Archive for the ‘Stadiums’ Category

The Citi that Never Sleeps but Still Dreams of Taxpayer Money

November 26, 2008

metscomic3This week news broke that Citigroup will be the latest entry in the growing list of financial companies to receive huge infusions of federal tax dollars. But the bank is used to having money of others to keep it warm at night. As colleague Phil Mattera notes in Dirt Diggers Digest, the Fed’s guarantee of over $300 billion in Citigroup assets, along with a $20 billion direct cash infusion, demonstrates only the most recent example of the company’s tendency to get into trouble that requires a bailout. Add Uncle Sam to the list of 19th century tycoon John Jacob Astor, a modern Saudi Prince, and the government of Abu Dhabi, who have all previously provided financial aid.

But Citigroup’s search for outside assistance has happened in good times as well as bad. Even when the company was raking in billions in profits, it relentlessly sought, and often received, state and local tax breaks without providing any benefits in return.

Last year, Good Jobs New York and New Jersey Policy Perspective released a report examining Citigroup’s systematic use of relocation threats to play localities against one another so the bank could extract hundreds of millions in state and local subsidies. In Pay or We (Might) Go: How Citigroup Games the States and Cities, we examined Citigroup subsidies in New York and New Jersey, Kentucky and Texas between 1989 and 2007, and discovered the company benefited from almost $300 million in public funds in those four states alone. In virtually every move Citigroup made, it sought taxpayer help in footing its bill, often by threatening to move jobs elsewhere.

So what then did these localities get in return for its investment in Citigroup? Here’s a telling example: Two years after the company (then Citicorp) received $90 million in New York City subsidies for its tower in Queens, it eliminated 500 jobs. And a few years after that, it decided to move hundreds of its New York City employees to Hillsborough County in Florida. New York will be hit (hard) again when the company lays off 52,000 jobs globally. Yet Citi is still trying to bolster its image by maintaining its $400 million plan to purchase naming rights for the new Mets “Citi Field” stadium.

Considering Citigroup’s demand for public money without providing benefits, there may be extra reason to worry about the returns federal taxpayers will see from their unprecedented investment.

Feds’ Proposal Would Cut Transparency on Tax-Exempt Bonds

November 12, 2008

backward_clock

The Bush Administration is coming to a close, but it’s not asleep. With eyebrow-raising timing, the Internal Revenue Service (IRS) recently proposed changes, that would lessen the public approval and transparency requirements states and localities have to follow when they issue tax-exempt bonds for economic development projects.

Under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, and subsequently the Tax Reform Act of 1986, all localities must hold a public hearing before issuing triple (local, state and federal) tax-free bonds for private-sector projects. Those eligible for these bonds, which carry below-market interest rates, include some manufacturers (through Industrial Revenue Bonds), housing developers, nonprofit organizations (including hospitals), among others. We’ve even seen a few financial firms benefit in New York City, mostly under the post-9/11 Liberty Bond Program, and we’ve seen Wal-Marts across the country receive tax-free bonds. [This paragraph was updated on 1/23/09]

Cutting back these so-called “TEFRA requirements” would diminish the ability of community groups, labor unions, tax & budget advocates and individual taxpayers to question the use of tax-exempt bonds. Good Jobs New York has successfully used the TEFRA process to expose the questionable labor practices of some proposed bond recipients and to highlight inequitable and irresponsible proposals – like using post-9/11 Liberty Bonds for luxury housing, and issuing tax-free bonds to build the new Yankee and Mets Stadiums.

The IRS’ proposed changes would:

1) Decrease from two weeks to one the amount of time the public has to research a project and prepare testimony in support or opposition.

2) Allow localities to proceed with no hearing at all if there are no “timely requests” to participate.

3) Limit the information now made publicly available prior to a hearing by allowing for more general project descriptions.

Before the IRS can change the TEFRA public approval process, it is itself subject to a public approval process. You can tell the IRS not to diminish your community’s voice by submitting testimony before December 8, 2008. There will be a hearing at the IRS on January 26, 2009, but you’ve got to submit written comments first.

