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News of the Day – 1/15/09

Powered by ’80s New Wave music, here’s the news:

  • Over at LoHud, Pete Abe wonders “at what point is rotation depth a concern”:

It’s not acceptable for a contending team to go into the season with four good starters and hold a contest for the fifth spot. You need to have a good No. 5 and decent options beyond that. Or do you believe that Sabathia, Burnett, Wang and Chamberlain will all stay healthy for six months?

Sign Andy Pettitte and the problem is solved. We wrote last week that one side had to blink. But so far nobody has. If not Pettitte, then somebody else.

[My take: I know I'm gonna sound like a broken record, but why not take a stab at Ben Sheets?]

  • At the Times, Jim Dwyer opines on the Stadium funding fiasco and the political machinations thereof:

Without a doubt, politics is part of the invisible cost benefit analysis of the Yankees and Mets stadium deals — not only for those who now criticize them, like the comptroller, William C. Thompson Jr., who approved them in 2006, but also for those few who champion them, like Mayor Michael R. Bloomberg.

Such political values may not turn up on any public balance sheet, but it would be unwise to ignore them simply because they are invisible.

Suppose you are Mr. Bloomberg, your hopes of becoming president or vice president all but vanished. You have to step down as mayor in 2009 because a law that you unequivocally supported says you only get two terms.

How handy, then, to have powerful allies, like the developer, Jerry I. Speyer and the lobbyist, Howard Rubenstein, to convince other influential people that term limits will deprive the city of an essential leader during an era of financial crisis.

[My take: I think every member of the City Council, the NY State Assembly, and the Mayor’s Office of Management and Budget should be forced to read THIS book, especially Chapter 6 – The Stadium Issue].

  • In a separate Times article, is it noted that the Stadium financing issue may be an albatross for Bloomberg’s re-election hopes.

  • ESPN.com (via the AP) reports on a contentious Stadium financing hearing featuring Randy Levine and Assemblyman Richard Brodsky:

At the heart of the disagreement was the funding mechanism by which the Yankees will pay back bondholders through an instrument called payments in lieu of taxes, or PILOTs.

“Only this, and nothing additional from the government or the taxpayers, pays back the private bondholders,” Levine said.

But Brodsky insisted in a report prepared for the meeting that “taxpayers are paying the cost of constructing Yankee Stadium despite repeated claims to the contrary.”

[My take: All the Yanks' 'sturm und drang' about creation of jobs and increased revenues for the City would seem to be a bit hollow.  At best, the construction jobs were only for a couple of years, and really, how many more workers will be employed in the new Stadium as compared to the old Stadium?  The City isn't getting a new revenue source ... its just replacing an older one.  Perhaps there will be higher sales tax revenue from the tax on a $6 soda rather than the $5 you paid for the same thing at the old Stadium.  And ... let's not forget all the times Boss George threatened to pull the Yankees out of the Bronx if he didn't get his improvements to his facility.]

  • The odds of Andy Pettitte being in pinstripes this season are …. dimming, as per MLB.com.
  • MLB.com reports that the Yankees have 20 NRIs coming to Spring Training next month, including recent acquisitions Kevin Cash, John Rodriguez, Angel Berroa and Jason Johnson.
  • Shelley Duncan cleared waivers, and was one of the 20 NRIs.
  • The Post reports that Goose Gossage is happy that Jim Rice finally got the call for the Hall:

Gossage said the only bummer from his own election a year ago was that Rice didn’t get to go in with him.

“I thought he deserved to go in way before this, but better late than never,” Gossage told The Associated Press today. “I’m really very happy for him. From a pitcher’s standpoint, no one scared me – but he was one of the guys that came the closest.”

Gossage figures he and Rice were cut from the same cloth: no-nonsense individuals who got under opponents’ skin with their passionate, competitive nature, and he counts the matchups against Rice among his best memories.

  • NHL hockey in the new Stadium?  It could happen, reports Newsday.
  • Happy 53rd birthday to Jerry Narron.  He debuted with the Yanks in 1979 at the age of 23, and was Munson’s caddy until the Captain’s tragic passing.  Brad Gulden was then called up, and took over the starting catching job for the rest of the year.  Narron was traded in the off-season, and Rick Cerone was acquired to take over behind the plate in 1980.
  • On this date in 1934, Babe Ruth signs a one-year contract worth $35,000. While the contract is considered a lucrative one for the times, it represents a pay cut of $17,000 for “The Babe” .
  • On this date in 1958, the Yankees announce that 140 games will be televised during the upcoming season. The deal is worth over $1,000,000.

Categories:  Diane Firstman  News of the Day

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20 comments

1 williamnyy23   ~  Jan 15, 2009 9:32 am

I think the hearings yesterday exposed Brodsky. It's pretty clear that he has seized on this issue to raise his profile, but is poor grasp on the complexity of the issue has made him look more foolish than not.

