Field of Schemes: Yanks, Mets stadium subsidies to top $1 billion?

June 14, 2005

Yanks, Mets stadium subsidies to top $1 billion?

The other shoe drops today, as the New York Yankees have scheduled a 4 p.m. press conference to announce their plans for a $1 billion stadium in what's currently Macombs Dam Park across the street from the House That Ruth Built. According to the New York Times, the team would pay the $800 million construction cost - about 40% of which he'd recoup from other MLB teams via reduced revenue-sharing payments - while the state and city would spend $220 million to build new parking garages and compensate for the destruction of Macombs Dam Park by building a new waterfront park along the Harlem River and new athletic fields atop the garages.

Meanwhile, new details have continued to emerge about the city's twin stadium plans for the Mets and Yanks, some of which I discuss in my article in today's Village Voice:

Both deals would take advantage of the same fake property-tax dodge that the Jets would have used for their stadium (and which the Nets plan to use for their proposed Brooklyn arena), whereby the teams pay no property taxes, instead giving "payments in lieu of property taxes" (PILOTs) to the government, which would use them to pay the teams' own stadium costs. Whether this is considered a public subsidy is bound to be hotly contested, as it was in the Jets case: The teams will doubtless argue that the city currently gets no property-tax revenue from the land where the stadiums would be built, so this is no loss to the city. On the other hand, one could easily argue that if you're going to pave Macombs Dam Park, you could just as easily do it for a housing development as for a baseball stadium - and that would pay property taxes, likely in the hundreds of millions of dollars.
While both the Yankees and Mets would pay stadium operations costs, neither would pay rent. Assuming that annual rents on the team's existing stadiums are about $5 million a year (the Yankees' average payment in recent years, according to the Times), this would amount to another public subsidy to each team of about $75 million apiece in present value.
Under the terms of the Mets deal, the team would get the first $7 million a year in parking fees at their stadium, money that currently goes to the city. This could amount to a present-value subsidy of another $100 million.
There could be additional public costs that have not been revealed. Earlier reports, for instance, said that the 161st Street subway station would need to be extended to accommodate the new stadium; no price tag has yet been established for mass transit improvements, which could include both subway and commuter-rail projects in Queens and the Bronx.

Add it all up, and you get a combined public cost of somewhere from $400 million (the official reported cost) to well over $1 billion (if all of the above hidden costs are counted, including the loss of property-tax revenue). Now you're starting to talk real money.

One more tidbit that's leaked out about the Mets plans: Apparently deputy mayor Dan Doctoroff let slip at Sunday's news conference that the city's "infrastructure" costs would include sinking girders in the swampy Queens soil to serve as a foundation for the new stadium. Sound familiar?

COMMENTS

Sounds like a pretty good estimate, only a $600 million difference. I think the higher number will probably prove to be more accurate.
Posted by: Michael at June 15, 2005 08:31 AM

I'm not sure how mass transit expansions or renovations should be considered special deals for the teams. Wouldn't any other large building project (say, an office tower) require the same kind of infrastructure improvements? Taxpayers might be footing a chunk of change for these stadiums, but it doesn't seem to me that this is nearly as egregious as fully taxpayer funded stadiums in other cities or even the West Side football stadium proposal.
Posted by: David at June 15, 2005 04:32 PM

You obviously don't read this site very often. I'm still waiting for an expose on how federal highway funds are just a subsidy to billionaire sports owners. How dare the public pay for roads to get to your sports stadiums! That's billions in tax dollars wasted!
Posted by: Bob at June 15, 2005 06:29 PM

No, an office tower, or apartment buildings, wouldn't require the same level of transit upgrades, since you wouldn't have 50,000 people moving through all at one time. (And, of course, leaving Macombs Dam Park in place wouldn't require anything.) Extending the 161st Street subway station and moving the off-ramps from the Macombs Dam Bridge aren't in the same league as the $2 billion subway line that the Jets wanted, no, but they're still "improvements" that don't do much for anyone whose initials aren't G.S.
Posted by: Neil at June 15, 2005 07:51 PM

They don't do much for anyone whose initials aren't G.S.? Have you been to Yankee Stadium lately? Have you tried walking more than a block or two away from the Stadium? Right now, any sort of development will help that area of the Bronx. If one of the ways to accomplish that goal is through a new Yankee Stadium and the capitol improvements that will come with that project, so be it. It seems to be the only way politicians will agree to major improvement projects anymore.
Posted by: Ben at June 16, 2005 02:54 AM

Explain to me exactly how demolishing the only large neighborhood park and replacing it with some ballfields on the wrong side of the Metro-North tracks is an "improvement"? Or how moving the subway entrance to the far side of River Avenue is going to help the Court Deli or the other businesses along 161st Street?
Posted by: Neil at June 16, 2005 08:05 AM

Now we get to the real heart of the problem, the area surrounding the stadium, NOT the stadium itself. Since that area is, and has been in, a state of disrepair I wouldn't doubt if part of that disrepair has remained because G.S. may have powerful friends who already own the property in the surrounding area that have helped block any other redevelopment plans. My point is this, as the gentleman stated earlier, just put up apartments and offices buildings...that is how to improve the area, not by having the entire area affected for a business that is a couple of days a week, where as office buildings and residences are active all year round. If there are offices and apartment buildings, as stated, there will be revenue which is sorely needed by the city; additionally, people working and living in the area will rebuild its character by just living and working there; they will be more inclined to keep the area safe and well kept because they live there. I believe that this would get the residents, both business and citizenry, to respect the area and maintain that respect because they live there; they don't just hop on a bus or subway to come and leave. Anyway, my main point is, the revenue, which the city desparately needs...
Posted by: Byron at June 16, 2005 08:10 AM

The Metro North stop is one thing; the line goes right there anyway, so all you have to do is throw up a platform and some signs. Otherwise, I fail to see any benefit from any part of this project.
Posted by: Timmer at June 16, 2005 03:09 PM