Archive for the ‘Stadiums’ Category

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Colorado Stock Show Wants Bucks to Sprawl

September 1, 2011

The location of the future Gaylord convention center complex.

The already controversial proposal to construct a massively subsidized convention center complex outside Denver has become even more divisive following an announcement by the city’s long-running National Western Stock Show that it was considering relocating to the site.

The new hotel-convention center complex in Aurora County, currently under development by Gaylord Hotels, is located near the Denver International Airport.   It is receiving up to $300 million in development subsidies via tax increment revenues from Aurora, whose City Council just approved a blight designation for the 125-acre site, now completely vacant land.  The company has also applied for a raft of state subsidies that include $170 million in sales tax rebates over a 30-year period.

Concerns that the 1,500-room complex will leach convention center and hotel business and tax revenues away from Denver are turning out to be well-founded in light of the National Western Stock Show’s announcement that it is considering a site adjacent to the new development for its annual events.  The show, which is celebrating its 106th anniversary this January, is considered a Denver institution.  (Its Centennial celebration drew 727,000 people.)   Denver voters will need to approve $150 million in general obligation bonds to finance the show’s move to Aurora.  Complicating matters further is the fact that the show benefited from $30 million worth of voter approved bonds in 1989 to upgrade its current facilities at the Denver Union Stockyards.  Under the terms of that contract, the organization is required to stay at its current address in Denver until 2040.

The stock show’s announcement has roused a series of accusations from Denver electeds that the organization is in breach of its existing bond contract.  The contract stipulated that the stock show must maintain the upkeep of its facilities, which have fallen into disrepair according to city council members.   The stock show was additionally required to submit annual reports to the city.  Stock show officials state that these were submitted annually to the city’s Theatres and Arenas Department, but this has not stopped City Auditor Dennis Gallagher from accusing the organization of failing to provide his office with financial reports.

Gallagher recently released a statement lambasting the organization:  “I refuse to see our city, our downtown business, our convention center, our historical heritage and the welfare of Denver taxpayers sold down the river because of over-arching greed.”  Other officials have reacted in kind.  City Council President Chris Nevitt accused the show of “fail[ing] to live up to [its] end of the bargain.”  The heart of the issue was best expressed by Aurora resident Shirley Ney:  “As I look at this land out there, I do not consider this land as blighted,” she said. “I think it’s very valuable land … valuable agricultural land is being eaten up by urban sprawl across this country. This proposal adds to that sprawl.”

Sadly, the wisdom of this sentiment may be lost on the National Western Stock Show, which represents an entire industry dependent on agricultural land.  The problem of subsidizing the development of greenfields is twofold.  It exacerbates the problem of sprawling growth and its associated regional costs, while simultaneously providing an unnecessary financial incentive for businesses to withdraw from the urban core.  A stampede of Denver’s urban businesses to Aurora may become unavoidable when such extravagant development subsidies are involved.

Posted in Corporate relocations, Hidden Taxpayer Costs, Job Piracy, Sales Tax, Smart Growth, Sprawl, Stadiums, Subsidies, Tax Increment Financing | Leave a Comment »

Money Losing Arenas Cause a Big Headache for Small Cities

May 27, 2011

It’s well known that big cities frequently get snookered into using taxpayer funds to build professional sports stadiums and convention centers that turn out to be financial disasters. The same thing has been happening with entertainment arenas built by smaller cities, and one company is behind many of the deals.

This was recently brought to light by the New York Times in an article about Rio Rancho, a suburb of Albuquerque, whose leaders were persuaded by the company, Global Entertainment, to build the Santa Ana Star Center a decade ago.  

The arena, to be operated by Global Entertainment, was designed to be the anchor of a new city center that would boost economic activity in Rio Rancho. Yet soon after the arena opened in 2006, it became obvious that the financial projections were wildly unrealistic.

The 6,500-seat arena turned out to be too small for big events and too big for smaller performances, and it had difficulty competing with Albuquerque’s venues. As a result of these and other problems, the facility soon began racking up heavy losses, and in 2009 the city fired Global Entertainment and sued it over unpaid bills. Arena-related costs squeezed an already tight municipal budget, forcing Rio Rancho to eliminate jobs.

