Tuesday, December 9, 2008

Same Dog, Old Tricks

The New York Yankees are at it again. In the middle of a national financial crisis, the richest franchise in sports is leaning on taxpayers to foot more of the bill for a new stadium that has already cost $1.3 billion. I still haven't figured out why--at the same time the Boston Red Sox have found ways to make Fenway Park last a few more decades--the Yankees found it so imperative to tear down the shrine-like Yankee Stadium, unless it was sheer jealousy that New York City might finance a replacement for the Mets' unshrine-like Shea Stadium.

Yankee Stadium underwent a major renovation and face-lift a mere three decades ago, which in itself should have been a cautionary tale heeded by city officials when the Yankees came begging this time around. Here's the item reported today by the Associated Press:

"The Yankees and Mets are asking the city for $450 million more in public bonds to finance their new ballparks, on top of nearly $1.5 billion they were already granted, according to the city's Economic Development Corp.

The teams requested the additional financing in applications filed with the city ahead of a public hearing on the funding next month. The applications have not yet been made public, but the city shared details in response to questions from The Associated Press.

In the Yankees' application, the team is asking for another $259 million in tax-exempt bonds and $111 million in taxable bonds, on top of $940 million in tax-exempt bonds and $25 million in taxable bonds already granted for its $1.3 billion stadium. The Mets are requesting an additional $83 million, on top of $615 million already approved for their $800 million park.

The city's Industrial Development Agency must hold a hearing before granting any additional public support for the ballparks, which are expected to be completed next year. Mayor Michael Bloomberg and other city officials have long insisted that the city reaps economic and other benefits from having the private stadiums."

A few things are worth noting there. First, the new Yankees stadium was already slated to cost twice as much as the new Mets stadium, while more than 80% of the requested increase in funds would go to the Yankees. No wonder they could only afford to offer C. C. Sabathia a contract for $140 million. The entire Tampa Bay Rays roster made less last year than Derek Jeter and Alex Rodriguez combined, but it's business as usual in New York as long as the taxpayers can be suckered into paying the bill. It is telling that the mayor cites "other benefits" as a key justification for allocating public money to subsidize one of the city's most affluent tenants. It is an old trick, in fact the same trick pulled by Major John Lindsey back in the 1970s when the city conned its citizens into paying four times what they thought they were going to pay for the renovation of Yankee Stadium.

That story is told, in bits and pieces, in my book "This BAD Day in Yankees History." Here are the relevant items as detailed in the book:

APRIL 5, 1973: WARNING SIGNS: The renovation costs for Yankee Stadium have risen to $27.9 million. This is just the first of many announcements which ultimately raise the original estimate of $24 million to nearly $100 million by the time the job is done.

Quote of the Day: City Council President Sanford Garelik, after Mayor Lindsey says the cost increase is "routine": "The Mayor's casual admission defies belief. . .The total stadium cost may well come in at twice the $24-million cost of Shea Stadium." Make that four times as much.

NOVEMBER 9, 1973: FUZZY THINKING: The Yankees, exiled to Shea Stadium for two years while Yankee Stadium is renovated, request that they be charged only $1 per year in rent. The city is already undertaking the $24 million renovation that will ultimately cost four times that, and the Yankees will pocket parking revenues at Shea, but they still don't want to pay rent.

NOVEMBER 14, 1973: URBAN SHOCKER: The City Planning Commissioner approves an additional $15.9 million funding of the Yankee Stadium renovation, bringing the current cost for the project to $49.9 million. That’s already more than twice the figure announced by mayor John Lindsay when he approved the project. Of course, when Lindsay made the deal he already knew it was going to cost over $30 million, but he said $24 million because that was what the city spent on Shea Stadium. When today’s funding is announced, there’s a report on Lindsay’s desk from the Economic Development Administration saying that the cost will rise to $80 million. Confused? Join the crowd, as New Yorkers wonder why school repairs are being neglected while all this money is poured into a project to benefit CBS, the huge corporation which owns the Yankees. Mayor-elect Abraham Beame’s figure is $53 million. You can double that figure, too, as the renovation’s price-tag ultimately skyrockets to over $100 million. In other words, the whole project was a scam and a mess. By the time the refurbished stadium opened in 1976, New York City was broke. But at least the Yankees didn’t move to New Jersey.
Quote of the Day: Mayor Lindsay’s callous and prophetic statement when the deal was announced: “By the time I retire, the stadium will be gutted and the project so far down the road it will be impossible to reverse it.”

