Yankee Lobbyists on Taxpayers' Tab
Circling the bases: Documents reveal city paid the team's lobbyists and execs—for lobbying city and state officials
by Neil deMause, The Village Voice, July 25th, 2006 11:47 AM

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City documents newly uncovered by the Voice reveal that the New York Yankees billed city tax- payers hundreds of thousands of dollars for the salaries of team execs and high-powered consultants to lobby the city and state, thanks to the team's sweetheart lease deal engineered by the Giuliani administration.
"You've created this weird circular situation where the city is, effectively, paying with taxpayer money to have itself lobbied for potentially more taxpayer money," says Common Cause's Megan Quattlebaum, one of several government watchdogs who were dumbfounded when the Voice told them last week about the deal. "Taxpayers would not be pleased at all to hear that the city is subsidizing someone to come back and hold their hand out to lobby for more."

The Yankees are apparently taking advantage of a clause in their lease with the city that allows "planning costs" of their new $1.3 billion stadium—groundbreaking for which could take place as soon as next week—to be deducted from the team's rent. The planning deductions date back to a lease renegotiation arranged by Mayor Rudy Giuliani in his final days in office. Under the December 28, 2001, lease deal, both the Yankees and the Mets were allowed to deduct up to $5 million apiece from their annual rent payments to the city, to be used for planning the new stadiums that Giuliani proposed to build, with city aid, across the street from the teams' existing homes.

One month later, incoming mayor Mike Bloomberg scotched Giuliani's stadium plans, declaring it was "just not practical this year to go and build stadiums." But he let the new Giuliani leases stand, even as Comptroller William Thompson insisted they were unnecessary giveaways and demanded they be renegotiated. As a result, according to the city parks department, which oversees the teams' leases, from 2001 to 2005 the Yankees charged the city $15.97 million under the "planning cost" clause; the Mets, $20.2 million.

Until recently, the city had insisted that it had no details of how the "planning" money was spent. But a review of documents submitted by the Yankees to the parks department—pried from the city only after a Freedom of Information Law filing (a separate request has been made for Mets city documents)—shows that the beneficiaries of the city money include not just those working to design the stadium, but also those trying to extract public approvals for it as well.

For starters, Yankees president Randy Levine (a former deputy mayor under Giuliani) and the team's chief operating officer, Lonn Trost—the two top Yankee officials working for passage of the stadium deal—received a combined $312,500 in city money in 2004. The Yankees' justification, according to the documents: The amount totaled 30 percent of Levine's annual salary and 20 percent of Trost's, representing the time each spent working on the stadium project.

Even more audaciously, the Yankees in 2004 charged the city $203,055.87 for the services of Powers and Company, the Albany-based lobbying firm headed by former Republican state chair Bill Powers, one of the men who handpicked George Pataki for his successful challenge in 1994 to Governor Mario Cuomo. (Powers was also tight enough with Giuliani to have raised $1 million for his 1993 mayoral campaign.) According to filings with the New York Temporary State Commission on Lobbying, Powers was hired by the Yankees to lobby the state senate and assembly and the governor's office for permission to use 25 acres of Bronx parkland and $70 million in state money for the stadium— permission that, as the Voice has reported ("Playing Hardball," March 15–21, 2006), was granted in June 2005 after no discussion or debate in the legislature.

The city even apparently paid the Yankees to lobby the city itself. Another recipient of city money, via the Yankees, was the law firm Fried, Frank, Harris, Shriver & Jacobson, which, according to the New York City clerk's lobbyist database, has served as a registered lobbyist for both Tishman Speyer, the Yankees' project managers for the stadium, and the Yankees themselves. (Tishman's $1.9 million in 2004 was the number one billable item in the stadium planning account.) Working on the Yankee account, the documents show, was land-use lawyer and lobbyist Stephen Lefkowitz: The son of longtime state attorney general Louis Lefkowitz, he has been involved with nearly every major development project in recent city history, including Battery Park City, the Time Warner Center, the attempts to build a new New York Stock Exchange and a Manhattan Jets stadium, and Bruce Ratner's Metrotech and Atlantic Yards projects.

Most of the $4.1 million that the Yankees charged to the city in 2004, records show, went for legitimate stadium expenses—soil borings in Macombs Dam Park, architectural renderings, and so on. (The biggest recipient after Tishman Speyer: the design firm Hellmuth, Obata & Kassabaum, whose principal architect Earl Santee pulled in $350 an hour in city funds to design George Steinbrenner's new playpen.) But even here, dubious bills put on the public tab included such items as a $167 meal for three engineering consultants at the Yankees' own Stadium Club.

