Who’s PILOTing This Ship?

I still can’t understand why that thing costs $1.3 billion:

New York City and the Yankees may have violated federal tax regulations and state laws in using $943 million in tax-exempt bonds to build the baseball team’s new stadium, according to a report issued on Tuesday by Assemblyman Richard L. Brodsky.

Saying the taxpayers are footing the bill for the $1.3 billion Yankee Stadium in the Bronx and are getting little in return other than higher ticket prices and the loss of parkland, Mr. Brodsky, a frequent critic of the deal, said that the report stems from a review of thousands of pages of previously unreleased documents.

Although city officials and the Yankees hotly disputed many of the findings, the report concluded that the city and the state invested as much as $850 million in cash and tax breaks in the new stadium, which sits across 161st Street from the team’s historic home in the South Bronx.

. . .

Mr. Brodsky and other critics have argued that the city violated federal tax regulations by manipulating the assessed value of the land beneath the stadium so that the team’s annual payment in lieu of taxes would effectively equal the annual payments to bondholders, or debt service, of $56.7 million beginning in 2010.

. . .

The Yankees and the Bloomberg administration have always insisted that the team is paying for the new stadium, unlike almost every other professional sports team. The use, however, of tax-exempt bonds, will provide the team with savings of about $181 million over the life of the bonds, according to the Independent Budget Office.

Mr. Brodsky contends that because the Yankees will pay the city an annual sum in lieu of taxes, that money, in turn, is being diverted from city coffers to pay the debt service on the bonds.

There is no question that taxpayers are making a sizable investment in the new Yankee Stadium, as well as a new stadium for the Mets in Queens. The city and the state agreed to provide the Yankees with more than $300 million in cash subsidies for garages, a Metro-North train station, replacement parks and road work. But the teams do not pay rent for playing on city land, nor do they pay property taxes.

The Bloomberg administration successfully lobbied the Internal Revenue Service to approve the use of the tax-exempt bonds for the stadium, which did not initially qualify. But the I.R.S. later issued a proposal that would tighten the rules governing such bonds so it would be nearly impossible for this kind of financing to be used again by a profitable sports franchise.

Another Music In A Different Kitchen, for comparison’s sake.