While the battle between the Mayor and Governor over refinancing city debt continues to wind its way through the courts, no one has suggested unloading two Rudy Giuliani–era extravagances that the city can no longer afford: the minor-league baseball stadiums in Coney Island and Staten Island.
Neither of these boondoggles, built at a combined cost of $120 million, has revitalized the neighborhoods in which they were built, and they will cost the city $6 million a year in debt service for the next 30 years.
It’s even worse than that. The Staten Island Yankees are actually beating the city out of rent payments. According to City Comptroller William Thompson, the team conveniently undercounted their ticket sales by 300 last year. This creative accounting kept the team a hair under 125,000 tickets sold for the season. That’s the threshold after which the team would have to pay rent on the stadium lease. Mr. Thompson’s office also noted that the team owes the city $300,000 for electricity use.
This deal was negotiated by that great fiscal manager and leadership guru, Rudy Giuliani. It’s a disaster for the city-a deal far worse than the contract which David Dinkins negotiated with the U.S. Tennis Association for the use of the U.S. Tennis Center in Flushing Meadows, Queens. Mr. Giuliani condemned that deal as a giveaway. The major difference is that the city has use of the tennis facility when the U.S. Open is not being played, while the two stadiums were turned over to baseball executives, who charge for outdoor concerts.
These deals are worse than any of the eight minor-league stadium deals in New Jersey, a state not known for its fiscal probity. In New Jersey, teams must start paying rent after the first ticket is sold; none of them got what the Steinbrenner dynasty was given by the city’s No. 1 Yankee fan: city-owned space inside the stadium to sell Yankee hats, mugs and pennants even before a rent agreement was signed.
Mr. Giuliani vowed that the stadiums would bring about a resurgence of two old neighborhoods-St. George on Staten Island and Coney Island in Brooklyn. It hasn’t happened, unless you count a few more hot dogs being sold on game days at the Coney Island Nathan’s. Staten Islanders were promised “waterfront dining opportunities” in the stadium. That experience can be achieved only by munching on a blackened hamburger in the grandstand. The promised bistro never opened. But Mr. Giuliani built a new train station just for the ballpark.
Although he claims that all New Yorkers are sacrificing equally, Mayor Bloomberg has yet to step up the plate to end these sports welfare programs. Billionaire Charles Dolan still pays no real-estate tax on Madison Square Garden, which could bring in an estimated $13 million a year. The Yankees and Mets, with a combined taxpayer-subsidized payroll of nearly $300 million for 50 players, are each receiving $5 million a year for “planning and design” for new stadiums that Mr. Bloomberg said the city can’t afford to build. And nobody yet knows what the tab is or will be for the city’s 2012 Olympics bid, another dream project of the Mayor. Meanwhile, the Mets have yet to follow through on a simple yet worthy civic project: a promise to build a statue of Jackie Robinson at their minor-league ballpark in Coney Island.
The sports moguls apparently are following the example set on Wall Street-the street itself, not the metaphor-by a certain Richard Grasso, who is still left wondering how he can be accused of being “too greedy” in a world where success is defined by how many chips you can pile on the table. Mr. Grasso and the former Mayor worked out a deal that would be the envy of any sports owner: They proposed building a new trading floor for the New York Stock Exchange, a totally unnecessary expense in a time of electronic trading, at a cost to the city of $1 billion. Mr. Bloomberg (sort of) put the kibosh on that deal by demanding that the exchange pony up a few hundred million more, which has stalled the deal but still leaves the city paying $5 million a month in “penalty” fees on an empty lot downtown.
Required reading for the Mayor is a study recently released by the Center for an Urban Future, which pointed out that the city, under Ed Koch, David Dinkins and Rudy Giuliani, handed out roughly $2 billion in tax relief to 80 companies under the guise of job retention. More than half of those firms reduced their work force or left town anyway, and left the rest of us holding the empty bag of lost tax revenues, much like the “lost” tickets at the St. George baseball stadium.
It sounds like the Mayor has some collection work to do.
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