Thursday, April 20, 2006

Sweetheart Deal for the Mets

The Independent Budget Office (IBO) just released its analysis of the proposed Shea Stadium deal. The unambiguous conclusion:

The plan for financing a new stadium for the Mets includes direct subsidies and exemptions from state and local taxes as well as access to tax-exempt bonds for building the stadium. Over a 40- year period, these subsidies and exemptions would cost the city $177 million (present value) and the state an additional $89 million. For the Mets, these benefits, including savings that result from the use of tax exempt bond financing, add up to $298 million over 40 years (present value).
Councilman Monserrate, who represents the Shea Stadium neighborhood, responds to the IBO’s findings:

"The IBO report puts it in black and white. The Mets are getting a sweetheart deal from the city to build a new stadium. The residents of New York are footing the bill to the tune of $177 million, while the Mets stand to save almost twice that much. Without a promise to give anything back to the community, it's clear the costs and benefits of this deal do not weigh in the favor of our residents."
This independent cost benefit analysis demonstrates that, in true Bronx Terminal Market form, Dan Doctoroff and company seem unable to resist aggrandizing a private company with public monies. What’s also clearly proven is that economic analyses by unbiased agencies like the IDA cannot be trusted. According to the IBO report:

IDA’s cost/benefit analysis finds a net fiscal benefit for the city of $47.9 million in present value terms. But their calculation ignores several items that IBO would include in such a calculation, most notably the foregone parking revenues, which IBO estimates have a present value of $80 million. Simply including that item in the IDA calculation would switch the fiscal impact from a net positive to a net negative.
Considering the extreme cost to tax payers, and the impact the stadium has on surrounding neighborhoods (Patrick Arden emphasizes this point today’s Metro) we think it quire reasonable for Councilmen like Monserrate to be demanding a community benefit agreement that will make these deal a bit more palatable.