A Bloomberg
Score Card: The Mayor's Hits and Misses
By Wayne Barrett. The Village Voice
...As much as the city ought to name a hospital after Mayor Mike, it is more
likely to name a stadium or arena. He has certainly spent enough of our money
on them to pay for the naming rights. If he gets a pre-election Yankees World
Series parade, the confetti should remind us of the bonanza of tax dollars
that helped finance the stadium in which it was won.
City officials resent any suggestion that Bloomberg's has been a stadium-centric
economic development policy. They rightly point to his smart focus on biotechnology,
including the ongoing construction
of the East River Science Park and support of the
SUNY Downstate Biotechnology Incubator, all contributing to top rankings
as a life science city in two national surveys. They point to his nurturing
of the tourism, film/TV, and nonprofit sectors. The $4 billion he has invested
in new housing is cited as an economic development marker. But the
fact remains that the only major projects built or to be built in the Bloomberg
era—the monuments to Mike—are Yankee Stadium, Citi Field, and
the soon-to-be-bonded-by-the-city Nets arena in Brooklyn. Even the
city-financed extension of the 7 subway line, ballyhooed by Bloomberg aides,
is merely a potential pathway to Westside development, not a project itself.
That's a dismal track record, especially from a mayor who derided the job
development benefits of stadium deals when
he junked Giuliani's in 2002. The city is directly spending a half-billion
on the two stadiums, largely for infrastructure improvements, some of which
are still incomplete. It is also tapping its own supply of tax-exempt bonds,
which are supposed to be used for projects of great public value, like hospitals,
for $1.9 billion, subsidizing the two teams that are claiming to be building
the stadiums themselves to the tune of $1.3 billion (a combination of the
savings achieved through the bonds and other property, mortgage, and sales
tax exemptions). The evidence that top officials of the Bloomberg
administration reversed land assessments for the Yankees deal to artificially
jack up the value in order to qualify for the tax-exempt financing is overwhelming
and would—in a time when a good scandal had staying power in New York—make
Bloomberg wince at the thought of an election eve parade. E-mails like one
from a top aide to Deputy Mayor Doctoroff explicitly said they were making
the assessment "so high" in an attempt "to support the tax-exempt financing."
By December, the Bloomberg administration will replicate its scandal-ridden
history of bonding these projects by supporting the issuance of $678 million
in state tax-exempt bonds for the Nets. The IBO estimates that the
arena will also cost the city $350 million, combining direct and indirect
subsidies, concluding that it will lose at least $40 million over the life
of the deal, assuming the
most optimistic revenue projections. Salty Mike's
response to the unstated, apolitical IBO: "I don't know what the IBO studies
would have shown back when they tried to establish the value of Central Park."
A Bloomberg hero, the late Senator Patrick Moynihan, attached an amendment
to the IRS code in 1986 to try to bar cities from using tax-exempt bonds to
finance stadiums, but the IBO reports that the city "found a way to circumvent
these strictures" by technically structuring these two privately built and
operated stadiums as publicly owned and leased for 99 years. The IRS originally
OK'd this arrangement and then reversed itself, prohibiting such maneuvers
in the future. Yet the city plans to do the arena precisely the same
way, and the IRS grandfathered the arena in under its initial ruling, giving
the city until the end of the year to sell the bonds. Incredibly, all of these
resources have been used either to induce a basketball team to move across
the river or to build stadiums with fewer and more expensive seats,
neither of which is much of a public benefit. And every independent
analysis re-establishes what the mayor once believed—nothing generates
fewer real jobs than these television studios disguised as sports facilities...
(Emphasis added.)
