” – they still would have likely been eligible for standard outer-borough “ICIP” tax breaks for the first 20 years or so regardless. The Independent Budget Office is due to issue new figures today on how much the full tax break, net of ICIP, is worth to the Yanks; its last estimate was in the $300 million range, which would bring the total city subsidy for the project to about $600 million – practically chump change!
10:42: Levine and Pinsky still haven’t showed. (They’re due at 10:45.) Brodsky is vamping by reciting the list of people he invited to speak who didn’t show up (Hal Steinbrenner, city finance commissioner Martha Stark, Freddy the Pan-Banger – okay, I may have misheard that last one).
10:45: Now Brodsky is pointing out the fire exits. This gets a few chuckles.
10:57: Levine and Pinsky are finally seated at the witness stand, though Levine’s accompanying attorney still doesn’t have a chair. (Brodsky grudgingly sends someone to find him a chair, but makes clear that only Levine and Pinsky are to testify – lawyers will only be allowed to whisper in their ears, apparently.) Pinsky immediately takes a page from the Zygi Wilf playbook and launches into a defense of the Yankees stadium project as economic stimulus: We now have a “miraculous consensus,” he says, that the only way to reboot the economy is through “priming the pump,” and “the new Yankee Stadium is a textbook example of this.”
Pinsky then goes on the counterattack, decrying what he calls the “deliberately inflammatory language” like “Soviet-style” and “stonewalled” that Brodsky has used to describe city actions during the stadium investigation. “Let’s put an end to what Barack Obama has called ‘gotcha politics’!” he insists. This gets about the same level of chuckles as the fire exits.
11:10: Levine begins his opening statement, his face pinched and beet-red as usual. “The New York Yankees, not the taxpayers, are paying for the construction and operation of the new stadium,” he begins. (True as far as it goes, though the Yankees are also getting more than $800 million in public tax breaks and land costs to help ease the pain of paying their own bills.) At the just-closed city-owned Yankee Stadium, he continues, “the city does not collect property taxes now, and without this financing, the Yankees would not have built a new stadium, and thus no taxes would have been received.”
Except, of course, that the Yankees have now already built their new stadium, so it’s hard to argue that giving the Yankees new tax-free bonds and additional tax breaks isn’t a loss to taxpayers. We’ll see if Brodsky picks up on this.
Levine then returns to his what’s-good-for-the-Yankees-is-good-for-America theme: “In these tough times, you should be encouraging us to create jobs instead of engaging in political grandstanding that discourages it. We do not just talk about creating jobs, we are doing it. If you can tell me who in this City, at this time, has created this level of employment and stimulus, I would be interested. However, I’m confident the answer is no one.”
He then nominates Brodsky for the “grandstanding hall of fame,” and is done. Question time!