July 02, 2008
Yanks bond costs a state secret
Today's Yankees stadium bond hearing delivered more heat than light - at one point, assemblymember Richard Brodsky berated the sole witness, city development chief (and fellow Harvard Law School alum) Seth Pinsky, "Who did you have in Civil Procedure? Because you would have gotten an F for that answer") - but in the course of three hours, it did reveal answers to a few questions about the Steinbrenners' latest tax-exempt bond demands:
- First off, no one knows whether the exact bond request is $350 million or $400 million because no official request exists: The Yankees have only submitted a "partially completed draft application," according to Pinsky. (The Mets, he said, are working on their own, smaller bond request.) Serious bond talks won't be finalized until the IRS makes a decision on its new tax-exempt bond rules.)
- Those rules, Pinsky told reporters following the hearing, would effectively preclude the use of tax-exempt bonds for New York sports stadiums - while bonds could theoretically be sold with the bond payments floating with tax assessments, as the IRS is thinking of requiring, "the investment community has said that the risk of the floating rates is too great, and that people won't buy bonds that are secured by revenues where they're not sure what the total revenues will be." If true, this could mean the fate of the Nets' Atlantic Yards plan rests on a friendly decision by the IRS, though Pinsky was quick to add, "I believe that this project is going to happen - we believe it's a very important project for Brooklyn."
- Though Yankees COO Lonn Trost told reporters in February that the added funds would go to pay for such things as a six-story-high scoreboard, expanded concessions facilities, and rush charges stemming from delays in getting the project off the ground, Pinsky refused to give any details about where the money would go, even redacting what information the Yankees provided in documents supplied to Brodsky's office, on the grounds that it was "competitive information" that might give the team's suppliers an advantage in negotiations. (If you've ever met Richard Brodsky, you can picture what his response was to this. If you haven't, here's a reasonable facsimile.)
For more on the hearing, see my report at the Village Voice website, real soon now.
UPDATE: here's a direct link.
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