While CC (or as I prefer to think of him, mL) Sabathia was raising eyebrows with the figure $160 million, even larger numbers were being thrown around in the stadium department the last few days:
The Yankees and Mets put in an official request to New York City for $342 million in new tax-free bonds, to help pay for additional stadium expenses (a new scoreboard and expanded concessions space for the Yanks, while the Mets haven’t itemized their list). The teams are promising to pay off the bonds, so it’s not like the city will be out the whole $342 mil; however, forgoing taxes on the bondholders would cost taxpayers more than $70 million, most of it coming out of the federal treasury. Any Bostonians wishing to express their dismay at being asked to help subsidize the Yanks’ new home with their federal taxes can submit testimony to the New York City Industrial Development Agency before its January 8 hearing on the proposed bonds.
The long-dormant Cubs plan to sell Wrigley Field to the state of Illinois was back in the news this week, as one of the counts against Illinois Gov. Rod Blagojevich is that he threatened to withhold approval of the deal unless the Cubs’ parent company fired members of its editorial board who he found distasteful. One day later, it was reported that negotiations on the deal are alive again; in its latest iteration, the complicated transaction would save the Tribune Corp. as much as $200 million in property taxes, capital gains taxes, and bond costs, while the citizens of Illinois would get “I own one-12,831,970th of the Friendly Confines” t-shirts.
The mostly dead Fremont A’s stadium plan may now be all dead, as the owner of the proposed site came out against putting a stadium there, and an alternative site near the planned Warm Springs train station turns out not to be eligible for subsidized financing. Bud Selig promptly issued a statement that A’s owner Lew Wolff was now free to consider “other communities,” which immediately sparked speculation whether he meant San Jose, until now considered sacrosanct Giants territory. While some have suggested the Nats-O’s detente as a precedent here, the Oriolesnever actually had territorial rights to D.C., so we’re treading new water here.
And CC is about a million times larger than a cc. It's a comedic comment built upon Neil' original. If the U.S. had converted to the metric system like the rest of the world, we'd all get the joke(s) right away.
I guess the big story here is how high the taxes in NY and IL are.
I take issue with the idea that failing to charge the Cubs or Yankees for borrowing money, or owning a stadium, somehow constitutes subsidizing the teams at taxpayer expense. Yes, it's an exception to the rules that are normally in place, but it isn't like the government is getting any less money than it would if the stadiums didn't exist or weren't improved. Nobody is taking money out of the government's pocket here. Indeed, NYC and the IRS will still pull in millions the renovations, as income and sales taxes are applied to the profits of the renovators.
I had the same thought - the tax break is not being paid for by the citizens, unless it is joined by a corresponding raise in their tax rates. Or - if the potential tax revenue from the stadium was already earmarked for specifc purposes, which seems unlikely. It seems like pure leveraging with no real loser, but working to make the already mega-richer that much more so.
Yes, the government is getting less money. It's not the teams that are directly getting out of paying taxes on the bonds; it's the bondholders, who don't have to pay income taxes on the money they make off the bonds. If the teams were selling taxable bonds, the bondholders would be paying taxes, so the government is giving up that money when it sells tax-free bonds.
And one of the many tax breaks NYC gave to the teams was an exception from sales tax on construction materials, so the city and state actually aren't getting that money either.
Well, if one assumes that the investors would otherwise put their money in an investment that would get taxed, then the money is lost. I have no idea whether that assumption is true.
Yankee ownership, i.e. the Steinbrenners, are acting just like the rest of the U.S. economic/political system prior to our current crash. They are spending outrageous amounts of money and The Stadium and its players assuming that the revenues will be there. It should be quite revealing to see what ticket sales and sponsorships are like this year. After all, Wall St. is in NYC and thousands of immediate and secondary jobs have been lost. I predict the beginning of the end of the Steinbrenner era due to the family's underestimation of the economic fallout of the recession and its spending levels which don't reflect what's going on in the real world outside of baseball.
Buying into these taxpayer-subsidy-dependent schemes sponsored by supposedly market loving, free enterprise Republican owners is just taking us all for suckers....hit us up to make it happen, then make us pay handsomely to use the product we helped pay for. PS I am a lifelong Yankee fan.
Buying Off the Orioles: The Deal Bud Doesn't Need to Make
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I emailed the NYC IDA through their "contact us" feature on their web site.