The Times notes that numerous other arenas promoted by Global Entertainment have run into similar difficulties, with the company getting ousted. Yet it goes on making new deals.

When will public officials learn that entertainment and hospitality projects are usually not suitable investments for taxpayer funds?

Posted in Stadiums | Leave a Comment »

Bondholders of Yankee Stadium Garage Bonds Get Extra Innings

March 25, 2011

The April 1 deadline for the Bronx Parking Development Corporation to get its act together is no prank. Thanks to a glut of parking space at the new – subsidized to the hilt – Yankee Stadium, the parking garages, also subsidized to the hilt, have gone so unused the owners are struggling to pay its bondholders. It was widely reported that the $237 million in private activity bonds to finance the garage were going to default at the end of next week. However, today Juan Gonzalez at the Daily News reports that directors at the firm agreed to dip into its debt reserves (again) to pay the bondholders as well changes to its operations, like getting approval for expenses from an appointee chosen by the bondholders.
 
We can’t say New Yorkers didn’t see this coming.

(more…)

Posted in New York, Stadiums, Subsidies, Tax-Exempt Bonds, Transit, Yankee Stadium | Leave a Comment »

Report Documents Proof of Low-wage Employment at NYC Subsidized Projects

March 11, 2011

This week, Good Jobs New York, along with the Fiscal Policy Institute and the National Employment Law Project, released a report highlighting how New York City economic development policies often support low-wage jobs. The policy brief An Overview of Job Quality and Discretionary Economic Development Subsidies in New York City, describes the variety of subsidies and jobs at three well-known projects: Yankee Stadium, Gateway Mall in the Bronx and the Queens warehouse of Fresh Direct, an on-line grocery store.

Yesterday, the findings of the report were discussed at a forum at the City University of New York’s Graduate Center for Worker Education.

Data to estimate the wages at firms came from various sources including public records, government wage data and field interviews.

Together, the projects analyzed in the brief won tens of millions of dollars in benefits from the City, but because there are no job quality standards attached to employment at the projects, many jobs pay remarkably low wages.  Of the 4,909 jobs studied (concession food and beverage workers, warehouse workers, retail salespersons, security guards, and cashiers) the estimated annual median pay ranged from $17,534 to $26,395 for a full-time worker. Ironically this is only 58 percent to 87 percent, respectively, of the Bloomberg administration’s own 2008 poverty threshold for a four-person family in New York City. Security guards, representing about 563 of the jobs nearly 5,000 jobs studied, earned the highest wages at $12.69 an hour.

Cashiers working full-time in the retail industry (a rarity as a business that depends on part-timers) earn approximately $17,500 a year. The prevalence of low wage employment continues at the controversial, heavily subsidized new Yankee Stadium where seasonal jobs are the norm; starting wages there are estimated to be $9.19 an hour. Of the over 1,200 employees working in a Queens warehouse for Fresh Direct, the starting wage was typically the legal minimum.

Obtaining the data for the report (originally released last May and updated with new data) was a daunting task. Transparency about how discretionary subsidies are allocated has improved greatly over the years. But as the report states, the city falls flat on providing data enabling New Yorkers to determine the quality of jobs at subsidized projects.

Posted in Disclosure, Job Quality Standards, New York, Stadiums, Subsidies, Yankee Stadium | Leave a Comment »

Tough Love for California TIF

February 25, 2011

California Gov. Jerry Brown is proposing extraordinary revenue- raising plans to tackle the state’s $28 billion budget deficit.  The Brown Administration has proposed that the state dissolve the state’s community redevelopment agencies (CRAs), regional quasi-public bodies charged with administering redevelopment dollars.  Tax increment financing (TIF – the mechanism through which redevelopment is funded) is an enormous expense in California, representing $5.8 billion in diverted tax revenues a year.  The current proposal would retire current redevelopment debts with agencies’ existing funds, allowing the $1.7 billion to be applied towards the state budget.  Remaining funds would be returned to local governments and school districts.

