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New York City Comptroller William C. Thompson, Jr. today issued an audit finding that the New York Yankees have continued their pattern of not paying the City all that it is owed in rental credits – this time to the tune of $67,574 – until audits expose the underpayments.

According to audits covering 2000 to 2008, the Yankees overstated their rent deductions by more than $3.7 million (see chart). According to the Department of Parks and Recreation, the Yankees have paid the agreed upon amounts following the Comptroller’s audits. Thompson’s new audit for the second quarter of calendar year 2008 found that Yankees rental credits submitted for the Second Quarter of 2008 were overstated by $67,574.61.

“Once again the Yankees overstated their rent deductions, underpaying the City the rent it’s due,” Thompson said. “The Parks Department needs to do a better job ensuring that the Yankees provide an honest account of its expenses and of the rent it owes the City.”

According to a 1972 lease agreement between the New York Yankees and the City of New York that is overseen by the Department of Parks and Recreation, the Yankees are responsible for the care and upkeep of the City-owned Yankees stadium, and must pay the City rental income. The lease also allows the Yankees to offset costs associated with maintaining the stadium. Therefore, every dollar spent and accounted for as a maintenance credit results in a dollar-for-dollar decrease in the rent due the City.  

Thompson’s audit, which can be viewed at www.comptroller.nyc.gov, examined whether the Yankees accurately calculated and documented all rental credits and did not deduct charges that are not allowed from the rent due the City for April to June 2008.

• The Yankees incorrectly deducted the following expenses from their rent payment:
  
  
• $21,662.71 in excess payroll charges and salary expenses that should have been paid by the Yankees,

$42,015.94 in Yankees Stadium repairs, which are not chargeable to the City, and

$3,895.96 in expenses that lacked documentation or are not City costs under the terms of the lease.

Thompson recommended that the Yankees:

• Deduct $67,574.61 from the total rental credits taken for maintenance pertaining to the Second Quarter of 2008, and

• Ensure that all maintenance credits claimed are properly supported by sufficient documentation, and that appropriate approvals from the Department of Parks and Recreation (Parks) are obtained prior to submitting rental credits to the Comptroller’s Office. 

Thompson also recommended that the Parks Department ensure that the Yankees comply with the report’s recommendations.

The Yankees generally make rental credit payments either by incorporating the credits in the rent payments they make annually, or by paying them at the end of each calendar year and after all four quarters of rental credit audits are completed. Therefore, the Comptroller’s Office expects that the Yankees will correct the second quarter 2008 underpayment at that time.

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