The hits keep on coming from the new NYC news site Hell Gate, which I wrote for last week about how Gov. Kathy Hochul’s $1 billion Buffalo Bills subsidy was eased by the fact that New York state hates letting voters have input into actual budget decisions. On Monday, it was Doug Turetsky, former chief of staff of the city Independent Budget Office and a journalist before that, reporting on how much money New York City’s sports teams saved last year via not having to pay property taxes on their teams’ homes. How much, you ask? How much:
Take Barclays Center. The arena hasn’t paid property taxes since it opened in 2012. It’s a tax expenditure that will cost the city $85 million this year alone, according to the City’s Department of Finance Annual Tax Expenditure Report…
Madison Square Garden, the home of the Knicks and the Rangers, which are each estimated to be the most valuable teams in their respective leagues, benefits from politicians’ largesse too. MSG’s tax break is worth about $42 million this year, according to the Finance Department report…
The city will forgo about $111 million for Yankee Stadium this year and $106 million for the Mets’ Citi Field, according to the tax expenditure report.
That’s a total of $344 million that the Nets, Knicks, Rangers, Mets, and Yankees would normally be paying to the city in 2022, but aren’t because they don’t wanna. For the Knicks and Rangers, it’s because Mayor Ed Koch accidentally (he swore) gave them a special tax break in 1982 with no end date; for the Nets, Mets, and Yankees, it’s because they arranged to build on city- or state-owned land, then arranged to direct all payments in lieu of property taxes back into their own pockets to pay off their own construction costs, a gambit that helped them qualify for tax-exempt bonds that privately funded stadiums normally aren’t eligible for. (The IRS later closed that loophole, but not before the three NYC teams walked through it.)
None of this is unusual — as Turetsky points out, each and every year New York City forgoes about $7 billion in tax revenue via various and sundry tax breaks. Three years ago, I reported for Gothamist on a pair of 20-year-old tax breaks that the IBO had found to be utterly useless at creating jobs or reducing office vacancies, costing the city $400 million over that time. The two programs, the Commercial Revitalization Program and the Commercial Expansion Program, had been launched in 1995 and 2000 with exactly the sort of public oversight you would imagine:
“I have asked, ‘Show me one study, one survey that will prove or at least indicate that if we put this amount of money into commercial modernization and residential conversion that we’re actually going to create the jobs that are being claimed, that we’re going to get a good return for the public investment,'” [state senator Franz] Leichter said during the brief senate debate over the bill. “You know what? There isn’t one survey. They haven’t made one market study.”
True, no studies had been done, admitted bill sponsor Martin Connor. But, he asserted, none were needed.
“Senator Leichter says, ‘Where is the study?’ Well, we’ve all seen studies and reports and false promises in paper. The people in this business, in this real estate market, got together with their consultants and devised this because they believe it works, and they are the people that have to go out and sell. They’re the people who have to go out and sign those leases, sign up those tenants with these employees, and they believe it will work, and I say give them a chance.”
In 2019, I wrote that thanks to a newly attentive city council and that IBO report, “all signs are that [the CRP and CEP] will soon be gone.” Hey, how’s that going, anyway? Doug?
Together, [the Commercial Revitalization and Commercial Expansion Programs will] cost about $22 million in lost revenue this year…
So where’s Mayor [Eric] Adams on reviewing the dozens of tax expenditures made by the city? The executive budget he released last month reiterates the need for “staying focused on the efficient use of government resources.”…
The mayor’s press office did not respond to a request for comments on the administration’s plans for evaluating the array of city tax breaks.
Always remember: Only the little people pay taxes.
This must be why it has been extremely hard for NYCFC to secure a spot in the city