More information about the proposed changes and how to comment are HERE.

Good Jobs New York encourages you to contact us with any questions or to let us know if you are interested in submitting comments.

Check Please! Yankees Forced to Pay $11 Million After GJNY Inspired Audit

November 7, 2008

crystalToday, New York City taxpayers finally got some Bronx cheer after an investigation by the office of City Comptroller William Thompson sent an $11 million tab to the New York Yankees.

A little over a year ago, Good Jobs New York’s staff hunkered down at the office of the New York City Department of Parks and Recreation with Field of Schemes’ co-author Neil deMause to sift through boxes of receipts submitted by the Yankees as part of an agreement started under former Mayor Giuliani that permits the team to deduct “planning expenses” for the new stadium from the rent it pays to the city.

The findings were extraordinary: receipts for gifts of crystal baseballs, steak dinners, bar tabs, baseball caps, “gifts for Japan” and one of my favorites, a $76 bill for shipping batting helmets to Tropicana Field in Florida. We urged Comptroller Thompson to conduct an audit of these expenses which we thought was long overdue.

Thompson’s office came through. After reviewing documents submitted between 2003 and 2006 the auditors found several blunders akin to crystal baseballs including receipts for: $34,328 in travel expenses to other stadiums, donating $50,000 to a Political Action Committee and $359,617 in bonuses to the staff of the stadium’s developer. The Comptroller also found $1.8 million in overstated deductions for MLB revenue sharing as the team used a method not agreed to in the lease. And in what could be considered the definition of chutzpah, the team submitted receipts for 2006 expenses, even though the city let them to take two years worth of the annual $5 million credits in 2005.

The Yankees have so far paid the city $7 million along with $600,000 in interest. A little more than $4 million is still due by March 2009.   Considering the news of a possible “headcount reduction” at the NYPD and higher taxes on the city’s middle class, let’s hope the Yankees don’t take six years to pay the rest of the rent.

The Grey Lady Wakes up to the New Yankee and Mets Stadiums

November 6, 2008

stadium6001

Yesterday, The New York Times ran a lengthy article about the mounting public costs of New York City’s two rising baseball stadiums. Good Jobs New York has been meticulously tracking these subsidies for over three years.

The article documents the increase in tax breaks for the Yankees and Mets new homes from the $281 million announced in 2005 to $458 million today. The article also takes Mayor Bloomberg to task for his flip-flopping comments on subsidies for stadiums.

While reporters at other New York daily papers, Patrick Arden at Metro and Juan Gonzalez at the Daily News specifically, have devoted space and research to the ever expanding subsidies and seizing of 22 acres of park space for Yankee Stadium, this is The New York Times‘ baseball stadium subsidy coming out party, so to speak.

While the city stands by the project claiming $40 million in new revenues over 40 years, the article is chock full of counter arguments from economists claiming that sport arenas don’t drive economic development.

Most interesting of the experts cited is Andrew Zimbalist. Zimbalist is an economist from Smith College who has written positively about New York City’s stadium projects but throws a bit of a curve ball in The Times piece. He rebuffs a claim that the Hard Rock Café and N.Y.Y. Steak restaurants at the new Yankee Stadium will bring much more business to the area saying, “it’s hard to imagine” they would provide many benefits during the off season, because it “would require a tremendous renaissance in that part of the Bronx.”  

All New Yorkers, not just economists, should pay attention to this evolving project since the Yankees and Mets are expected to apply for additional public financing (GJNY will forward details of the public hearing when it is announced) just as news of tax increases on the middle class and cuts in critical services are being proposed.

“Gaming the Tax Code” Hearing Yields No Winners

October 28, 2008

It didn’t break through the coverage of the presidential election or the meltdown of our financial system, but corporate welfare was center stage at the Capitol last Friday.