Unlike the Enterprise Zone program, also slated for elimination by the Brown Administration, redevelopment in California actually does provide some clear benefits to the state.  TIF plays a significant role in providing affordable housing in California:  twenty percent of all TIF revenues must be set aside for affordable housing projects.  When properly harnessed, redevelopment can spur equitable revitalization.  Some of the most successful community benefits agreements in the country come from Los Angeles, where LAANE and other organizations have leveraged redevelopment funds to provide good jobs and affordable housing to underserved communities.   Madeline Janis, executive director of LAANE, Vice Chair of the Los Angeles CRA Board, and board member of Good Jobs First has argued that reform – not elimination – of CRAs is the best way to advance economic recovery in the state.

Reform would help to address the overuse of redevelopment dollars in California.  A February report by the Legislative Analyst’s Office found that CRAs in some counties have created so many projects that more than 25 percent of all property tax revenue is allocated to the agency.  One needs to look no further for examples of irresponsible use of TIF funds than San Jose and Oakland.  Both cities are scrambling to assemble and approve new subsidized professional sports stadium plans before the state can move to recapture redevelopment funds.  Cities throughout California are moving decisively to spend or otherwise encumber their accumulated redevelopment funds.

California’s $28 billion budget gap is unparalleled, but budget pressures are bringing tough love to the economic development-industrial complex around the country.  Getting back to basics is critical. Programs that pay companies to do what they would have done anyway – that fail to meet the definition of the word incentive, that don’t correct market failures – are deservedly vulnerable.  It’s only fair, given deep cuts being proposed for aid to children, seniors, students and the unemployed.

Posted in Economic Recovery, Financial Crisis, Hidden Taxpayer Costs, Jobs, Property Taxes, Stadiums, Subsidies, Tax Increment Financing | 4 Comments »

A Financial Debacle for Yankee Stadium’s Subsidized Garages

September 28, 2010

by Dan Steinberg

That Good Jobs New York accurately predicted that the parking garages at the new Yankee Stadium would be a financial debacle is of little consolation to the residents of the surrounding Bronx neighborhood, who forfeited heavily used park land so that those structures could be built with over $100 million in subsidies.

Recently, New York Daily News columnist Juan Gonzalez reported that the garage developer is on the verge of defaulting on $237 million in tax-exempt bonds issued by the city’s Industrial Development Agency (IDA).  This comes several months after Gonzalez revealed that the developers were being permitted to defer approximately $9 million in rent payments to the city.

In March 2006, Good Jobs New York joined a coalition of environmental and planning organizations in calling on legislators to eliminate the new parking garages and redirect the public funds toward construction of the new Metro-North station.  The groups criticized the city for encouraging fans to drive to the transit-accessible stadium despite the potential impacts of additional traffic congestion and pollution on the surrounding South Bronx neighborhood, which already suffers from one of the highest asthma rates in the country.

In testimony before the IDA in April 2007, Good Jobs New York also argued that the garages were a risky investment due to their high costs and the likelihood that demand for stadium parking would diminish.  Aside from the fact that the new stadium would seat 4,000 fewer fans than the “House that Ruth Built,” we contended that the new Metro-North station adjacent to the stadium would cause more fans to arrive by train rather than car.

As it turns out, about 5,000 fans per game are riding Metro-North, and many who do drive are spurning the $23 garage parking fee in favor of on-street parking or cheaper options nearby.  When you tack on the 600 free parking spaces the Yankees insisted on receiving, this all adds up to major revenue problems for the garages. In our report Insider Baseball, GJNY also exposed the garage developer, Bronx Parking, as the subsidiary of a politically connected firm with a spotty track record when it comes to publicly financed projects. The fact that it had already defaulted on two previous bonds for projects in Syracuse and Monroe County should have raised red flags among IDA board members.

At every step of the way city officials capitulated to the demands of the Yankee organization.  In doing so they set the stage for the biggest default of an IDA bond in recent memory, potentially making it more expensive to finance worthwhile projects in the future.  The garages will forever stand as a monument to the Bloomberg administration’s failure to stand up to one of the biggest bullies in town, my beloved Yankees.

