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March 31, 2005

Jets win land battle, keep alive stadium war

After two months of sound and fury, it looks like the New York Jets will get their stadium land after all: News reports are unanimously indicating that the Metropolitan Transportation Authority board plans to approve the sale of the West Side rail yards to the Jets at its meeting today. In line with their final bid, the Jets would pay $280 million in cash (actually $50 million in cash, a $200 million letter of credit, and a $30 million reserve fund for site maintenance) to the MTA, with a suite of developers lined up to pay $440 million for additional air rights, if the city council passes the necessary zoning.

If so, this means that the MTA ends up getting about $50 million less than it wanted for the land (though $180 million more than the Jets wanted to pay), without the trouble of hauling in George Mitchell to arbitrate. It also means that the total stadium cost, including land acquisition and infrastructure, is now flirting with an incredible $2 billion.

So what does this mean as far as whether the stadium actually gets built? The New York Post, which can't resist a bad sports metaphor, wrote that the Jets' stadium drive "will cross the goal line today," but in fact it just gets back to the field position it was in two months ago: With $600 million in city and state funds yet to be approved, and state legislative leaders showing no inclination to sign off on the deal anytime soon. If anything, things have gone backwards, with the New York city council trying to block Mayor Michael Bloomberg from spending $300 million in city money without council approval; and the New York Times now reports that the $300 million in state funding proposed earlier by Gov. George Pataki "is not included in the state budget now nearing approval in Albany." Without the public subsidy, the all the Jets have is an option to buy a rail yard and a $2 billion price tag.

And maybe not even that, because the MTA land sale could yet be derailed - see, I know my way around a punny metaphor, too - by legal challenges. Cablevision's lawyers have already written to the MTA demanding that the Jets bid be disqualified for violating the MTA's own bidding rules. And Gene Russianoff of the Straphangers Campaign, a mass transit watchdog group, told the Times his group is considering filing its own lawsuit: "We're going to take a hard, serious look at whether they violated their own procurement rules." Looks like we're headed to overtime!

THIS JUST IN: It's official - the MTA board has voted unanimously to approve the Jets' offer.

COMMENTS

Well, we've seen how the Jets have handled overtime in the playoffs, so there's still hope that this whole travesty of a bidding process won't be the final one.

Posted by Mike Hodson on March 31, 2005 09:27 AM

Well, you actually support the Dolans and their monopoly and believe in their intentions behind their housing project?

Posted by Mario P. Labot on March 31, 2005 04:28 PM

I believe James Dolan about as far as I can throw his guitar, but at least he's not asking me to pay $600 million for his project. Clearly reopening the process to more bids would be ideal, but that's not likely so long as Bloomberg and Doctoroff can threaten retaliation against any developers who bid against the Jets.

Posted by Neil on March 31, 2005 04:38 PM

i don't think anyone believes the Dolan's are best choice for the land its just that their bid requires 0 public subsidy (at least superficially.) Clearly the MTA wasn't in it for its own best interest or they would have taken the highest bid. When you have at least 7 out of 11 i believe, members on the board working for Pataki and Bloomberg clearly the Jets will win. I just can't wait to see the thing built and Woody Johnson bust outta there with the 1)most expensive team in the NFL 2)the most expensive stadium in the world. He's probably gonna make a 700 million dollar profit on the sale of the team or more.

so Neil when's the next revision coming out? You can write a whole new book on this saga.

Posted by Phil on March 31, 2005 04:46 PM

Doesn't it seem like this has been a done deal for some time that only the courts can try and stop? Only the state legislators IMO have the ability to throw up a serious roadblock. I'm not sure if alternate funding would be found (private or public) but on the city side it seems like Bloomberg can push this through. Is it worth putting public funds into? I don't know. But is that awful and the end of the world if NY has a NFL stadium in Manhattan? However it works out getting the Jets and Giants separate identities might be a good thing and get a bigger rivalry going (NY vs. NJ maybe). -------new paragraph-----------------Bottom line though if the stadium is worth it won't the Jets pay for it no matter what? If not, then probably a bad deal for the city, but it doesn't look to me like anyone can stop Bloomberg here.

Posted by swedcrip on March 31, 2005 06:11 PM

The MTA was looking out for its own intrest, not only will this stadium produce thousands of jobs, but it will bring in millions in revenue for the city and state each year. Along with the state and city the MTA has alot to gain from this deal. Every sunday that the jets play a home game the MTA will have thousands of riders from the LIRR, subway, and metro north that normaly would be driving into New Jersey and spending their money in that state. In return the riders will gain from the extra income, because the MTA wont have to raise the fairs as much do to income.The MTA has made the best choice for them, and along with them,City workers the city and the state have alot to gain. Remember, the people that are complaining, are usualy the ones looking for ways to keep shoppers and revenue in the city. Isnt ironic that they have one of the best ways to keep money in the city and state right in front of them, yet they are opposing it.

Posted by andrew on March 31, 2005 07:16 PM

Andrew: The jobs argument is absurd. Giants stadium, with TWO football teams, has less than 100 full-time employees. As for part-time jobs like popcorn vendors, are those the types of jobs NYC should be focused on for the 21st century? Nobody can raise a family in the NYC region by selling popcorn for a few hours a year.

Public sector funds should be spent on public sector projects. And if a private sector, for-profit company - like the Jets, Home Depot, Starbucks, Loews Cineplex, or Marriott Hotel - wants a store/building/stadium that they'll own 100%, they need to pay for it themselves 100%.

Government shouldn't pay corporate welfare just to receive tax revenue. Just look at all the other businesses in NYC. They generate tax revenues & jobs, and they didn't get a $600 million corporate welfare payment.

That's the way the system should work. Businesses and individuals pay taxes to the government. The government spends that money on public sector projects like schools, libraries, transportation, police, fire departments. This creates an inviting environment for more people & businesses to move in, grow, and pay more taxes.

Instead, the Jets want New York taxpayers to pay 40% of the cost of the West Side stadium, but get 0% of the equity, and 0% of the net profits. This is not an investment. This is a corporate welfare payment. If this were an investment, New Yorkers would pay 40% of the cost, and get 40% of the equity, and 40% of the net profits.

Fact is, the West Side Stadium scam would be a theft of public funds, a $600 million corporate welfare payment to a for-profit, private sector company, and a permanent traffic cancer for NYC.

Posted by normaldude on March 31, 2005 07:38 PM

There's no money for this little project in the new state budget? Maybe the governor is planning to divert the revenue from his video lottery terminals, but what happens if Pataki decides he'd rather not pony up his half of the $600 million? Would that leave NYC on the hook for the entire amount? Can the city back out of the deal if Pataki reneges?

Posted by Cube on April 1, 2005 04:44 PM

The talk back in November (see my posting about it then) was that if the $300M wasn't in the state budget, the city would front it and the state would find a way to pay the city back "under the table," as it were. It's not clear how that would work, though it's possible ESDC (state) could redirect some of its revenue to EDC (city) without the legislature needing to sign off on it - I think that's what they just did with the Bank of America PILOT payments. A lot of this, clearly, depends on what the courts say about the use of PILOTs as a slush fund.

Posted by Neil on April 2, 2005 11:48 AM

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