NOVEMBER 16, 1973: Quote of the Day: Brooklyn Borough President Sebastian Leone, after New York City's Board of Estimate approves $15.9 million in additional funding for the Yankee Stadium renovation: "We are caught in a sucker's game." No kidding.

DECEMBER 3, 1975: RED SMITH EXPLAINS IT ALL: Incomparable columnist Red Smith explains the skyrocketing cost of the Yankee Stadium renovation (current estimated cost of $75 million, marked up from the original figure of $24 million): “You [the Yankees] figure the Board of Estimate wouldn’t hold still for an expenditure of more than, say, $25 million so you call in an expert and tell him: ‘Give us an estimate of about $20 million or so. We’ll add $3 million as the purchase price and stay under the limit easily.’ The Board of Estimate gives the O.K. . .Now the city is committed. You let a decent interval elapse and then say, ‘By the way, the figure is $46 million now.’ After that it’s a million here and a million there and it just sort of piles up.” He suggests that while they’re at it, the city ought to start paying Catfish Hunter’s salary, too.

APRIL 14, 1976: NO USE PRETENDING ANY MORE: City Officials finally concede that the cost of renovating Yankee Stadium might reach $100 million, a scandalous figure considering that the 80,000-seat stadium just opened in Pontiac, Michigan took only $55 million to build from the ground up.

MARCH 18, 1978: A LOOPHOLE THEY DROVE A BUS THROUGH: The Yankees take advantage of a clause in their lease agreement with New York City to avoid paying their rent. Their revenue the past two years was over $20 million, and the lease calls for their rent to rise in proportion to revenue. However, another clause allows them to deduct “maintenance” costs from the rent rather than from the pre-rent revenue, and reported costs of more than $1.6 million over those two years negate nearly every dollar of rent due. City Comptroller Harrison Goldin calls the lease “a disgraceful deal for the city.”

DECEMBER 12, 1980: THEY BROKE IT--WE BOUGHT IT: New York City releases a report on the $100 million 1974-1976 renovation of Yankee Stadium charging that faulty design and hasty work have already caused water leaks and cracked concrete in the Stadium. It will cost at least another $2 million to fix the problems, though the immediate priority is pointing fingers. Parks Commissioner Gordon Davis says, “The city paid an awful lot of money for the Stadium work and we shouldn’t have gotten a broken Stadium.”
Quote of the Day: Edward Simpson, president of the company that did the Stadium's construction work: "The design engineers recommended a change and the city didn't accept it because theyw ere concerned about cost and time. They got what they paid for."

That's the legacy of that sham, "a broken stadium" that cost $100 million and lasted less than one-third as long as a Boston stadium that was once regarded as decrepit. It makes you wonder what those dummies over in Detroit were doing, forgetting to fleece the electorate while building a new stadium for just over half as much. Of course, the Pontiac Silverdome hasn't hosted professional football since 2001, about the same time that new New York mayor Michael Blomberg (who by the way could pay for both new ballparks out of his own pocket without feeling the pinch) okayed the public financing of two new ballparks after his predecessor, fellow Yankees fanatic Rudy Giuliani, balked at the massive project in the wake of the World Trade Center tragedy.

Bloomberg will get what the rest of us are paying for, and then some, having insisted on a free luxury suite at the new Stadium. Here's the disclosure reported a week ago:

"In his ongoing investigation into the Yankees' new baseball stadium, New York Assemblyman Richard Brodsky uncovered e-mail messages sent by Mayor Michael Bloomberg's top aides that show an aggressive bid for a free luxury suite at taxpayer expense, the New York Daily News reported. E-mail requested under the New York Freedom of Information Law show the aides spent months demanding the luxury skybox and free food before finally reaching a compromise with Yankee leadership in which the city would give the team 250 free parking spaces. The $820,000 value of the spaces could hurt taxpayers if the Yankees' garage owner cannot make his $3.2 million annual rent, according to the Daily News. The Yankees asked the city to request tax-exempt funding from the Internal Revenue Service in an effort to save $247 million in borrowing costs, the Daily News reported. The city agreed, but in exchange wanted the skybox and 180 of the best seats to be bought at cost. When the Yankees scoffed at the suggestion, city lawyer Joseph Gunn reportedly threatened to withhold the city's tax-exempt backing if the suite was denied."

Good luck, Mr. Brodsky. If the non-gazillionaire Rays could do it, maybe you can, too.


MIke Piazzi said...

The Yankees needing public assistance to build the Stadium yet being able to sign CC and AJ for 240 million is like the Big 3 auto makers flying to DC on private jets to beg for money while crying poverty, in my opinion.
Another early morning post, Gabriel. Do you ever sleep?

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