And while not itself registered as a lobbyist, Tishman Speyer received city cash for several meetings in 2003 and 2004 with city officials, including Bronx Borough President Adolfo Carrión and Deputy Mayor Dan Doctoroff, both of whom ended up becoming backers of the Yanks' stadium plans. At one November 1, 2004, meeting to discuss the pending stadium legislation, all the people in the room—Levine and Trost for the Yankees; Valerie Peltier for Tishman Speyer; and Lefkowitz for Fried, Frank, who charged $1,420 for a two-hour meeting—were billing their hours to the city treasury.

Skeezy as all this may be, lobbying experts say it's unlikely that any of it is illegal. State lobbying commission director David Grandeau explains that as long as the Yankee lobbyists registered with the state (they did) and the city didn't know ahead of time that its money was going to the likes of Bill Powers, it's all within the law. Quattlebaum adds, "I'm not sure that the writers of the lobby law would have anticipated exactly this situation."

While it's not uncommon for companies to get public money to train their executives in, say, language skills or conflict resolution, says Greg LeRoy of Good Jobs First, a national subsidy-watch group, "I can't recall any economic development contract specifically providing for executive salaries or lobbyist salaries. Given that the Yankees are expecting almost half a billion dollars in taxpayer subsidies for their new stadium, it's outrageous to consider that taxpayers may be footing the lobbying bill too."

Parks officials refused comment on the lobbying figures. Calls to Bloomberg, Quinn, and Thompson weren't returned.

Giuliani's lease deal left the door wide-open for the city's ball clubs to dip into the public treasury by defining "stadium planning" as including "the preparation of studies, surveys, tests, analyses, estimates and designs, [and] architectural, engineering, design, financing, accounting, consulting, planning, surveying, environmental, land use, and legal services"—and specifically including team officials' prorated time as an allowable expense.

"The lease gives the Yankees an incredible amount of leeway," says Quattlebaum. "That language is incredibly broad."

In any case, no one in city government, it appears, was keeping tabs on the Yankees' spending. The parks department, though it holds the lease on Yankee Stadium, insists that the comptroller was responsible for auditing the planning deductions. Yet Thompson, who issues yearly audits of the team's maintenance costs—often making headlines when Steinbrenner's rent bill goes up a few hundred thousand dollars as a result—did not do the same for the planning deductions, and Thompson spokesperson Laura Rivera says the office has no intention of conducting an audit at this time.

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NY City's current Mayor has caught Yankee fever, too:

Bloomberg Boots Yankee Stats
City's own figures show that the new Bronx stadium would be a money pit
by Neil deMause, The Village Voice, January 13th, 2006 6:11 PM

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As the Voice reported in November, Mayor Bloomberg's plan to drop a new Yankee Stadium down atop two Bronx parks comes with a hefty price tag: $444 million in rent and tax breaks, free land, and state-subsidized parking garages. (A new home for the Mets would cost another $435 million.) But the mayor has insisted that the project's benefits outweigh the costs; as he said last June in his twin-stadium announcement, "We make 'investments.' We don't do subsidies. We get our money back, and we make money."
An internal economic analysis commissioned by the city Economic Development Corporation, however, says otherwise. According to the report by private consultants Economics Research Associates, city and state tax benefits from the project over 30 years would total just $225 million—barely enough to repay half the public cost. The city's share, $96 million, wouldn't even cover the costs of replacing public parkland, let alone hundreds of millions more in rent and tax breaks.

"It was immediately obvious that this is not a rational investment," says Dan Steinberg of Good Jobs New York, which unearthed the report via a freedom-of-information request and will release a full analysis later this month. "There's a perception that the South Bronx community has to take one for the team. But it's actually taxpayers that share the burden of this project."

Moreover, questionable number-crunching in the study could reduce the public's return still further. The two big bugaboos of economic impact are the substitution effect—many fans would spend money elsewhere in the city if they skipped Yankee games—and leakage—much of Yankee fan spending disappears from the city economy and into George Steinbrenner's beach house (or Jason Giambi's Clomid bill). ERA said it had accounted for both in its report.

But a closer look at the document reveals some curious math. First off, while the team drew 4.1 million fans last year, ERA arbitrarily compared its projections to a baseline of 3.3 million, representing the average attendance from 1997 to 2004. (ERA's projected attendance at the new stadium is actually 180,000 fans fewer than visited the House That Ruth Built last year.) Even updating that to the 1998-2005 average, notes Steinberg, would knock millions of dollars off the revenue projections.

A bigger problem: ERA claims to have "only included spending by non-city residents who visit the city primarily to see a Yankees game." But it looks as if it didn't. To generate the report's projected $74 million a year in added ticket revenues solely from out-of-towners, the Yankees would have to average 63,000 fans a night—a neat trick in what would be a 53,000-seat stadium.

