by Neil deMause
Hudson Yards, though, would survive without its anchor stadium, with the city and state moving ahead to spend billions on the subway extension and convention center expansion, despite fears that the expected commercial development would never materialize. And shortly after the death of the Jets plan, Silver would introduce a bill containing tens of millions of dollars a year in tax breaks and rent subsidies for businesses relocating to his lower Manhattan district. Within an hour of landing on legislators’ desks—before many had even had time to read it—the bill had passed unanimously.
King George and the Stadium Dragon
The stadium calm lasted barely one week. Then, after a whirlwind set of negotiations with Olympic organizers over the course of a weekend, the mayor announced his fallback plan to save the Olympic bid. A stadium would be built in Queens, in the parking lot of Shea Stadium, to be the new home of the Mets; if New York landed the Olympics, it would be expanded to eighty thousand seats for a summer, and the Mets would move in with the Yankees for a season. As for George Steinbrenner’s squad, they would get a new home of their own across the street from Yankee Stadium—right where Rudy Giuliani had wanted to put it four years earlier.
Three days later, the news media packed into the Stadium Club inside Yankee Stadium for the team’s official announcement. The Yanks’ iconic home, declared team president Randy Levine, was “becoming nonfunctional” but would be replaced by a newer, better stadium with all the modern amenities: “Today’s announcement is not the end of a legacy, but the continuation of one.” And better yet, added Steve Swindal, George Steinbrenner’s son-in-law and heir apparent to the Yankee throne, “There will be no public subsidies.”
Mayor Bloomberg, after joking that he was already practicing his curveball to throw out the first pitch in the new stadium, echoed Swindal: “The state helping the way, but George footing the bill—it doesn’t get any better than this.”
What had changed in the four years since Rudy Giuliani had offered a 50–50 public–private split as the best the city could hope for? For one thing, baseball’s internal finances had made it more palatable for teams to pick up a greater share of stadium construction costs. Under the revenue-sharing plan put in place in baseball’s 2002 labor agreement, teams had to pay an average of forty cents on each new dollar of revenue into a pool to aid lower-revenue teams. The tax was levied on gross revenue, not net—no deductions were allowed on expenses, with one exception: “stadium operations” costs, which were defined to include payments on stadium construction bonds.
For a team looking to build a new stadium, this was a huge windfall: For every $100 million you spent, about $40 million could be recouped by reducing the revenue-sharing checks you sent to the league offices—effectively passing along 40 percent of construction costs to your competitors. It was no coincidence that the first stadium to be approved following the new labor deal, a new home for the St. Louis Cardinals, featured one of the highest team contributions in decades, with the Cards picking up about two thirds of the price tag. The Mets and Yanks would continue that trend, by picking up an unprecedented 100 percent of construction costs.
But not all costs. Although the teams would be responsible for all the costs of building the stadiums themselves—enabling them to reap the maximum revenue-sharing deduction—the city and state were set to provide a long list of goodies that belied Swindal’s “no subsidies” line.
First and foremost was land. The Yankees planned to erect their stadium in what was currently a public park, and state law required that the city replace the parkland with equal acreage elsewhere. That cost was initially estimated at $135 million (later raised to $195 million), though only about $100 million was for actual replacement parkland; the rest was to go for such things as demolishing the existing stadium and relocating a water main that stood in the way of the new facility. All of this expense would be covered by city taxpayers.
Secondly, Steinbrenner’s long-standing yen for more parking for his suburban fan base was to be met with four new parking garages, also to go up in what was currently parkland. The state government would kick in $70 million toward the garage construction, with the rest coming from an as-yet-to-be-determined private developer. Though the state initially claimed that taxpayers would recoup their investment, it later admitted that all parking revenues would go to the private operator—the $70 million was a “capital subsidy” that would not be repaid. Meanwhile, the Mets, who had no need for garages, would get a similar state subsidy in the form of “infrastructure” money to sink pilings for the foundation of their new stadium.