Now matter how you want to spin it, the fact remains that money is not going from the City to the Yankees. I hate to belabor the point, but the main support given to the Yankees is about $6mn in forfeited tax revenue (before netting out expenses to maintain the old building) over the next 40 years, a large portion of which is actually absorbed by the Federal Government, not the City (especially to the extent that buyers of the bonds are NYC residents). Also, it should be noted that without the tax exemption, the Yankees would have higher interest expenses (going to investors, not the government) and therefore larger tax deductions, which could wind up reducing the team’s tax liability (and could actually lower the true tax savings).

In many ways, the City and Yankees are partners in this deal. The City maintains the land, allowing the team to get favorable financing and avoid property tax, while the Yankees spend over $1 billion in the South Bronx as well as commit to staying there for a very, very long time.

I guess you can scoff at the idea of construction jobs that last only 3 years, but all construction is temporary. If you don't think the city unions and their laborers value those jobs, then I would suggest you think again. Also, the Yankees are not required to stay in the Bronx. You simply can not state that there will be a small net gain on that basis because it ignores the real possibility that the Yankees could relocate. Lost jobs hurt even more than ones that aren't created.

Net net, NYC is better off because of the Yankees staying in the Bronx, and the area is better off for the billions of dollars flowing into the area.

Would it be nice if the Yankees could have used private financing? I guess. The Government collectively could have gained a marginal amount of increased revenue, while for the Yankees, they would have owned the land. Of course, the increased financing cost would have prohibited the project, so eventually reality does set in. I think too many people are losing sight of the reality of the situation, partly because they don’t fully understand the complexities, but mostly because they are looking at the issue through an ideological prism.

2 JL25and3   ~  Jan 15, 2009 9:37 am

George's public threats to leave the Bronx had essentially stopped well before the new Stadium was approved. They were really a product of the early 90s, when attendance was low and he could claim that no one wanted to come to the Bronx. But ten years later the neighborhood had improved considerably, and attendance was through the roof, and he really wasn't threatening much of anything.

By then, I don't think any threats would have been credible, anyway. Where was he going to move to? Who was going to build a stadium for him?

3 williamnyy23   ~  Jan 15, 2009 9:42 am

[2] The threats stopped because the Yankees and the Guliani administration had been in talks about a new Stadium for quite a long time. As you might recall, the Yankees originally had their heart set on the Westside, but with inducement from the City, the parties started working on plans in the South Bronx.

I guess you could argue that the Yankees would never have left the City, but similar bluffs have been called in the past. When the cost is really so small, it would be irresponsible to take such a risk.

4 JL25and3   ~  Jan 15, 2009 9:48 am

[1] William, I believe you also look through the issue through an ideological prism. According to the city's Independent Budget Office (http://ibo.nyc.ny.us/iboreports/yankeesmets011409.pdf), the property tax abatement is worth $416.6M to the Yankees. I don't really care if it comes from the feds or from the city ; public trough is public trough.

I will say again: the economic benefit to the area is minimal. Yes, 4 million people can come into the area with minimal economic benefit, because virtually none of them spend money outside the stadium. The real economic benefit will come from the mall down the street; it provides real commerce, real jobs, didn't involve the taking of parkland, and didn't cost hundreds of millions of taxpayer dollars. it's of vastly more benefit to the area than the Stadium ever will be.

The Yankees weren't required to stay in the Bronx, no - but as I said above, where were they going to go?

I'll say more later...for now, it's clear that Brodsky overstated his case far too much. That's too bad, because he could have addressed the real deceptions without damaging his own credibility.

5 JL25and3   ~  Jan 15, 2009 9:49 am

[3] When was the last time a baseball team called that bluff? And how many of them were moving away when their current location was so hugely profitable?

6 JL25and3   ~  Jan 15, 2009 9:50 am

[3] And the talks with Giuliani had ended when Bloomberg took office. The threats didn't reappear.

7 williamnyy23   ~  Jan 15, 2009 10:11 am

[4] That $416mn is over 40 years...you can't leave that out! Also, again, property taxes are deductible, so you have to net the reduced tax liability out of the $10mn/year property tax gain.

When you are talking about tax abatements, I think it is incorrect to refer to the public trough. Otherwise, everyone who owns a house has had it built on the public trough. And, if you accept that broad definition, then how can you argue about everyone taking advantage?

If you look at that report you posted, the City's non-infrastructure costs are minimal. Regardless of how you feel about it ideologically, it is a big Win for New York City.

As for the economic activity outside the Stadium, I got to about 20 games and spend a lot of money on souvenirs, parking and food. Judging by the crowds and lines I encounter, it seems as if many other people do as well. Maybe these "service" jobs don't meet everyone's standards, but the people who hold them probably value them more highly.

As for the Gateway Mall, you couldn't be any more wrong. For starters, the developers did receive $200mn in tax free financing. Also, while parkland wasn't needed, the City did have to condemn the old Bronx Terminal Market. Like it or not, these types of things are needed to facilitate big project construction. Also, I am sure that the Yankees project had some influence on the Gateway developers...it is a lot more attractive to make an investment in area where others have made a similar commitment.

