New York City Comptroller William C. Thompson, Jr. today issued, “The C-Note,” his periodic column focusing on economic and budget issues affecting New York City. Today’s column is titled: “Yankee Stadium Deal: A Box-Seat View of Fiscal Mismanagement.”

Earlier today, Thompson was the sole member of the Industrial Development Agency Board to vote against additional bond financing for the new Yankee Stadium because the project will inevitably cost city taxpayers hundreds of millions of dollars more than initially expected.

You can view the column by visiting www.comptroller.nyc.gov and by clicking on the ticker at the top of the home page. In earlier weeks, the Comptroller has presented his priorities to help the City weather the storm created by the current economy and provided an outline to better train our future workforce by streamlining the current outdated skills model used by the City.

THE C-NOTE: “YANKEE STADIUM DEAL: A BOX-SEAT VIEW OF FISCAL MISMANAGEMENT”

By William C. Thompson, Jr.

As a baseball fan and as a New Yorker who believes that New York City should always be at the cutting edge of development, I was among those who supported the Bloomberg Administration’s original plan to help finance the new Yankee Stadium because it showed much initial promise.

But it is now clear that the numbers originally presented to the public were grossly inaccurate and important details never came to light.

An analysis conducted by my office has found that what began as a contribution by the City of $182 million dollars has swelled to nearly $400 million dollars, more than two times the amount we were told in 2006. That amount will no doubt continue to grow.

In light of all that has been uncovered about this deal, I believe it would have been in the best interest of the city and its future to renegotiate the current terms of this deal so that the terms were fair and equitable to the people of New York City. That is why I voted against this today.

During these tough fiscal times, and in light of the incompetent management demonstrated with this project, I called on the Industrial Development Agency to postpone its vote Friday on the Yankees’ request for additional funding.
   
Not only would have a delay given us more time to bring all the facts to the public’s attention, it also would have provided the Mayor with an opportunity to finally make a deal that protects the people of New York City.

Under the current terms, the Administration is giving away the store to the Yankees and getting too little in return.  My office’s financial review has found that the City gave up much needed revenue by conceding naming rights, billboards, parking spaces and more. Construction and demolition estimates were low-balled, and there instances where necessary work was not accounted for at all.

For example, the cost of demolishing the old Yankee Stadium has more than doubled from $12 million to $27 million dollars because the administration did not consider environmental concerns the impact of proximity to the elevated subway and site safety. 

On the other hand, the Mets paid to take Shea Stadium down and didn’t use any of our tax dollars.   

Another instance is a large parking garage. Atop the garage will sit a City park originally estimated at $32.5 million. That cost is now at $44.5 million. Incredibly, my engineers have found that the water proofing between the park and the top of the garage only has a 20-year guarantee even though bonds for the parks will be paid over the next 40 years. The Administration now is requesting an additional $3.4 million in City Capital dollars to add additional waterproofing above that installed by the developer.

And possibly the most egregious example is the Administration’s deal for a luxury suite at the new Yankee Stadium. As part of its negotiations, the City agreed to give 250 parking spots to the Yankees, and is negotiating to give the Yankees the use of three billboards. The parking spots alone would bring in revenue to the City of over $500,000 per year and the billboards are reported to be worth as much as $750,000 per year.

This amounts to giving the Yankees $1.25 million dollars a year in revenue that could have gone to the people of New York City, much more than the $600,000 to $850,000 it costs to purchase a suite outright. However, recent intense public pressure has forced the administration to change course by giving up its luxury suite for cash.

Incredibly, under the new terms, a luxury suite costing taxpayers $1.25 million dollars a year will now bring in as little as $100,000 dollars a year. Even if the suite sells for the maximum price of $850,000 dollars, the City will still lose $400,000 dollars.

The City has taken a bad deal and made it worse.   

While our financial review cannot determine the Administration’s intent, it is clear that this was either incompetence or a blatant attempt to mislead the public. Either way, New Yorkers lose. 

Even in the best of times, one-sided development deals betray the principles of good government. But during these tough economic times - when we need to maintain quality services for the people of New York - every dollar is precious. Yet, the Yankees asked for more money and the Administration has agreed to give it to them despite getting too little in return.

At a time when we can least afford it, the City is bending over backwards to subsidize an enormously profitable corporation.  It is simply wrong and we must put a stop to it. The people of New York City deserve better.

###