When elephants fight

The New York Jets‘ proposed Manhattan stadium would already be the most expensive in history at $1.4 billion; now the PR battle over the project is setting spending records as well. Common Cause reports that the stadium debate has already generated $11.5 million in TV ads and lobbying expenses, most of it from the Jets ($3.3 million) and from Knicks and Rangers owners Cablevision ($8.2 million), which is bankrolling the plan’s opposition. While Guinness is sadly silent on this subject, the total already blasts past such monuments to vote-buying as the $9.2 million Seattle Seahawks owner Paul Allen spent to stage and lobby for a 1997 referendum giving him $325 million in public funds for a new football stadium.

Despite being outspent, Jets owner Woody Johnson isn’t necessarily at a disadvantage in the battle for hearts and minds, according to Common Cause director Rachel Leon, who notes that both Mayor Michael Bloomberg and Gov. George Pataki have backed the plan: “You can never underestimate the power of incumbency. Anytime the mayor or the governor says anything, it’s news. It certainly matters in a debate like this.”

On another battleground in the Development Project That Ate Manhattan, meanwhile, city comptroller William Thompson has an op-ed in today’s New York Post fleshing out his earlier objections to the city’s back-door borrowing scheme for funding the Hudson Yards project. Writes the comptroller:

The city will need to spend as much as $3 billion for infrastructure such as expansion of the No. 7 subway line and construction of a deck over the Eastern Rail Yards and other improvements. To pay for this, the city intends to sell $3 billion in bonds. Plus, since the project won’t generate revenue until at least 2012, the city must sell another $1 billion in short-term notes to cover the interest payments on the bonds.

This is fairly routine practice for major construction projects, as part of the city’s capital budget process, which involves the City Council and the comptroller. But this project was never approved by the City Council and is not included in the capital budget. [Instead] the city wants to guarantee the notes and bonds through a little-known public-benefit corporation called the Transitional Financing Authority (TFA). … If the project doesn’t meet revenue targets, the TFA has the ability to use our tax revenues to pay all of the interest and principal on the bonds and notes before funds are released to pay for vital services.

What’s more, this financing plan sets an extremely troubling and inappropriate precedent. Any mayor, at any time, could elect to establish a local development corporation, as Mayor Bloomberg has done with Hudson Yards, to divert funds from the city’s operations without City Council consent. In short, the mayor has proposed a backdoor financing scheme that not only is fiscally imprudent, but also flouts the principles of responsible government.

If the West Side development project is worthy of the city’s investment, it should be included in the city’s capital plan. There it can be fairly and rigorously evaluated against other important projects, such as building new schools or senior centers.

In short, Mayor Bloomberg is proposing a new end run around legislative oversight to match those already used by the state. No word as of yet from city council speaker Giff Miller – a likely opponent to Bloomberg in next year’s mayoral race – on how he feels about being cut out of the approval process for a billion dollars in city spending.

Comments are closed.