Observer » NYC Independent Budget Office

IBO: New Yankee Stadium Costing City, State $528 M.

Eliot Brown — Wed, 14 Jan 2009 22:12:06 -0400

With two days until the city is slated to approve a fresh batch of more than $500 million in tax-free bonds to finish the Yankees and Mets’ new stadiums, the city’s Independent Budget Office has released numbers calculating subsidy, adding a bit of clarity to a somewhat murky debate.

Between the new Yankee Stadium and Citi Field, IBO estimates the total cost of various city, state and M.T.A. subsidies at $762.3 million—$528 million for the Yankees and $234 million for the Mets. That's about 35 percent more than the $499 million that the IBO calculated in 2006 for the two projects (costs, particularly on infrastructure and parks for the Yankee project, increased significantly). Taken with federal subsidy on tax-exempt financing for the structures, the total cost to the public is estimated at $1.2 billion, according to the IBO. [Full figures in an IBO document here].

The Yankees and Mets pay the cost of building their stadiums, though subsidies come in the form of tax exemptions, infrastructure and rent abatements.

The latest round of bonds—and the cause for all the recent fuss—represent a small fraction of the total public sector cost. Between the city and state, about $3.6 million is lost in foregone taxes in the latest round, with the federal government losing about $90 million in potential tax revenue, according to the IBO figures.

Yankee Stadium is now slated to cost $1.3 billion, and Citi Field has a price tag of $800 million.

Not that it changes much, but it’s worth noting that the 2006 estimates were in 2006 dollars, while the IBO numbers from today are in 2009 dollars. The city has long held that the benefits are worth the investment and the financing is leveraging private investment and a large federal tax exemption at minimal cost to the city.

The IBO issued the figures at a somewhat tense hearing today, held by Assemblyman Richard Brodsky.

Yikes! Report Paints Really Glum Fiscal Picture Courtesy of Wall Street, Real Estate

Eliot Brown — Mon, 07 Jan 2008 18:31:59 -0400

The city’s Independent Budget Office is predicting city tax revenues from real estate sales will drop by almost one-third this fiscal year (July ’07 to June ’08). Real property transfer tax and the mortgage recording tax provide a barometer of the health of the real estate market—the city saw an all-time high $3.3 billion between the two taxes in FY 2007—as a slice of every transaction and mortgage comes into city coffers.

“IBO forecasts a major residential market slowdown in calendar years 2008 and 2009, with fewer transactions and stagnant prices,” an IBO report [PDF] released today says, adding that it expects continued, if modest, growth in commercial real estate. “The slowdown will extend to Manhattan, although median prices there are expected to increase modestly. Declines in other boroughs are expected to be more pronounced.”

Taken with a decline in Wall Street profits (the report predicts Wall Street will realize a mere $5 billion in profits when all is counted from 2007, down from the $20.9 billion seen in 2006), the IBO is painting a not-so-rosy picture of the city’s fiscal health. Projected for the upcoming budgeting season: a $3.1 billion budget gap for the next fiscal year (FY 2009), followed by a $4.6 billion gap in 2009.

The IBO and the city’s Office of Management and Budget are historically conservative in their estimates, and for much of Mayor Bloomberg’s term have underestimated the revenues that came into the city. Of course, analysts weren't predicting a possible recession at the time, but hey, who knows what can happen?

Events for December 5, 2006

Mon, 04 Dec 2006 18:00:00 -0400

The Center for New York City Affairs and the NYC Independent Budget Office hold a panel discussion on the City's property tax system at the New School.

Council Member Mike McMahon announces funding for City Harvest to provide produce to residents at the Stapleton Houses in Staten Island.

The New York City Board of Health meets to discuss the trans fat ban proposal and dog leash rules in parks.

Eliot Spitzer meets with Andrew Cuomo to discuss transitioning at the Attorney General's Office.

Colin Powell and the CEO of New York Life discuss contributing towards the expansion of the Colin Powell Center for Policy Studies at City College at the City College of New York.

A coalition of business, government, transportation, labor and community groups oppose congestion pricing schemes at a press conference on the steps of City Hall.

Global Witness and Amnesty International hold a press briefing on blood diamonds at the Open Society Institute.

—Nicole Brydson