Friday, September 12, 2008

Let Us All Not Register Our Shock At The Same Time

Baseball has a had a long and rich history of teams taking advantage of and, in some cases, screwing over cities in the context of stadium construction. In most cases, the local citizens suffer. Here's a new one: a team and a city conspiring to screw over not just local taxpayers, but everyone in the country:

In January 2007, the city assessed land under the new Yankee Stadium at 10 times the market value of virtually all other land in the South Bronx neighborhood . . . Lawmakers in Washington and Albany are investigating whether city officials inflated the new stadium's land value to make it possible for the Yankees to pay back nearly $1 billion in tax-free bonds for the project . . .

. . . The Yankees deal calls for the team to begin paying back its original bonds once the new stadium opens in April through the use of something called Payments in Lieu of Taxes. IRS rules say such payments can't be higher than the official tax on the property that is being financed. In other words, the Yankees need the highest possible assessment to be able to make their huge debt payments.
Does this surprise anyone?

1 comment:

Pete Toms said...

No, this - PILOTS - has been going on for a while. Another spin on this is TIFs. Tax increment financing - which IIRC - is public money being repaid by the revenues which will accrue from an increased tax base resulting from the construction of the stadium. Nobody credible thinks this is sound. I scan read the link ( familiar with the journalist on this subject ) and I don't think it mentioned that Congress is making noise about PILOTS as well.

Gonzalez & Neal deMause @ Field of Schemes are the two most vocal opponents of the deal the Yanks are getting from NYC. PILOTS, infrastructure, real estate, and broken promises to the community in the Bronx who sacrificed park land etc. to accommodate the Yanks.

If you want a different spin, Zimbalist in a not so recent SBJ editorial thought the Yanks were gettin a fair shake from NYC.

I've said it before here but anybody interested in this subject should read "Public Dollars, Private Stadiums". It's pretty current and very opposed to the practice.