In his fourth Congressional hearing into the economic benefits – or lack thereof – of taxpayer-subsidized stadiums, Rep. Dennis Kucinich (D-Ohio) summoned to Washington the masterminds of America’s most expensive stadium: the Yankees’ new palace going up in the South Bronx. There was Randy Levine, President of the Yankees; Seth Pinksy, President of the New York City Economic Development Corporation; Martha Stark, Commissioner of the New York City Department of Finance defending the project. Also testifying was Assembly Member Richard Brodsky who as Chairman of the state’s Assembly Committee on Corporations, Commissions and Authorities is conducting an investigation into the use of public financing for the project.

If attendees (yours truly sat in)  and web watchers (see www.fieldofschemes.com and www.atlanticyardsreport for the play by play) expected the hearing to clarify how the Yankees project  – considered by many the murkiest deal in recent New York history – got a bundle of bond financing, they came away disappointed. (more…)

CBA Moves Forward in Pittsburgh

October 1, 2008

Pittsburgh has joined the list of cities with community benefits agreements. The plan is moving forward after the Pittsburgh City Council gave its blessing to the agreement, which was signed by several public entities as well as community groups and a private company. The One Hill CBA Coalition negotiated the deal with the owners of Pittsburgh Penguins hockey team, as well as the City of Pittsburgh, AlleghenyCounty and the county Sports and Exhibition Authority. The $750 million project includes a new arena for the Penguins and redevelopment of the arena where the team currently plays.

The One Hill CBA Coalition was formed in April 2007 when city and county officially agreed to subsidize a new arena for the team in the city’s Hill District. The Coalition consists of 97 community groups, church groups, small businesses and historic preservation groups. Carl Redwood, Jr., Chairman of the Coalition, told me he wanted to make sure the development was beneficial to Hill residents: “We needed to determine our community’s future and development projects that fit into our plan.”

Pittsburgh UNITED, a chapter of the Partnership for Working Families, played a crucial role in the coalition’s success by mobilizing allies from around the city. For instance, the group organized a bus tour for progressive allies and for members of the media to show them areas of the Hill that would benefit from a CBA. Ultimately, the media started talking about the importance of family-sustaining jobs, community involvement and giving workers freedom to organize.

Local elected officials and the owners of the Penguins were originally resistant to the idea of a signed CBA. After months of public actions and press coverage, the Penguins and the elected officials had no choice but to bargain with One Hill. Subsequently, the final negotiations involved community leaders, County Executive Dan Oronato, Mayor Luke Ravenstahl and Penguins President David Morehouse.

The CBA will involve the people who live in the Hill District in numerous ways and help to rebuild their infrastructure and economy. First, the Penguins and the city’s Urban Redevelopment Authority will each provide $1 million for a locally-owned full-service grocery store in the district. Additionally, residents will have access to a local employment center that gives district residents access to jobs created at the new arena and the redevelopment project that will pay $12 to $30 an hour. The CBA also calls for the creation of the master planning committee which sets forth development guidelines. Along with the construction of a community center for youth, families and seniors, the Hill District will also see the creation of a Neighborhood Partnership Program centered on social services for the neighborhood.

While the CBA is seen as a victory, Redwood admits that there are some people in the community who feel the agreement did not go far enough given the $290 million subsidy. Redwood emphasized the need to continue community involvement: “To have a victory like this is important but we need to build upon it.”

Legislative Umpires Call Yankees Out

September 19, 2008

The controversy around the public financing of the new Yankee Stadium heated up this week as a New York State legislator and a member of Congress put the squeeze on the team and New York City officials who helped finance the $1.3 billion stadium.

Testifying before the House Subcommittee on Domestic Policy, New York Assemblyman Richard Brodsky revealed that his summer-long investigation into the public financing of the new stadium shows that the city’s job creation figures and property tax assessments might not be up to par.  And Rep. Dennis Kucinich, chairman of the Subcommittee who has held two previous hearings on the use of tax-exempt bond financing for stadiums said:

“In the case of the new Yankee Stadium, not only have we found waste and abuse of public dollars subsidizing a project that is for the exclusive benefit of a private entity, the Yankees, but also we have discovered serious questions about the accuracy of certain representations made by the City of New York to the federal government.”

