Fed up with public funding going to stadiums instead of services that benefit the whole city, a coalition of good government, park advocacy and community groups sent an open letter yesterday to the New York City Congressional delegation. The letter demands they ask the Internal Revenue Service and the Treasury Department to help close a loophole discovered by local officials that allows federal subsidies (in the form of tax-exempt bonds) for sports facilities, which are normally not eligible. Another group began an e-mail campaign asking Mayor Bloomberg to refocus his priorities from stadiums to schools and other public infrastructure.

It seems the city’s attempts to use the loophole might not be so easy this time.

As we wrote last week, Assembly Member Brodsky broke the news that the New York Yankees asked the city to help them secure an additional $350 million in triple (city, state and federal) tax exempt bond financing to finish building their new stadium. The bases are loading up – last week more Assembly Members jumped on board denouncing the extra financing and calling for hearings on the matter. U.S. Congress Member Dennis Kucinich, who has previously held two hearings on stadium financing, has now written a letter to the IRS questioning their regulations.

The city’s Independent Budget Office estimated that the $350 in tax-exempt bonds would cost taxpayers approximately $83 million (that is, if the bonds were not tax exempt, governments would have collected $83 million in taxes). This comes on top of the $800 million in public financing the Yankees already received for the new stadium, plus cost overruns for parks the city promised to build to replace those that were destroyed for stadium construction.

Officials seem to be in a panic over the idea that in the future large stadiums may no longer be eligible for tax-exempt bonds. A recent New York Times story noted that the city is seeking bonds for the Nets Arena, part of the controversial Brooklyn Atlantic Yards project.

And perhaps officials should be panicking. It seems many New Yorkers have decided it’s time to turn off the stadium subsidy spigot.

This entry was posted on June 18, 2008 at 10:21 am and is filed under New York, Stadiums, Subsidies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.