Yankee Stadium, Bonds (not Barry), and Assessments

"Our assessors jacked up the numbers and the comparables for the Council to justify the stadium bonds," said a Finance Department official familiar with the project.

The Daily News has an intriguing story today about an investigation into the assessments on the land on which the new Yankee Stadium is being built.  Seems that assessments by the City of that land pegged the value at approximately $275 per square foot, pre-development.  This assessment allowed the city to float bonds for the construction of the new park, a linchpin in keeping the team in the five boroughs.  That $275 a foot is a staggering number for the South Bronx, considering that the MTA has a tentative agreement to sell land at the Hudson Yards in Manhattan for $1.05B, a project entailing 12 million developable square feet (or $87 per developable square foot) excluding the costs of a structural platform over the railyards, a cost borne by the purchasing developer.  This platform and attendant structure, estimated at approximately $166 per square foot in construction costs, pushes the developable PSF cost of the Hudson Yards project to approximately $250 per square foot, still less than the land on which the new Yankee Stadium is located.   Realize that the Hudson Yards property is one of the last large-scale pieces of empty land in Manhattan, an incredible commodity located near the transit hub of Penn Station, the Javits Center, a new extension of the 7 train, and with full views of the Hudson River and beyond.  It is, for the city (and the MTA, which is selling the land), one of the more valuable large-scale pieces of real estate to come available, and surely exceeds in value per square foot (even considering the risk and scope of the eventual construction) that of the land in the South Bronx.  The HY site requires a zoning change for the purposes of development, but given the location, the amenities, the inherent quality of the place and the importance of the project to the city such a change seems to be nearly a fait accompli.  The land in the Bronx, zoned as "Park" and not developable as commercial or residential real estate would require a similar zoning change, but the market in that area would probably not support a similar type of development to that in the Hudson Yards, a development type embodying tremendous value, thus depressing (one would think) the assessed value upon which the bond offers were based.

Further, when you consider the fact that the city is seeking an additional offering of more tax-free bonds for Yankee Stadium you have the stench of a rotten situation, where land in the South Bronx is being assessed at a number higher than some of the most prime real estate in the entire city.  Had the land at YS been assessed at a value and more in line with market for what this land would sell on the open market and under current zoning status, the city could not have offered as much in bonds, thus jeopardizing the project before it started.  This would surely have increased the chances that the Yankees would have fled for more remote climes.  In the end, if these investigations prove that the City engineered a bond offer backed by ridiculously inflated land values, the victims are us taxpayers.  If the assessment is proven to have been inflated, someone should be held accountable. 

Comments

[I'm Bill McNeal]

Are you suggesting perhaps that New York (gasp!) has learned something from Chicago?

And the vast majority of taxpayers are getting ripped off on the housing bailout package, too. The a$$holes who went nuts selling mortgages still get to line their pockets. Who needs regulations?

[IronHorse (yf)]

"someone should be held accountable"

I say it's Manny's fault.

Seriously, this will be an interesting one to follow. I wonder if there is any consideration/dispensation in the law that allows flexibility on assessments for the tax revenues expected to be gained by whatever gets developed on a site. I mean, if they were to place a huge parking garage on that site and have the Yankees move to Hoboken, the long-term costs to the taxpayers would I assume be much more then the costs borne by the taxpayers through an inflated assessment of the undeveloped land's worth. I know nothing of the law - I just wonder.

Regardless, Kucinich seems to be on something here. Although he may be hurt by his eyewitness accounts of alien-sightings during the Democratic primary race.

[Atheose]

Although he may be hurt by his eyewitness accounts of alien-sightings during the Democratic primary race.

Having his super-hot wife hanging around him raises his credibility though. I do like me some redheads.

[Lar]

Poor Kucinich. Interestingly, just the other day, I saw the Fraiser episode where something like this happened...

[YF]

This thing has been a rail-roaded boondoggle from the start. My only quibble with the post above is the apparent assumption that this bond deal kept the team in the five borough. What would have happened if the team did not get this huge carrot from the taxpayers is not something we know. Perhaps the team would have moved. Perhaps it would have found another means of financing (by paying for itself, as promised!), or reduced costs, or found some way to retrofit the current park, or some other alternative. Who knows. I've always looked at the threat to move the team from the 5 boros as more empty than real. Where it is, it is perfectly situated between its NYC, Westchester, and Jersey fanbases, on good local public transportation lines. The Stadium has been topping 4 million regularly. For all the carping about parking, that would not have been so easy to reproduce elsewhere.

[SF]

is the apparent assumption that this bond deal kept the team in the five borough

It's not an assumption, YF, that mischaracterizes what I wrote. What I wrote was a speculation that this would have been a possibility ("increased the chances" is the phrase I used, which is hardly an assumption that this would have definitively happened, I have no clue if it would have). At the least this possible exodus would have been used as a wedge to gain additional concessions (if it wasn't already, which it appears that it might have been).

[dc]

doesn't congress have something better to do, uh, like investigate spygate again, or something?...how 'bout investigating why a beer costs 12 bucks...now that's something taxpayers can appreciate...

[YF]

I didn't mean to mischaracterize what you wrote! I was simply responding to this sentence:

"This assessment allowed the city to float bonds for the construction of the new park, a linchpin in keeping the team in the five boroughs."

The implication is that the assessment was essential in retaining the team. Excuse me if I have misinterpreted.

[SF]

Ah, yeah, you're right. I was looking at a different sentence, I can see why you wrote that, my apologies for the indignance. My feeling is more in line with my other statement. I am not certain, like you, that the team would have necessarily left the boroughs, but rather that this issue would have been used as leverage to keep them there (regardless of the fact that they may have had no intent to leave).

That statement of mine that you quote wasn't written properly.