Dan Steinberg, a PhD candidate in urban planning at Columbia University, formerly worked as a research analyst at Good Jobs New York.

Posted in New York, Stadiums | 1 Comment »

Opening Week Problems for New York Yankees Go Beyond Blowin’ in the Wind

April 24, 2009

accu1

There’s more going on in The Bronx at the new Yankee Stadium opening week than just the now infamous wind tunnel that’s left fans aghast. Here’s a run down of news that’s probably kept the team’s public relations staff team very busy:

 

            The City’s Economic Development Corporation released job figures for the stadium but they raised more questions than answers. For example, how many Bronx residents were hired? What are the wages and benefits? As expected, most of the new non-construction jobs are seasonal so what is the economic impact of those short-term jobs in contrast to the billion dollar subsidy price tag?

             Assembly Members Richard Brodsky and James Brennan asked the New York State Supreme Court to have the Yankees comply with a subpoena as part of the Assembly’s investigation into the $1.3 billion the team received from the New York City Industrial Development agency in tax-free financing the new stadium. It seems the subpoena is having an effect as the Yankees might have to turn over documents.

             South Bronx residents and advocates joined clamoring Yankee fans on opening day to demand officials move more quickly to replace the over 22 acres of parkland where the new stadium now sits.

             New York City Comptroller William C. Thompson, Jr. released another audit showing the Yankees owe the city $68,000 in rent. Not paying the rent is a disturbing trend for the Yankees as previous audits by Thompson show they have underestimated the rent by about $3 million since 2002.

             And finally, the already dubious economic multiplier effect of the new stadium is in serious doubt since the priciest seats are empty.  What are the restaurants, parking garages and concession stands in the stadium to do without rich fans?

Posted in Job Quality Standards, Jobs, New York, Property Taxes, Stadiums, Yankee Stadium | 1 Comment »

Questionable Projects Promoted for Stimulus Funding in New York

April 2, 2009

Atlantic Yards

Atlantic Yards

The New York State Economic Recovery and Reinvestment Cabinet has compiled a list of projects submitted by municipalities, organizations and individuals for possible funding under the American Recovery and Reinvestment Act (ARRA). While a project’s inclusion on the list does not, according to the cabinet, imply “acceptance, validation or certification of any project,” it does mean the projects may be up for consideration.

At least two of the New York City projects that appear on the list are eyebrow raising, and they demonstrate the importance of keeping millions of eyeballs on the Recovery Act: Atlantic Yards in Brooklyn, and a “South Bronx Development Initiative.”

The controversial Atlantic Yards project has already received hundreds of millions in taxpayer subsidies, and its developer, Forest City Ratner, claimed last year that the project needs more. The news that Forest City Ratner would likely seek ARRA funds broke in February, and prompted an on-line petition with almost 3,000 signatories who feel that “Any allocation of stimulus to Atlantic Yards at this point would not only further reduce the project’s already unacceptable standard of accountability, it would deprive the people of New York City investment in urgently needed public works.”

The “South Bronx Development Initiative” is a new proposal, but its priority is clearly not to serve existing local residents, considering that its major features include film studios, 4-star hotels, and luxury condos. The project also includes a shuttle to the train station near the controversial new Yankee Stadium.

While most of the projects have a requested dollar amount associated with them, these two are among the few where the listed amount is zero. It is unclear whether this means those who submitted the projects have not yet finalized an amount they want to request, that they simply are not disclosing any amount at the present time, or something else. Further complicating matters is that it is unknown who submitted these projects to the state. On his Atlantic Yards Report, Norman Oder reports he was told that a “citizen” submitted the Atlantic Yards project and that it was not an official request.

Despite this uncertainty, one thing is for sure. States are starting to compile lists and it’s up to all concerned residents and taxpayers to check them twice.

Posted in Economic Recovery, New York, Stadiums | 2 Comments »

New York Baseball Teams’ Win Is Taxpayers’ Loss

January 23, 2009

Last Friday, just one day after a heavily attended public hearing, the New York City Industrial Development Agency (IDA) approved hundreds of millions of dollars in additional tax-free bonds for new stadiums for the New York Yankees and New York Mets. Adding in the subsidies approved in 2005, this brings the total public cost of the new Yankee Stadium well above $1 billion and the Mets’ new Citifield Stadium to over $600 million.

