The New York City Indsutrial Development Agency said today that the Internal Revenue Service has given them permission to sell about $1.44 billion of tax-exempt bonds backed by payments from the teams to pay for the construction of two new baseball stadiums for the Yankees and Mets.
Bonds for both projects will be backed by payments in lieu of taxes, or PILOTs, a structure approved by the City Council earlier this year.
The private letter rulings from the IRS was the final hurdle both teams had to clear before going to market. The IDA gave its final approval for both sales earlier this month.
Under the financing plan, the Yankees would sell about $920 million of tax-exempt PILOT debt and about $25 million of taxable debt backed by lease payments. Similarly, the Mets would sell roughly $528 million of PILOT debt and approximately $104 million of taxable bonds backed by rent to the city. The IDA would be the conduit issuer for the teams.
The city, which owns the land upon which the new facilities would be built, would transfer title to the IDA, keeping the property exempt from traditional property taxes. The IDA would then enter long-term lease agreements with the Yankees and the Mets, which would each agree to annually provide the agency with roughly $55 million and $40 million of PILOTs, respectively.
