The Yankees want the city to sell $350 million more in tax-free bonds so they can finish their new stadium, officials said tonight.
And state Assemblyman Richard Brodsky (D-Westchester), whose committee investigates public-debt projects, said the team sounded as if it would pull the plug on the new Yankee Stadium if the bonding didn’t come through.
“I was told authoritatively they needed the money to complete the project, and the Yankees said they couldn’t complete the Stadium without additional financing,” Brodsky said.
“Now the Yankees dispute that’s what they said to the city.”
Team President Randy Levine said Wednesday night, “At some point, as stated and contemplated in the original transaction, the Yankees will seek additional bonding.”
But he insisted, “This issue does not affect completion of the Stadium.”
In a worse-case scenario, the Yanks could seek taxable financing, as opposed to tax-free bonds to complete the project.
More than $500 million in tax-free bonds have used to build the Mets’ Citi Field stadium in Queens.
The $350 million in nontaxable bonds for the Yanks would come on top of about $900 million in bonds – most of it tax-free – granted initially.
“This isn’t the biggest issue for the Yankees and Mets. It’s a much bigger issue for the Nets and other development projects that haven’t secured any financing yet,” said a source.
Seth Pinsky, president of the city’s Economic Development Corp., said the Yankees’ wish for nontaxable financing doesn’t make it a done deal.
“The Yankees have expressed to us an interest in receiving additional financing,” he said.
But he noted the IRS would have to reverse a regulation prohibiting more public debt from being incurred for the ballpark.
If the IRS signs off, “we would be willing to consider the option,” Pinsky said.
He added that the city and state are working in Washington “to seek relief from the IRS regulation that prohibits [more] public financing” for private projects.
“It’s taken away an important tool that would be useful for a number of key economic-development projects for the city – not just Yankee Stadium,” he said.
Brodsky groused that such “enormously important” decisions on public financing “ought to be made by public officials – and instead, it’s being done in secret.”
Bettina Damiani, director of Good Jobs New York, said an IRS reversal “would be opening the floodgates. It defies all fiscal common sense to subsidize wealthy sports teams.”
The new ballpark is expected to open in 2009.
With Reuters, AP