New Yankee Stadium Deal Criticized by Matt Wettje
The most successful franchise in baseball history is the target of much political debate. It has been claimed that the New York Yankees and New York City officials have conspired to misrepresent the value of city land to the IRS in order to gain additional tax deals from the federal government for the construction of the new stadium in the South Bronx.
The Yankees have connections with some important city officials. This has helped lead to some feeling that there has been an abuse of public dollars subsidizing a project that is for the sole benefit of a private entity, and certain representations have been inaccurate. The Yankees initially planned on obtaining over $940 million in tax-exempt bonds to aid in construction finances for the new stadium. The team then requested an additional $350 million in tax-exempt bonds in June to cover other stadium costs. This brought the stadium price tag up to $1.6 billion, the most expensive sports complex ever built in the U.S. NYC will retain ownership of the land but won’t charge the team rent or property taxes.
Criticism has mainly been directed at the valuations of land in the South Bronx that was put forth by the Yankees and the city. It has been alleged that the Yankees and the city deliberately misstated land values of the area where the stadium is being constructed. The Yankees would inflate these numbers in order to obtain increased public funds. The higher the property value, the more tax-exempt bonds the IRS allow the city to issue the Yankees. This suggests possible fraud by financial architects of the new Yankee Stadium.
Yankee lawyers feel that this stadium increases the value of everything around it and without the tax breaks, they would have moved the stadium to another region. Therefore, it’s not just public dollars making rich people richer.
We will find out more on how this plays out and if there may be any disciplinarian actions at the next scheduled hearing on October 7.
http://amlawdaily.typepad.com/amlawdaily/2008/09/foul-ball-congr.html
Matt Wettje
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The New Yankee Stadium is also going to be a revenue making machine. I read in this article that Yankee Stadium will be selling naming rights to different parts of the stadium such as gates. Bank of America is one of the companies who is agreeing to pay $20 million for a part of the stadium. It was also said that the Yankees “will be allowed to amortize their stadium financing costs over 40 years”. If you want to learn more read this article:
http://www.theglobeandmail.com/servlet/story/LAC.20080925.BLAIR25/TPStory/Sports
stephaniehan - September 25, 2008 at 2:18 pm
I’m a huge fan of the Yankees and as cool as it would be to have a new stadium, was it really necessary to build a completely new facility? As it becomes more common for franchises to build new stadiums, someone has to end up paying for them. The old stadium definitely could have been used for years to come.
michaelmcardle - September 29, 2008 at 4:02 pm
Change is inevitable and as a Yankees fan I think the new stadium is a good thing. When building a new large scale project that will benefit a community tax breaks are necessary and expected.
patricksullivan - October 1, 2008 at 7:11 pm