The report's other dubious assumptions include accounting for leakage in ticket sales, but not in food and souvenirs—so there's no adjustment for fan spending that gets shifted from local shopkeepers to the Yankees' vast new in-stadium concessions concourses. And Good Jobs New York reports that the report's promise of 900 new permanent jobs—the now-defunct West Side stadium for the Jets, by comparison, was projected at between 3,500 and 7,000 new jobs—overlooks the fact that some will be part-time and seasonal, potentially dampening the public's already meager return on its investment. In all, tax revenue from the $444 million project could amount to as little as $150 million.

"The way environmental-impact statements are done these days, it's like they're advocacy pieces," says Lukas Herbert, a city planner who serves on the Bronx community board that gave the stadium plan a thumbs-down in November. "You hire a firm like ERA and say, 'Here, put in some numbers and make us look good.' "

If the City Planning Commission approves the Yankee plan next month, it moves to the city council, where the two Bronx members whose districts would be affected, Helen Foster and Maria del Carmen Arroyo, have backed off their initial public support under pressure from neighborhood groups. But it remains to be seen whether the latest revelations will be enough to get the full council to go toe-to-toe with Bloomberg. "We can't even get our elected officials to read the environmental impact statement," says Herbert. "How can we expect them to read a highly detailed economic paper?"

Bloomberg's Gift Horse

Two Stadiums. No Waiting.
Yanks and Mets plans leave little room for public debate
by Neil deMause, March 14th, 2006 11:27 AM

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Compared with the long-running sagas of the West Side Jets stadium (born January 1999, died June 2005) and the Brooklyn Nets arena plan (unveiled December 2003, still not out of the starting blocks), Mayor Bloomberg's proposal to build new homes for the Mets and Yankees has whizzed by in a virtual blur. First announced during a whirlwind week last June as part of Bloomberg's last-ditch attempts to revive the city's flagging Olympic bid, the $1.8 billion twin-stadium plan is now scheduled to come up for a winner-take-all City Council vote on April 5.

Yet key details of the plans remain unresolved, leaving some neighborhood activists and good-government advocates wondering if the teams' rush to break ground is trampling on the need for open public debate. "The proposal to build a new Yankee Stadium is moving at warp speed, and nobody can get on this train," says Bettina Damiani of the subsidy-watch group Good Jobs New York. "The New York Stock Exchange subsidy deal didn't move this quickly; even some 9-11–related projects didn't move this quickly. It's disconcerting, to say the least, how quickly this project is moving, and at the same time completely excluding the input of local community members."

The Yankees plan, which would demolish the House That Ruth Built and build a new stadium across 161st Street to the north, leaped out to a quick start last summer. Just eight days after Bloomberg's stadium press conference, and before most Bronx residents had even learned the details of the plan, the state legislature moved to "alienate" Macombs Dam and Mullaly Parks, 21 acres of which would be obliterated to make way for the ballpark. Before this could happen, the city council had to sign off on a Home Rule message endorsing the legislature's land grab. This message, however, arrived in the council "preconsidered"—the city's version of the state legislature's infamous "messages of necessity" that allow lawmakers to dispense with debate.

As a result, there were no public hearings, and according to council minutes obtained by Good Jobs New York, councilmembers never even discussed the issue. Meanwhile, the council's finance division provided members with a "Fiscal Impact Statement" indicating "no impact on [city] expenditures resulting from the enactment of this legislation"—though by the city's own admission, it will be on the hook for more than $135 million in land and infrastructure costs. (Both a Good Jobs study and an analysis by the Voice put total public subsidies, including tax and rent breaks, at more than $400 million—with about half of that coming from the city.)

The council unanimously approved decommissioning the parks. (Brooklyn arena opponent Tish James abstained.) Three days later, the state legislature passed its alienation bill, and the Yankees had their land.

"No alienation has moved as fast as the Yankees'," says Christian DiPalermo, executive director of New Yorkers for Parks. Coming on the heels of a similarly fast-tracked alienation to place a water filtration plant in Van Cortlandt Park, DiPalermo worries, taking parkland for private uses might become a pattern, especially as new restrictions on eminent domain make it more difficult to take private property for public projects.

With this crucial state legislative hurdle cleared, the project dove straight into the city's Uniform Land Use Review Procedure, put in place in the 1970s in response to the bad old days of Robert Moses's bulldozing of neighborhoods for "urban renewal." After a series of contentious public hearings—at one, stadium-backing Bronx borough president Adolfo Carrión was met with angry chants of "You work for us!"—Bronx Community Board 4 voted 16 to 8 in November to reject the Yankees plan. Under ULURP, though, community board votes are only advisory, and the City Planning Commission—which does have veto power—subsequently unanimously endorsed the project.