The publicly reported subsidies, though, were only the tip of the iceberg. At their old ballparks, both teams paid an annual rent—though only after deducting maintenance expenses. (A clause required annual audits by the city comptroller to weed out excessive deductions. On one occasion, Steinbrenner had tried to bill the city for an engineer who had somehow managed to work 168 hours per week.) In exchange for the teams’ taking on all maintenance and operations costs of the new stadiums, the city had agreed that they would henceforth play rent-free—a tradeoff that Bloomberg claimed would save the city “hundreds of millions of dollars” on the upkeep of Shea and Yankee stadiums.
The city, though, had previously been earning money off the team leases. In particular, the Yankees, whose attendance and ticket prices were both soaring, had in recent years paid enough annual rent to easily cover both maintenance costs and any additional capital expenses the city might incur. The “hundreds of millions” figure, a city spokesperson later explained, was the cost of meeting the Yanks’ demand for a stadium “on par with other first-class major league baseball facilities located around the country.”
And there was more. Though the stadiums would be paid for by the teams, they would be owned by the city, so that both teams could be exempt from paying property tax. (In the bizarro world of sports facilities, it’s often more lucrative for team owners not to own their stadiums, so long as they control all the associated revenues.) Likewise, they would receive special exemptions from paying both mortgage recording tax and sales tax on construction materials. The MTA would build a new commuter rail station for the Yankees, at a public cost of at least $45 million. And under the terms of the Mets deal, owners Fred and Jeff Wilpon would get the first $7 million a year in parking fees at their new stadium, money that currently had to be shared with the city—even though fans would be parking their cars in the exact same lots as before.
Finally, as part of his going-away present to the two teams, Mayor Giuliani had approved $5 million a year per team in “stadium planning” credits for the years 2001 to 2005. Bloomberg extended the rent credits another three years, costing taxpayers another $30 million. And, whereas under Giuliani’s plan the city would have recouped the rent credits by deducting them from its own stadium construction expenses, under the Bloomberg plan the city had no stadium construction costs to deduct from—meaning the mayor was effectively tearing up nearly $50 million in IOUs from the two teams.
When all was said and done, the Yankees’ new stadium would cost city and state taxpayers about $551 million dollars; the Mets park would add $353 million more. Even the city’s own economic consultants, notes corporate-subsidy analyst Dan Steinberg of Good Jobs New York, who conducted an in-depth study of the Yankees project, projected that the city and state would gain just $225 million in new tax revenues, not nearly enough to pay back the public’s costs. Yet the city still insisted the public would make money on the deal. “They did some very sneaky things with the numbers,” says Steinberg, including counting as a $25 million city “benefit” the savings from not having to renovate the old park. “They hadn’t spent that much money on those parks in the past twenty years. But then they used that to say, ‘That’s $25 million we saved by doing this project.’” The city also excluded the cost of tax breaks from its analysis, he discovered, even though “by their own protocol, it’s almost unheard of for them not to quantify the value of sales and
property-tax breaks—these are numbers that are routinely included.”
As for the Yankees and the Mets, after all the tax and revenue-sharing benefits, they would be on the hook for just $350 million and $306 million, respectively. (Counting the federal subsidy of the tax-exempt bonds, the two teams would actually end up spending less on their new stadium than taxpayers would.) But the teams would have an important advantage over the public: They would get to defray their costs with lucrative naming-rights and concessions revenues, none of which would have to be shared with taxpayers.
Bloomberg’s stadium plan, admits Steinberg, “is better than the Giuliani plan”—though he notes that under the old agreement, the teams would have shared 4 percent of home-game receipts with their city landlords, a clause that would have brought in enough money from the Yankees alone to pay off $175 million in stadium costs. However, given that neither team was likely to leave, and that their current stadiums were already cash cows, the city had hardly driven a hard bargain. “Because of the Yankees’ success in recent years, because of the economy, because of the strength of the real-estate markets, the city was in a privileged negotiating position,” he says. Yet the teams were handed all the revenues from the new buildings, and, after all the tax breaks and other public subsidies, were paying a smaller share of the costs than the public was.
