Today’s Hearing on Proposed Issuance of $515 Million Additional Yankee and Mets Stadium Tax-exempt Bonds

Here is Noticing New York’s testimony given at today’s hearing on proposed issuance of $515 million additional tax-exempt bonds to finance the Yankee and Mets Stadiums.

Additional observations about the hearing follow afterward.

We would like to have provided lengthier, more thorough testimony. What is provided below is much less than ten minutes of testimony and much closer to three. As it was, there was a question as to whether we would be required to terminate our remarks before completion. We were able to complete oral delivery of the written testimony below which we also handed in.

Noticing New York’s Hearing Testimony

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January 15, 2009


New York City
Industrial Development Agency
110 William Street
New York, New York 10038


Re: Today’s hearing on proposed issuance of $515 million additional tax-exempt bonds to finance the Yankee and Mets Stadiums.

Dear IDA:

This testimony is presented in the name of Noticing New York, which addresses itself to issues of what is good public policy and planning critical to New York development issues.

Our testimony must, in large part, address the very legitimacy of this hearing.

1. We submit to you that this hearing does not meet met the minimum statutory requirements for validity since the required ten day notice was not actually given.

2. The presupposed purpose of any hearing should be to actually hear, listen to, consider, evaluate and take into account any testimony presented at that hearing, but the fact that the vote on this matter is scheduled for just one day later clearly shows that the IDA has already decided what it wants to do, that this hearing is perfunctory and that there is no intent to actually “hear” or consider what is said here.

3. If this hearing was intended to engender honest evaluation of the cost-benefit of issuing additional bonds, the IDA and Mayor Bloomberg would not be obfuscating and misinforming the public about those costs and benefits. For example, information made available would clearly have specified what possible benefit there might be to issuing additional bonds (we think there is none) rather than conflating this with arguments about the benefit of having already issued the original bonds. For example, the Mayor and the IDA mislead the public to believe that costs would only be borne by the federal government and not by the state and city.

4. We question why the IDA provided such cost-benefit information as it did only at the last possible moment. It is only last night that we were able to learn that the city’s Independent Budget Office’s current estimate that the cost of Yankee Stadium now being picked up by the taxpayers is $854.7 million. For the Mets, the IBO calculated cost to the public is now $371.5 million. But that is without even counting the fact that neither team will be paying property taxes.

5. We don’t understand why the IBO, Mayor Bloomberg or anyone else would exclude real property taxes not being paid to the city as a cost to the public of these projects unless we are talking about the portion of those taxes under PILOT agreement, (the R-TIFC-PILOT agreement) which actually represent fake taxes due to a consciously and illegally contrived overvaluation tax assessment of the Yankee Stadium property. We do not know why anyone would consider buying the proposed additional Yankee Stadium bonds since this manipulated overvaluation makes those bonds taxable (as bonds now outstanding are also likely to be taxable too).

6. Clearly, the IDA’s and the Mayor’s focus in negotiating these transactions has been misplaced as exemplified by the documented pursuit of a luxury suite (plus food) for city officials at exorbitant cost to the public. Relinquishment of the luxury suite has not made those costs go away. If anything the full price paid for by the public has been underestimated.

7. The stadiums have already been built. Issuance of additional bonds will not change this nor whether the baseball teams involved would ever threaten to leave either pretextually or for real. Financing additional luxuries at the stadiums induces no additional public benefit. It is only a way heap more financial benefit on those already flush with benefit. If there is any value to building these things they can and will be built by the teams themselves at their own expense rather than the public. In other words, paid for the old-fashioned way. That is what can and should happen.

8. When we were preparing this testimony the IDA could not inform us, even a day before the hearing, how long we would be afforded to speak. We noted that the federal regulations for hearing on federal tax-exempt private activity bonds require that each speaker be afforded at least ten minutes speaking time. Despite a number of efforts, we could find no one at the IDA to tell us how long we would be permitted to speak.

Attached* is Noticing New York’s most recently published comment on the IDA’s issuance of these bonds. For greater depth, that piece refers and links to other previous commentary.

* (Tuesday, January 13, 2009, Another Lulu: Revisiting the Yankee and Mets Stadium Scams)


Sincerely,


Michael D. D. White

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Observations on the Hearing

The hearing, scheduled to begin at 10:00 AM, lasted almost three and half hours, ending just before 1:30. It was reasonably well attended.

We observed that, with perhaps only a few oddball exceptions, most of the speakers fell into one of the following categories:

1. Good government organizations and citizens who had scrutinized the relevant issues and were speaking quite universally against the issuance of the additional bonds.

2. Small, little-known groups or organizations that might be characterized to be, in one way or another, on the dole. Often they had fairly incidental connections to the stadiums and surprisingly little obvious reason to have gotten themselves out on a snowy day to testify about giving the stadiums extra money. Research into whether these organizations are receiving money from the city (or, for instance, its school system), from the Mayor’s Fund operated out of City Hall or from Bloomberg, LP would be worthwhile, especially given what was reported about the mayor previously using funding he controls in an arm-twisting fashion to generate favorable testimony for the term limits extension he wanted. (See: Monday, October 20, 2008, “Charity?” We Begin to Groan.)

3. Organizations that had been the object of Yankee organization marketing initiatives, sometimes including some small-scale donations from the Yankees. One observer at the hearing commented how oblivious these groups seemed to how little they were getting compared to what the Yankees are getting. The observer likened it to the image of someone standing blithely on a twenty dollar bill while bending over to pick up a penny.