(more…)

A New Controversy at the New Yankee Stadium

July 29, 2008

If you’ve been watching the antics around the development of the new Yankee Stadium, it shouldn’t be a surprise that another controversy has taken place.

The issue being raised in recent days by Rep. Kucinich (D-Ohio) and New York Assembly Member Richard Brodsky is that city officials may have lent a helping hand to the Yankees by boosting the value of the land for the new Yankee Stadium for property tax purposes.

It appears that city assessors jacked up the value of the land under the new stadium so that the Yankees would receive nearly a billion dollars in tax free bonds. Making the land more valuable allowed more borrowing.

Juan Gonzalez of the Daily News reported yesterday that the city may have estimated the value of the stadium seven times over. He reports that one estimate stands at $275 a square foot, far from what is land is valued in the South Bronx.

Rep. Kucinich isn’t holding back and has requested documents related to assessments from the Internal Revenue Service, National Park Service (the city needed the NPS’s OK since the new stadium is being built on a park upgraded with federal funds), New York City Department of Finance, New York City Economic Development Agency (that via its Industrial Development Agency allocated $942 million in tax-free bonds) and Randy Levine, President of the New York Yankees. Kucinich’s committee expects to hold a hearing in September.

It’s worth pointing out that neither Kucinich, the Congress Member from Ohio nor Brodsky represent New York City. One can only guess why elected representatives from New York City are sitting this one out. Brodsky represents a portion of suburbs north of the city and is chair of the Committee on Corporations, Authorities and Commissions.

Media alert: I’m scheduled to appear on tomorrow’s (Wednesday’s) edition of Democracy Now! (check out your stations listings or podcast info) hosted by Juan Gonzalez about the Yankee project with others to include guests Rep. Kucinich and stadium subsidy guru Neil deMause.

Big Victories for Partnership for Working Families and Affiliates

June 19, 2008

Our friends at the Partnership for Working Families (PWF) and its affiliate organizations do amazing work. So it’s not surprising they are winning big victories – most recently in Pittsburgh and San Francisco, and hopefully another in San Jose this fall.

PWF affiliates work to ensure that low and middle income workers and communities share in the benefit of economic growth and development. Often, they campaign for community benefits agreements (CBAs) – legally binding contracts signed by developers and community coalitions that spell out a set of community benefits that the developer must provide as part of a development project.

In Pittsburgh: Pittsburgh United’s One Hill CBA Coalition, is close to winning the city’s first-ever community benefits agreement for the new Penguins hockey arena and 28 acres of surrounding land. The agreement, which has been tentatively approved by the Penguins, would require that all new jobs in the development pay living wages and provide health benefits. Neighborhood residents would be interviewed first for the new jobs. Also, the arena would have to prepare a LEED Certification Plan (the gold standard for green building).

In San Francisco: The San Francisco Labor Council, ACORN, and the San Francisco Organizing Project have entered into a CBA with housing developer Lennar for a massive redevelopment in the Bayview-Hunters Point neighborhood. Lennar has agreed to ensure that 32 percent of the housing units are affordable, provide neighborhood residents with $27 million in housing assistance and $8.5 million in job training services, require local hiring for project construction, and ensure labor peace in the project’s key industries. In exchange for these concessions, the organizations were strong advocates in support of the project on two city ballot initiatives – helping the initiatives pass on June 3rd. Now Lennar has a green light for the city’s largest redevelopment project since the 1906 earthquake.

In San Jose: Working Partnerships USA is organizing community, faith and labor leaders to support living wages for workers at the Mineta San Jose International Airport. In a recent report, Worker Partnerships found that over half of the surveyed airport employees weren’t trained in critical emergency procedures, such as facility evacuation. Paying a living wage would reduce turnover at the airport, increase the amount of long-term, skilled workers on site and consequently improve airport safety. Airport workers and community advocates spoke in support of a measure to require living wages for airport workers before the San Jose City Council’s Transportation and Environment Committee on June 2nd. Worker Partnerships is hopes to win an airport living wage ordinance this fall.

New Yorkers Say ‘Enough!’ to Stadium Subsidies

June 18, 2008

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.