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Home Ballpark Facility News Cost of New Yankee Stadium Rises Sharply

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Cost of New Yankee Stadium Rises Sharply PDF Print E-mail
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Written by Maury Brown   
Friday, 20 July 2007 01:06
New Yankee Stadium

Taxpayer subsidies for New Yankee Stadium have risen $217 million more than first anticipated, according to a report issued by Good Jobs New York, a nonpartisan group.

With the increase, the total cost to the public is now $617 million. That figure is the amount of tax subsidy in today’s dollars, but will increase over time with inflation. As reported by Reuters:

Some $69 million of this rise stems from a decision by the city's Independent Budget Office to hike its estimate of how much tax revenue the city, state and federal government lost by letting the Yankees sell tax-free stadium bonds. The IBO said it took this step after the civic group questioned its figure.

The latest estimate also includes almost $90 million of city and state funds for a new Metro-North station for the stadium. Good Jobs New York applauded this expenditure because it will encourage mass transit.

The report cites former Mayor Rudolph Giuliani and Mayor Michael Bloomberg for the increase in costs. In the case of Giuliani, his firm, Giuliani Security and Safety, was hired as the stadium security consultant court papers show. He also approved a $21 million reduction in rent that the Yankees will have to pay.

"Public faith in government is eroded when private corporations hire former government officials and use their expertise and influence to evade participatory planning and established economic development principles," Good Jobs New York’s report said.

(See high-resolution renderings of the New Yankee Stadium design)

Select Read More to see the Executive Summary by Good Jobs New York, as well as a link to their report 

Executive Summary

To seize public parklands, win rapid permitting, and land massive taxpayer subsidies for their new stadium in the South Bronx, the New York Yankees hired numerous former public officials and benefited from the actions of a few current elected officials to play insider baseball, shutting out Bronx residents and New York City taxpayers. 

In a secretive, undemocratic process that climaxed in a lightning series of events in June 2005, these past and present officials helped the Yankees seize 22 acres of heavily used public parks and win development subsidies exceeding half a billion dollars.  City municipal records, lobbying declarations, legal documents, project plans and corporate filings reveal that the heavy hitters include:

  • Former Mayor Rudolph Giuliani, who approved millions of dollars in subsidies to the team including a $21 million rent reduction and whose firm, Giuliani Security and Safety, is listed in court documents as a security consultant for the stadium;
  • Randy Levine, former Commissioner of the Office of Labor Relations and then Deputy Mayor for Economic Development under Mayor Giuliani, and now President of the Yankee organization;
  • Roberto Ramirez, former Bronx Assembly Member and Bronx County Democratic Chair and now of the Mirram Group, who reported lobbying his former colleagues on behalf of the Yankees;
  • Stanley Schlein, a Bronx political operative since the Koch Administration, and an attorney for the Bronx Democratic Party who worked for Assembly Member Rivera while also chairing the civil service commission until Mayor Bloomberg refused to reappoint him after public concerns were raised about his conduct as a judicial appointee.

Numerous other former public servants and officials – once responsible for protecting the public treasury – now work at firms whose priority is the Yankees’ pocketbook. For example:

  • Joseph Seymour, former executive director of the Port Authority of New York and New Jersey and now senior vice president at the Community Initiatives Development Corporation (conduit for the garage financing);
  • Bruce Serchuk, a partner at the firm Nixon Peabody (a firm listed in public documents as being retained as bond counsel for both the Yankees and the New York City Industrial Development Agency) and a former senior technical reviewer at the Internal Revenue Service;
  • Howard Safir, Giuliani’s former police commissioner, now of the firm SafirRosetti, is listed in court documents as a security consultant for the project; and
  • Frank Chaney and Melanie Meyers, former officials at the New York City Department of City Planning, now work for the firm Fried, Frank, Harris, Shriver & Jacobson which was paid to lobby the Planning Commission and other agencies on behalf of the Yankees.

Together with others, revolving-door players helped the most valuable sports franchise in America score over half a billion dollars in subsidies. With no public hearings and hurried votes in both Albany and New York City, they also ensured the Yankees could abruptly seize 22 acres of Macombs Dam Park and parts of Mullaly Park, popular recreation places in the poorest Congressional district in the United States and one of New York’s highest asthma-rate neighborhoods.

The new Yankee stadium project undermined democratic planning principles and benefited the Yankee’s profit margin over the employment, recreational and public health needs of the community. Despite the opposition of the local community board and a “no” vote from the City Council member representing the neighborhood around the stadium, the project was rammed through so hurriedly that community members were only allowed to weigh in after major decisions had been made.

Providing subsidies for this project, particularly the massive parking garages that have already received $70 million of state funds, dealt a grave blow to the community’s quality of life.  The tree lined Macombs Dam and Mullaly Parks were heavily used by local residents and children from 20 schools. Today, the construction of the stadium is well underway and the former parks are occupied by cranes and bulldozers. Public officials promised interim parks (temporary open space while the replacement parks are constructed) would be opened shortly after construction began in August 2006 but they became a reality only recently.

The deal grossly violates the Bloomberg Administration’s commendable proposals for sustainable development and reduced greenhouse gas emissions as outlined in PlaNYC2030. By destroying open space and subsidizing fans to attend games by automobile (while ignoring a nearby transit station), the new stadium and its huge new garages will increase traffic in a community already plagued by auto-induced asthma.

Taxpayer subsidies for the project are still flowing: the City is offering to further subsidize thousands of stadium parking spaces on the former park lands by allocating $190 million in civic facility bonds. The IDA has held a public hearing on the garage financing but has yet to vote on the project.

Our findings do not suggest any illegal behavior or conflicts of interest.  But they do reveal a large, costly redevelopment project that was rushed through the public approval process without meaningful participation from the community or clearly defined benefits to residents and taxpayers. Public faith in government is eroded when private corporations hire former government officials and use their expertise and influence to evade participatory planning and established economic development principles

To guarantee there’s no replay of the Yankee Stadium fiasco, Good Jobs New York offers policy options to protect residents’ rights.

Honor Land Use Policies and the Community Boards

New York City has a strong democratic planning process on the books (called the Uniform Land Use Review Procedure or ULURP). It should be embraced, not gamed.

Major decisions on this project (the seizure of the park land, the types of public subsidies offered for example) were privately agreed to by the Yankees and public officials in the project’s Memorandum of Understanding (MOU)--a copy is available at http://www.goodjobsny.org/yankeestadium_mou.pdf. Agreements should not be negotiated without the consultation of the local community board and until details of proposals are made available and mandated public hearings are held.

Disclose the Revolving Door

Just as elected officials must reveal the companies or partnerships from which they receive income in financial disclosure statements, developers seeking land use approvals or development subsidies should be required to disclose in applications the names of all former government officials involved in the project (either as direct employees or as consultants or lobbyists), including their public and private positions and dates of public service.

Extend the Cooling-Off Period

To reduce the revolving-door influence problem, the City should extend to three years the time period which former elected officials and agency personnel must wait after leaving office before they can work as lobbyists or with firms involved directly on projects involving their public-sector jobs. Currently, the City’s conflict of interest law has loopholes permitting public officials to immediately go to work at firms that do business with the city. 

Scratch the Parking Garages

City and state officials should act on their stated city-wide commitment to fund public transportation as an alternative to driving. Recently officials pledged funds to build a Metro North train station near the Yankee stadium. With an estimated 10,000 fans per game choosing Metro North to get to games, the number of proposed parking spaces can be substantially cut back and park land restored.

PDF Full Report by Good Jobs New York (PDF)

 
 
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