Good Jobs New York, a watchdog organization, still thinks that the new Yankee Stadium is a bad idea. When the City Council approved the idea in April 2006, Good Jobs did not think it would pay for itself. Now, after additional city commitments, rising infrastructure costs and revised estimates by the Independent Budget Office, the group issued a new report today showing that taxpayers’ costs for the project had risen by another $217.4 million.
According to the nonprofit’s tally, costs to the city, state, M.T.A. and federal government for the project total $663.5 million—including the cost of constructing new parks to replace the parkland where the new stadium is being erected. That is more than twice the $315.7 million in benefits that Good Jobs calculates.
“Our numbers solidify that taxpayers were misled when they said it was a privately financed project,” said Bettina Damiani, project director for Good Jobs. “New Yorkers are paying for this by having our parks taken away and our tax dollars spent.”
Seth Pinsky, executive vice president of the city’s Economic Development Corporation, disputed the report’s estimate, saying that the city calculated that the stadium, and new parking garages, would result in a net gain for the budget of $76 million. He said that the Good Jobs study also failed to consider the indirect impacts, such as the positive press the new ball park would generate nationally when it opened.
“This stadium project is among the most expensive stadiums in the country,” Mr. Pinsky said in an e-mail. “It’s not an easy lift even for a wealthy team like the New York Yankees.”
The Yankees will build the $900 million ballpark using tax-free bonds, authorized by the city, which they will pay back with ballpark revenues. The team will not need to pay property tax nor rent for the land underneath the stadium, however, although it will be responsible for all maintenance costs. Currently, the Yankees pay nominal rent while the city is responsible for upkeep.
Mr. Pinsky acknowledged that the city’s estimate had not been revised since initial approval but said that cost increases since then should not have been dramatic. Good Jobs New York, however, said that new, unanticipated costs included $38.6 million that the Mayor and City Council pledged toward a new Metro-North station and another $32 million in capital funds because construction costs had increased.
In addition, the I.B.O. revised the methodology by which it estimates the foregone taxes on the tax-free bonds, and determined that the bonds awarded to the Yankees to build the stadium would cost the city $7.4 million more than previously thought–and that the state and federal governments together would lose another $62 million.
But the biggest difference between estimates by the city and Good Jobs—which used numbers from official government reports and the I.B.O.–is that the city is only estimating the impact on the city budget, while Good Jobs calculated the impact on the state and federal budgets as well. The Economic Development Corporation said that the federal subsidy—which Good Jobs put at $120.2 million–should be welcome news to New Yorkers since they pay more in income taxes than they receive in services.
“Tax-exempt financing provides a largely federal subsidy to a project that will bring important benefits to an underserved part of the city,” Mr. Pinsky said via e-mail. “This subsidy, which is permissible under IRS regulations, is one that makes sense for the city to leverage–especially given its status as a substantial contributor to the U.S. Treasury.”