New York City and New York State officials traded barbs yesterday over additional bond financing for the new Yankee Stadium that is set to open later this year.
City Comptroller William Thompson Jr. launched a blistering attack against the administration of Mayor Michael Bloomberg's handling of the financing and said he would vote against issuing additional bonds for the stadium unless the vote were postponed and the city worked out a better deal with the Major League Baseball franchise. A Bloomberg spokesman responded by questioning Thompson's motives for criticizing the deal.
The New York City Industrial Development Agency scheduled a vote on Friday on the issuance of $430 million of tax-exempt and taxable bonds on behalf of Yankee Stadium LLC to complete and enhance the stadium. The issuance would include $60 million of refunding.
Thompson, who is running for mayor against Bloomberg, has one vote on the IDA's 14-member board. The city's five borough presidents also have votes on the board. Borough presidents' offices either did not return calls yesterday about the stadium deal or declined to comment.
The IDA sold $967 million of bonds for the stadium in 2006 with various maturities out to 40 years. Last week, 40-year bonds with a 5% coupon traded 14 times, and most recently, on Monday, a dealer sold a tranche of $50,000 to a customer that yielded 7%, according to BondDesk's Muniticker.com. That was five basis points lower than a $65,000 tranche that traded on Friday.
Moody's Investors Service rates the outstanding bonds Baa3 and Standard & Poor's rates them BBB-minus. Rating analysts at both agencies have said that ratings on the additional bonds are expected to be released within the next two weeks.
Meanwhile, Assemblyman Richard Brodsky, D-Westchester, who chairs the Assembly committee on authorities and corporations, yesterday subpoenaed Yankee president Randy Levine and New York City Economic Development Corp. president Seth Pinsky to testify today at a hearing on the stadium financing.
Brodsky, who has said that the city has stonewalled his investigation into the financing and withheld documents, last week invited Pinsky and other city officials to the hearing, but they had declined.
A spokesman for Bloomberg said that the city had provided Brodsky with thousands of pages of documents and said that the assemblyman was "grandstanding."
A flurry of charges and counter charges backed by contradictory cost-benefit numbers have created a murky picture of the facts.
Thompson and Brodsky have charged that the city gave away too many benefits to the Yankee corporation while receiving too little in return. They also questioned the increased cost of the project.
"While our financial review can't determine the intent, this incredible mismanagement begs the question, is this plain old incompetence or a blatant attempt to mislead the public?" Thompson said. "Either way, New Yorkers now have a box seat view of fiscal mismanagement."
Bloomberg spokesman Andrew Brent said in an e-mail: "It makes for good political theater for [Thompson] today, but it's hard to believe he doesn't know that the deal leverages a federal program that will result in New York City getting back more tax revenue than it will cost, thousands of new jobs, and more than $1 billion in private investment."
Brent said that by "federal program," he meant that the IDA is permitted under federal law to sell tax-exempt debt for economic development.
IDA spokesman David Lombino responded to Thompson's criticisms in a statement saying the city will received a net benefit.
"The city is receiving a lot in return for issuing the new tax-exempt bonds," Lombino said. Lombino said that the city will receive $11.5 million in capital from the Yankees to be used for parks and infrastructure projects and that the Yankees organization will put $225 million of its own equity into finishing the stadium, thus creating tax revenue for the city.