As for where the Yankees could have gone, there are several options. With over 60% of attendance from NJ and Westechester, either area could have been a possibility. In fact, a quick search found the state of NJ proposing three sites as late as 1996.

As for my ideologically, I am pro-Yankees and pro-New York City, and in this case, both of those are being satisfied.

8 williamnyy23   ~  Jan 15, 2009 10:12 am

[4] Also, it should be noted that the Yankees did not pay property taxes to the City in the old Stadium, so this is not a net loss from the move.

9 Mattpat11   ~  Jan 15, 2009 10:16 am

I really don't get the Brad Penny love. Never have. Carl Pavano 2.

10 Raf   ~  Jan 15, 2009 10:19 am

As you might recall, the Yankees originally had their heart set on the Westside, but with inducement from the City, the parties started working on plans in the South Bronx.

Not only that, but a stadium on the west side of Manhattan would be a nightmare. Of course, it's reasonable to assume that a Stadium there would've cost more than the one in the Bx.

11 Raf   ~  Jan 15, 2009 10:23 am

By then, I don’t think any threats would have been credible, anyway. Where was he going to move to?

Historically, the Meadowlands, Yonkers and the west side of Manhattan were 3 potential locations.

12 williamnyy23   ~  Jan 15, 2009 10:24 am

[5] Sports history is full of teams who have moved...including NY football teams to NJ and NY baseball teams shifting around the City and country. Municipalities usually don't bluff teams because they don't want to lose them...the teams have the leverage for a reason.

[6] The Yankees and Mets both had deals in place when Guliani left office. When Bloomberg took over, he reworked them to account for the post 9/11 economic downturn. The threats ceased because real negotiations were taking place.

13 rbj   ~  Jan 15, 2009 10:33 am

"In a separate Times article, is it noted that the Stadium financing issue may be an albatross for Bloomberg’s re-election hopes."

Good. I hate it when politicians put in things such as voter approved term limits and then do an end run around them.

14 williamnyy23   ~  Jan 15, 2009 10:35 am

[10] The cost was estimated at $1bn in 1993, so yes, it would have been much more expensive.

15 williamnyy23   ~  Jan 15, 2009 10:37 am

[13] That will be Bloomberg's albatross...not the Stadium deal.

16 Raf   ~  Jan 15, 2009 11:02 am

As for Pete Abe, he couldn't be more wrong. He needs to take a closer look at history as well as other teams in the league. Using Steve Lombardi's criteria (he posted an entry on this topic @ WW) of a #5 who is a lock for at least 25 starts and 150 quality innings, we came up with 9 teams in 23 years (out of a possible 136 teams), which covers the 2 division & 3 division format.

17 JL25and3   ~  Jan 15, 2009 11:43 am

The Gateway Mall doesn't need the Stadium. It's perfectly situated with or without.

As for the jobs: for the investment the taxpayers are making, I would hope for more than jobs that provide a few hours a day, 81 days a year.

Economic growth for the area doesn't come from money spent in the Stadium. If the Yankees did move away, the only businesses that would be seriously affected would be Stan's Sports Bar et al. The area's economy would be essentially unaffected.

Here's my one starting premise: the new Stadium provides no benefits to the community that outweigh the loss of Macombs Dam Park. The new parkland, if it ever materializes, won't do that either. I firmly believe that this neighborhood would be better off with a park and no Stadium, if that's what it came to.

18 Rich   ~  Jan 15, 2009 12:17 pm

[9] WIth the notable exception that Penny only signed a one year, incentive-laden contract. If the Yankees had signed Pavano to a similar one year contract in 2004, it would have been a risk worth taking.

19 williamnyy23   ~  Jan 15, 2009 12:37 pm

[17] It doesn't "need" the stadium, but you can't convince me that all of the concurrent development in the South Bronx is not somehow related.

You've shifted the argument: the Park versus the Stadium is nother issue altogether. Assuming the park land is eventually replicated in the area, I don't even think it is an issue. Otherwise, I am not really sure how you make the determination. While someone who heavily uses the park would be worse off, one who never stepped into it likely wouldn't care. I haven't polled all of the area residents, but if they feel as you do, they need to elect new community leaders, most of whom clamored to keep the Yankees in that location.

I'll also make one more point about the jobs and economic activity. Again, seasonal jobs might not register as being important to some, but for the thousands who hold them, I am sure there is real economic value. Also, more than just Stan's benefits from stadium traffic. There are bodegas, delis, franchises, souvenir stands, taxi companies, parking attendants and other similar businesses that benefit. Are we talking about 100 people....1,000 people...I don't know. But there are enough people who depend on the economic activity generated by the Stadium to make one at least pause before dismissing them.

20 Raf   ~  Jan 15, 2009 2:16 pm

It doesn’t “need” the stadium, but you can’t convince me that all of the concurrent development in the South Bronx is not somehow related.

I touched on this in the other entry, but there have been other projects in the Bx that have been approved before the Stadium project, and there are other projects in other boroughs that are independent of the Stadium project.

Given the way things work, I would not be surprised if they were related, but at the same time, I would not be surprised if these projects were independent.

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