4. A few local politicians who signed onto the stadium deals (apparently come hell or high water).

5. The dependable construction workers and their relatives in the construction industry. As usual, there sure were a lot of them. They just don’t seem to get it, that when they are uncritically and automatically available for rent as stage props by wealthy people seeking to fleece the taxpayer, their opinions no longer mean anything. We wish they were reading the writings of Gregory A. Butler, a union carpenter who analyzes what kind of sense this doesn’t make. (See: Tuesday, January 06, 2009, Militant union carpenter: unions shouldn't compromise with contractors or support Atlantic Yards.) Not only can bussed-in construction workers routinely be counted upon to support bad public policy that hurts the public; this often means that those construction workers support projects using public resources so poorly that fewer rather than more union jobs are created than might be with alternatives.

Sports Team Rah-Rah

Most of those who spoke in favor of piling additional money on the stadium owners spoke in a very rah-rah superficial fashion. It was on the order of letting us know that if the Yankees are playing a game they are out there rooting for them because the Yankees are the home team that they always root for. This seemed to translate seamlessly into thinking that if the Yankees are playing a game of tax loopholes, they are rooting for them to win that game as well even if it means the public loses. Some of it was oxymoronic. One speaker praised the Yankees for being so loyal to the Bronx that they never left, but argued that we need to give them money or else they might, in fact, leave.

Some Better Testimony

On the logical, thoughtful side there was some good testimony opposing the issuance of the bonds. Without meaning to slight anyone not mentioned (we were not in the room continuosly), we recommend the following available (or coming) on the Good Jobs New York web site:

1. The testimony of Good Jobs New York with their most recent analysis of the figures. Current documentation shows that only perhaps 57 additional permanent jobs are being created by the $854.7 million in public subsidy (exclusive of the real property taxes not being paid) that the IDA seeks to direct to Yankee Stadium. There are also part-time jobs like ticket sellers and takers for the relatively few days a year the stadium is used.

2. The testimony of Dan Steinberg, a doctoral student in urban planning at Columbia University, who has worked as a researcher at Good Jobs New York and an aide to Liz Krueger. This testimony among other things focuses on the “covert legislative maneuver” that was sued to “seize parkland without a hearing or without notifying the local community board.”

3. Testimony consisting of a letter from Sustainable South Bronx that was signed onto by a score of other like-minded community organizations

Representative of the Community?

Not necessarily in the category of any of the above, we thought the following was interesting. One speaker got up to announce that she was the Chairman of the Bronx Community Board 4 and that she supported the issuance of the additional bonds without even noting that she was only there to so testify by virtue of Bronx Borough President, Adolfo Carrión Jr.’s wholesale purge from Community Board 4 of those citizens, (including its chairman- and some individuals at the hearing) who had previously voted against the stadium’s financing. Out of the 19 members whose terms were up, only five were allowed to remain. (See: Markowitz to Purge Community Board 6 over Atlantic Yards Votes, by Phil DePaolo, May 21, 2007.) Mr. Carrión said:

"My very clear expectation is that these appointees are there to carry out a vision for the borough president and the leadership of this borough, and that's simply what I expect," -Adolfo Carrion, NEW YORK DAILY NEWS June 21 2006

Mr. Carrión’s carrying out of his vision apparently did not extend to an effectively negotiated community benefits agreement actually delivering benefits in a timely manner. See: Stadium Goes Up, but Bronx Still Seeks Benefits, by Timothy Williams, January 7, 2008 and Time and Cost Rise for Yankee Stadium Parks, by Timothy Williams, May 25, 2008. (This, of course, we should note, raises concerns about how suitably qualified Mr. Carrión is as Mr. Obama’s pick to head the newly created White House Office of Urban Policy. (See: New Yorkers, Real or Nearly So, Taking On New Positions in Washington, by Sam Roberts, December 21, 2008)

In fact, we note the testimony at the hearing that it was only just a month ago, in December, that efforts got underway to fulfill community benefits agreement obligations. That is when, according to testimony given at the hearing, that Yankees President Randy Levine and Brian Smith first met with those drafted to represent the community to oversee distribution of community benefit funds and Yankee tickets. When those efforts were finally launched, it should probably have been considered a sign that this new request for additional funds was in the works. (That plus the mayor running around misinforming that the stadium give-aways were costless to the local public: (Wednesday, December 17, 2008, Who Gets Clipped? Bloomberg Radio Clip on Stadium Financing and Monday, December 15, 2008, Stadium Finance: Mayor, Professing to Know Numbers, Should Know He Can’t Have It Both Ways (Unless He’s Keeping Two Sets of Books))

The Times Editorial Page Weighs In

We were somewhat startled to see the Times editorial page weigh in today on the issue of the vote scheduled for this Friday. The Times has called for any vote on the issue to be postponed. (See: Editorial: Whatever Yankees Want.) We are not used to the Times editorial page venturing a responsible lead on these kinds of city issues, but here they do. This then seems to fall into the category of the Times having to call for good behavior from Mayor Bloomberg, after having already unleashed him with their ill-considered term limits extension endorsement editorials, something we have written about before. (See: Saturday, November 15, 2008, The Mayor, The Times’ Timing, and a Proper Ordering.)

The Yankees promise over 6,000 construction jobs. But once their new house is built, there could be as few as 22 full-time, year-round positions.

What makes this latest request feel like “icing on the cake,” as Assemblyman Richard Brodsky puts it, is that the rest of the city is staring at such hard times and a looming $1.5 billion budget deficit.

Mayor Bloomberg has — rightly — had to cut city budgets and increase property taxes and explain to residents how times are bad and how we all will have to share the pain. It is time for Mr. Bloomberg to make that same pitch to the Yankees.

Now all we need is for the Times to get similarly responsible on a bunch of other city development issues. The first priority for their next move? They should take up the issues that affect Forest City Ratner, their real estate partner: the Atlantic Yards megadevelopment.