January 31, 2005
Apples to apples
So now that all the cards are on the table (more or less) regarding the New York Jets stadium deal, I think it's finally possible to say how much the team's public subsidy would be worth. This is going to involve a bit of math, but I'll try my best to make it painless. So with no further ado:
The Jets are asking for $600 million in city and state money: $375 million to build a platform over one square block of the West Side rail yards, and $225 million for the stadium's retractable roof. The Metropolitan Transportation Authority's requested payment for development rights to its land, though, is based on a rate of $130 per square foot - the same rate as the neighboring parcels that have actual land on their land, not train tracks, and so don't need giant platforms before they can be built on.
What this means it that the Jets are right: The $375 million platform should rightly be considered an investment to bring that block up to par with the blocks around it, not a subsidy. So this would lower the total public subsidy to $225 million.
But hold the phone - the developers who'd be paying $130/sq ft for those surrounding parcels would also be paying payments in lieu of property tax (PILOTs) to the city. The Jets wouldn't - their so-called "PILOT" payments would be used to pay off $400 million worth of their own stadium bonds. That $400 million, then, is money that would otherwise be going into city coffers if another developer took over the stadium land - meaning it should be considered a city subsidy as well. (I know I'd previously said this was debatable, but $400 million turns out to be just about exactly what the city would get at the $12-per-square-foot tax rate being assigned to the surrounding Hudson Yards development project, so I think the debate can now end.) All of which brings us back up to a total public subsidy of: $625 million.
Even this figure requires lots of assumptions - that any cost overruns are borne by the Jets, that the Jets and Javits Convention Center work out an equitable share of revenues from conventions that use the stadium, and that the Jets agree to pay the MTA's asking price, which so far they say they won't. And it ignores the opportunity cost of building a stadium as opposed to, say, housing, which was estimated by the RPA to be a loss to the city of a whopping $444 million per year. But at least we have, pardon the expression, a ballpark figure to work with.
All this to build a stadium where the tickets to the Jets games are already sold out? Brilliant!
Let's just hope the NY Cosmos are revived by MLS and play there during April - October.
Posted by Bertell Ollman on January 31, 2005 04:11 PM
You sure do like soccer, don't you? :p
Posted by Tyler Nicholson on February 1, 2005 05:24 PM