Concludes Steinberg: “The taxpayers were fleeced.”
Hallowed Ground
As for the stadiums that would fall to the wrecking ball to make way for the new ones, they evoked very different emotional reactions from New Yorkers. Shea Stadium was a 1960s-era concrete doughnut, best known for bitter winds off Flushing Bay and the roar of airplanes landing at nearby LaGuardia Airport; arguably, its biggest claim to historical fame was as the place where Beatlemania first touched down in the United States, with the Red Sox’s epic collapse in the 1986 World Series a distant second.
Yankee Stadium was something else entirely. In 1923 the New York Giants, jealous at the Yankees’ newfound success behind box-office superstar Babe Ruth, had booted the team from Manhattan’s Polo Grounds, at which point the team simply hopped across the river to the Bronx, where it would win an incredible twenty of the next forty world championships. (In that same time span, the Giants won two.) Following the mass demolitions that hit baseball in the 1990s, the House That Ruth Built was left as baseball’s third-oldest stadium, with the Boston Red Sox’s Fenway Park and the Chicago Cubs’ Wrigley Field the only other survivors from the days of the original steel-framed ballparks.
By 2005, though, Yankee Stadium was also no longer the ballpark of DiMaggio and Mantle. In the mid-’70s, after the team’s then-owners threatened to take the Yankees to New Jersey, the city of New York had agreed to fund a $25 million renovation of the stadium that added luxury boxes and removed view-obstructing columns. (It also stripped much of the architectural detail, including the renowned copper-friezed roof, making the stadium ineligible for city landmarking.) As stadium historians Bill Shannon and George Kalinsky wrote at the time, the renovation “will leave us with a great sports landmark structurally mauled somewhat beyond need, in our view. But some Yankee Stadium is better than none, and that seemed to be the alternative choice.”
The price tag for the renovation would ultimately soar to $119 million, even as promised improvements to the surrounding Bronx neighborhood were hastily scrapped. But George Steinbrenner, the Cleveland-born shipping magnate who purchased the Yankees from CBS for a cut-rate $10 million in 1973, never seemed happy with the rebuilt stadium, griping that its Bronx environs were too shabby, and parking and highway access insufficient. In the mid-’80s, Steinbrenner had begun alluding to the possibility of moving the team to New Jersey if his demands weren’t met. Even the emergence of a new Yankee dynasty in the 1990s and subsequent boom years at the turnstiles—the Yankees set a new American League record in 2005 with nearly 4.1 million tickets sold—weren’t enough to convince him that the old ballpark had economic life in it.
Mayor Bloomberg seemed to agree, telling the Stadium Club crowd that Yankee Stadium was “antiquated” and “fails to reflect the glamour of the club.” The old stadium, team officials promised, would be retained as a “Heritage Field”—though a glance at the hastily assembled architectural model on display made clear that the stadium itself would be razed, with only the field and perhaps a few thousand seats remaining as a Little League and softball field. (Even this remnant would later be eliminated from the plan.) Across the street, a new fifty-two thousand-seat stadium would rise, with a facade reminiscent of the original Yankee Stadium; hiding behind its concrete skirts would be a hundred-foot-wide shopping concourse, an entire deck of club seats, and sixty luxury suites. To make room for the new high-priced seating, the entire upper deck would be shifted about thirty feet farther back from the field, putting the last row in the new smaller building just as far from the action as the last row in the old fifty-seven-thousand-seat stadium. Meanwhile, all that luxury seating would come at a high price to fans: The estimated average ticket price for a game at the new stadium in 2009, according to city projections, would leap from $27 to $57.