The IDA’s approval came despite increased media attention and new opposition to the city’s deal with the Yankees. Over the past several months, the Yankees’ plea for more public assistance has been met with increasing opposition, extending well beyond those of us who have long been demanding more transparency to the public giveaways for the new Yankee Stadium project.

After receiving wide support from New York City’s daily newspapers in 2005, criticism of the project has grown among major media sources. While The New York Times had been mostly silent on the public finances of the stadium subsidies, last week its editorial board called on the city to renegotiate the Yankees deal before providing the team with more financing. And reporters who have long been critical of the project, like Juan Gonzalez of the Daily News, joined Neil deMause and Patrick Arden to continue to question the additional subsidies. Gonzalez even had extra fodder when project documents revealed that the Yankees wanted more money for improved video boards, suite upgrades and “fancy johns.”

Two New York politicians who initially voted in favor of the Yankees project also stand out: State Assembly Member Richard Brodsky, whose recent sparrings with city officials and the Yankees’ Randy Levine has garnered wide attention, and New York City Comptroller William C. Thompson, Jr. Last year, Assembly Member Brodsky joined U.S. Representative Dennis Kucinich, chair of the Domestic policy Subcommittee, in investigating the financing scheme that allowed the city to provide the Yankees with $942 million in tax-free bonds in 2006. And more recently, Comptroller Thompson, a member of the IDA’s Board of Directors, spoke out against additional subsidies for the Yankees. In deviating from standard IDA practice, where the Board unanimously approves most proposals before it, Comptroller Thompson voted against additional financing for the Yankees.

While it was refreshing to see IDA board members debate at last Friday’s meeting, it’s disconcerting to those of us concerned with transparency and accountability that the projects moved forward. One of the many reasons is that Representatives for the Yankees and Mets each made presentations during the hearing, though by the IDA’s own rules comments in favor or opposition to projects are limited to public hearings.

Despite increasing opposition to public financing for the new Yankee Stadium, the city has continued to let the Yankees play by their own rules.

Posted in New York, Stadiums, Tax-Exempt Bonds, Yankee Stadium | 1 Comment »

“Smoking Gun” found in NYS Investigation of New Yankee Stadium

December 17, 2008

smoking-gun1Juan Gonzalez of the Daily News reports today that an investigation into the public financing of the new Yankee Stadium project by Assembly Member Richard Brodsky, (Chair, Committee on Corporations, Authorities and Commissions) has uncovered emails that show City officials inflated the land value under the new stadium, allowing the team to obtain a higher amount of tax-free bond financing.

This new revelation comes into play as Brodsky and Rep. Dennis Kucinich (D-Ohio) chair of the House Domestic Policy Subcommittee have been pushing the city to release all email exchanges among city agencies on the issue. This past summer, Brodsky reported that his initial investigation suggested that the city Department of Finance boosted the value of the land from $26.8 million to $204 million. 

While it would be out of character for Brodsky to end his quest for all the documents he’s requested, this newest finding he claims is the “smoking gun”.

But don’t think this recent news would cause city officials to reconsider a new round of public financing for the Yankees or the Mets. Yesterday, the New York City Industrial Development Agency posted a public hearing notice on a proposal to give the Yankees an additional $371 million in tax exempt financing (of which $111.9 million would be federally taxable) in addition to the $942 million approved in 2006. The Mets, which got $547 million at the same time the Yankees got their financing, are requesting $82.2 million more.

In the past few months, the new Yankee Stadium project has taken more twists and turns than any time since the project was announced in 2005.  In addition to this week’s news, other emails made public recently showed that City Hall considered withholding its support for public financing if the City didn’t get a luxury suite with free food.

The news of more giveaways to rich baseball teams at a time when Gov. Paterson proposed a doomsday budget yesterday, we hope, will encourage New Yorkers to make their voices heard at next month’s IDA hearing.

Posted in Disclosure, New York, Property Taxes, Stadiums, Taxes | Leave a Comment »

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