A Handy Brochure! City Fires Back at Brodsky Over Yankees Deal

richardbrodsky 1 A Handy Brochure! City Fires Back at Brodsky Over Yankees DealAfter taking heat from Assemblyman Richard Brodsky earlier this week on a deal over Yankee Stadium, the city has created a mini-retort report of its own, addressing Mr. Brodsky’s claims point-by-point.

Mr. Brodsky, who testified at Rep. Dennis Kucinich’s Congressional hearing today on the issue, lobbed a series of accusations at the city on Tuesday when he released his report titled "The House that You Built" [click here for a PDF, along with testimony]. Among other criticisms, Mr. Brodsky charged that the city artificially boosted the appraised land value for the Yankee Stadium site so as to better qualify it for a complex tax-free financing plan. Last week, Daily News columnist Juan Gonzales reported on the issue and quoted a "veteran Finance Department official" as saying, "Our assessors jacked up the numbers and the comparables … to justify the stadium bonds."

The city has denied the claim, and in its two-page response today, titled "Yankee Stadium: Fact vs. Fiction," it said the discrepancy between two city assessments was due to the inclusion of hundreds of millions in infrastructure in one of those assessments.

From the city’s Economic Development Corporation:

Yankee Stadium: Fact vs. Fiction

At a time when economic development is sorely needed in New York, AM Richard Brodsky is criticizing a project that has led to one of the largest private investments in Bronx history, creating thousands of unionized jobs. AM Brodsky was right on the many occasions when he voted in favor of this project, and fortunately is too late to derail its success. His new efforts, though, may create hurdles for other economic development projects, including, for example, Atlantic Yards in Brooklyn – a $4 BN project expected to create thousands of unionized jobs and 2,000+ units of affordable housing.

Jobs

  • AM Brodsky: "Only 15 new permanent jobs would be created."
  • Facts
    • Yankees currently project 1,000 new, permanent jobs; 5,000+ unionized, construction jobs
    • In 2006 IDA application, Yankees reported the following relating to permanent jobs:

§ 2006: 104 Full Time (FT)/879 Part Time (PT) employees

§ Projected Post-Project: 140FT/950PT + 550-750PT concessionaire employees

o City undertook the project for many reasons beyond just jobs ($1BN+ private investment; relieves City of maintenance that would have exceeded rent by $41MM over 40 yrs.; creates new parkland, infrastructure, and transportation improvements; 67% of construction contracts so far to NYC cos./29% to Bronx cos.)

 

Land Assessment

  • AM Brodsky: "The profound differences among the three appraisals were not an accident or omission."
  • Facts
    • DoF used standard procedures for assessment
    • IDA has appropriately had no involvement in assessment
    • Referenced valuations looked at land for different purposes and so had different assumptions (e.g., not all assumed completion of $1+ BN stadium; not all assumed $200+ MM of public infrastructure)

 

Luxury Box

  • AM Brodsky: "Luxury suite was secretly acquired by NYCIDA and the Mayor’s Office with the proceeds from stadium bonds."
  • Facts
    • City only has an option to use suite
    • Suite being built with taxable, not tax-exempt, debt
    • Deal was disclosed as early as 2006 in official statement for project bonds
    • Deal is consistent with what City has had for years at Shea, Cyclones and Staten Island Yankees stadia
    • Available to reward employees and entertain dignitaries to market New York (as cities around U.S. do)

 

Process

  • AM Brodsky: "Failure to provide accurate and complete information to the public about authority activities and finances."
  • Facts:
    • One of the most transparent projects in City history
    • Almost 20 public hearings (though Assembly held no hearings before its park alienation vote)
    • Approved by IDA Board, City Council, State Legislature, Gov., IRS
    • Hundreds of hours responding to Brodsky/Kucinich questions and testifying before Brodsky

 

Cost

  • AM Brodsky: "The total cost to taxpayers and savings to the Yankees is between $585 million and $826 million."
  • Facts
    • AM Brodsky says use of PILOTs to pay bonds is a cost to City, but before and after project, City will be collecting exactly the same amount in real estate taxes from the Yankees
    • AM Brodsky counts lost income tax on tax-exempt bonds as a cost of project, but:

§ Many bond purchasers may not be NYC/NYS residents and would not pay taxes even if bonds were taxable

§ Yankees have said that without tax-exemption, they would not have done project, so bonds for a new stadium would never have been issued on a taxable basis

o AM Brodsky looks at project costs and ignores benefits (2006 IDA cost-benefit analysis est. $41MM net benefit)

o City is contributing capital only to infrastructure ($174 MM for parks; $37 MM for general infrastructure;
$39 MM for Metro-North; $31 MM for soft costs)

APPENDIX

Noteworthy Votes by AM Brodsky (2005 to 2008)

  • AM Brodsky voted repeatedly in favor of new Yankee Stadium
    • Park Alienation (June 2005; S5818)
    • 05-06 Budget Amendment, incl. ~$70MM for Garages (June 2005; S5928)
    • 06-07 Budget, incl. ~$70MM for Garages (March 2006; S7166/A10486)
    • 06-07 Budget Amendment, incl. ~$70MM for Garages (April 2006; S7265/A10653)
    • 06-07 Tech. Budget Amendment, incl. ~$70MM for Garages (April 2006; A10652)
    • Education, Labor, Family Assistance and Econ Devel. Budget, incl. ~$70MM for Garages (S6807c)
  • Just this year, AM Brodsky voted in favor of bailing out two sports enterprises:
    • New York Racing Authority ~$140MM bailout (February 2008; A9998)
    • Monticello Raceway incentives (June 2008, S8700/A11744)

 

Selected, Recent Tax-Exempt Financings of Economic Development Projects (2002 to 2008)

  • 2002: Chatham Ridge Redevelopment in Chicago, IL ($18 MM)
  • 2002: Gallery Place Project in Washington, DC ($74 MM)
  • 2002: Mandarin Oriental Project in Washington, DC ($46 MM)
  • 2005: Downtown Mixed-Use Redevelopment in Kansas City, MO ($115 MM)
  • 2006: Former Myrtle Beach Air Force Base Mixed-Use Redevelopment in Myrtle Beach, SC ($31 MM)