Then there was the matter of what currently stood where the new stadium would go. Macombs Dam Park was first dedicated as parkland in the early years of the twentieth century, when Babe Ruth was still building his House on the other side of 161st Street. By the 1990s it was not much to look at: a running track with a soccer field perpetually pounded into bare dirt at its center, plus a couple of baseball diamonds, ringed by a line of old oak trees that provided the park’s only greenery. Across a street to the north, Mullaly Park featured tennis and handball courts and one of the neighborhood’s few playgrounds.
If the parks looked perpetually worn, though, it was because they were so heavily used. Macombs Dam Park played host to soccer, baseball, and track meets for both pickup teams and the local schools; numerous local residents, many of them elderly, would walk the running track for daily exercise. “As far as I can remember, there were always people in that park, from early morning to late at night,” says Anita Antonetty, who moved to the Highbridge neighborhood overlooking the park in 1968. “It was a wonderful large space to go and take your kids. Or just to just sit and look at the trees—it was really a nice place to be, because the trees were big old trees, so they gave a lot of shade.”
Under the Yankees’ plan, all of Macombs Dam Park and the southern section of Mullaly Park would be eliminated; the team’s new outfield would stand where the running track had been. There would be a scattering of replacement ball fields, some on the old stadium site to the south, some on the far side of the Major Deegan Expressway. For the residents of the densely populated art deco apartment buildings along Jerome Avenue, though, their view would no longer be of greenery, but of the outside wall of a baseball stadium and multistory parking garage. “It was just a very convenient place, that park, in the middle of a residential area,” says Antonetty. “Now you’re going to have this giant stadium in between to get around. It’s poor planning, that’s what it is.”
Bronx Jeers
For those who lived in the Bronx neighborhoods around Yankee Stadium—Highbridge, Morrisania, Melrose—the news that the Yankees planned to build a baseball stadium on top of their local park came as a shock. Lukas Herbert, a city planner in suburban Westchester County who’d recently moved to the area, recalls walking by a newsstand and spotting a headline about the new stadium plans. “At first I thought this would be really great for the neighborhood,” he recalls. But as more details emerged, Herbert, who was a member of the local Community Board 4, began to wonder.
Antonetty, the community board’s recording secretary, recalls that Bronx borough president Adolfo Carrion had presented the board’s executive committee with a similar stadium plan the previous summer. (Carrion, who in his inaugural speech as borough president in 2002 had declared that “New Yorkers need schools and not stadiums, and I will never abandon that fight,” was hoping to include a co
nference center and high school in the stadium development, though neither the Yankees nor the mayor seemed very interested.) Antonetty recalls that one board member, land-use committee chair Mary Blassingame, raised concerns about having the stadium in the park and how it would affect residents of the Jerome Avenue apartment buildings facing the site. “The borough president said, ‘This is not the final plan, this is just an idea, and we’ll work on it later.’” The next the board heard about the plan, she says, was when the Yankees held their Stadium Club press conference: “That’s when we saw that this was really going to happen.”
Slowly, by word of mouth and the occasional flyer taped to a lamppost, news of the stadium plan filtered out to the neighborhood. Herbert was at his job in the suburbs when he learned that the city was holding its first public hearing on the Yankees project. “I was reading the Tri-State Transportation Campaign’s e-newsletter, and it said, ‘Yankee Stadium draft scope release, public hearing will be held.’” After phoning the community board’s district manager, who was likewise in the dark, Herbert tracked down the agency in charge of the public-hearing process—in this case the Parks Department, which not only controlled the parkland but owned Yankee Stadium as well—to find a copy of the stadium plan.
Herbert remains aghast that, if not for this chance discovery, the public comment period might have begun without anyone from the public being alerted. “You can’t possibly tell me anybody in that neighborhood knows to look on the environmental notices bulletin for the state Department of Environmental Conservation to find the lead agency contact name,” he says. “Most people around here don’t even have computers.” At the scoping hearing—designed to get feedback on what issues the city environmental impact statement should evaluate—Herbert estimates he was one of only three or four people in the room who had actually read the documents that testimony was being solicited about.