The city's draft environmental-impact statement, meanwhile—a 700-plus-page tome that, several Bronx residents have complained, is unreadable to the borough's many Spanish speakers—attracted a flood of citizen comments, which were mostly dismissed with a perfunctory wave of bureaucratese. (Sample text: "The commenter's assertion that the proposed project is 'laden with hidden public subsidies' is outside the scope of [this] analysis. . . . Neither the City nor the State will have any obligation to pay for construction of the new stadium. Thus, there are no hidden public subsidies.")

To some, this timeline points up the trouble with ULURP, which sets a strict seven-month window for public review before a council vote. "That may not be long enough to have a public debate about a major facility that's going to transform an entire area of the city," says Hunter College urban-affairs professor Tom Angotti.

It certainly hasn't been long enough to solidify the stadium plan itself, which remains in a state of flux. As just one example, the city Industrial Development Agency recently revealed that the cost of new parking garages has skyrocketed from $235 million to $320 million in the past four months. While $70 million of that will come out of the pockets of state taxpayers, the remainder is expected to be paid by as-yet-unidentified private developers. If no developer voluntarily comes forward—and the higher the price, the more it looks like a money-loser—the city could be left having to front this money itself.

Moreover, because Macombs Dam Park received funds under the federal Land and Water Conservation Program in the 1980s, the National Park Service still must certify that lost parkland is replaced by equivalent green space. In actuality, says Lukas Herbert, a Westchester city planner who lives near Yankee Stadium and serves on Community Board 4, "the replacement parkland that they're building is almost a mile away, and it's going to be difficult for senior citizens and kids to get there. Right now you walk out your front door, and the park is right there." Save Our Parks is considering a lawsuit over both the EIS failings and the federal park-replacement regs, but, says Herbert, "a lot of us are concerned that if the City Council approves it, they're going to go in and start tearing down trees."

The Mets project, meanwhile, virtually disappeared from the radar after Bloomberg's initial announcement last summer of a new 44,000-seat facility—about 25 percent smaller capacity than Shea Stadium, though roughly the same height—to be built in what's now the center field parking lot. Unlike the Yankees' series of ULURP hearings, the Mets plan has only a single public hearing to its credit so far: an Empire State Development Authority shindig that was held at four on a Monday afternoon, and drew all of six speakers.

"It was a farce," says Flushing community activist David Oats, who has long lobbied for an Olympic stadium in Queens. "Here's a huge, multimillion-dollar project that will affect New York City for generations, and they hold one hearing at four o'clock in the afternoon, and they don't even send out a press release?"

The city insists that the Mets plan doesn't need a fresh public review process because it already conducted an impact study back in 2001, when the project was set to sport a retractable roof and a different financing scheme. It's hard to say, though, since the Mets have still not released their designs for a new stadium, and official state documents indicate design schematics as "intentionally deleted."

The speed of the process has also left little time for the sort of intensive scrutiny that the Jets and Nets plans were subjected to, either by good-government groups or the press. The city Independent Budget Office hasn't weighed in on the fiscal impact of the baseball projects (the IBO's Doug Turetsky says "elected officials have not been coming asking about this"), and no public polls have been conducted, aside from one last July that found just 27 percent of New Yorkers would endorse a new Queens stadium if it cost $180 million in public funds. (The actual Mets subsidy, including tax breaks, would be closer to $400 million.)

The council itself mostly seems to be hoping the whole thing goes away without any tiresome public debate, especially after the tightly controlled Bronx Democratic machine lined up early behind the Yankees. Unlike with the Jets and Nets proposals, a local Bronx councilmember, Helen Foster, co-sponsored the Home Rule message OK'ing the parks grab. Foster recently declared she's not "ready to concede" to building a stadium in the park, while Maria del Carmen Arroyo, whose district actually includes the stadium site, is officially undecided; last Thursday's scheduled council hearing was abruptly postponed at the request of Bronx members, with Arroyo citing unspecified "concerns" that City Hall had yet to address. (Neither Foster nor Arroyo returned calls for this article.)

Jeremy Soffin of the Regional Plan Association, a veteran of the West Side wars, blames "stadium fatigue" after eight years and counting of sports facility squabbles, dating back to Rudy Giuliani's ill-fated gambit to move the Yankees to the West Side rail yards. Others insist that it's less about the timing of these stadium plans, and more about the color of their borough. "In no other community would they accept a stadium across the street from where people live, and accept parking garages to replace parkland," says Anita Antonetty, a Save Our Parks member and recording secretary for Bronx Community Board 4. "The process is just too fast, and the alternatives are not being explored at all."

The still larger concern, adds David Gratt of Friends of Yankee Stadium, is what sort of precedent this sets for future city projects. "The Bronx Terminal Market went through this way; the stadiums are going through this way," says Gratt, a former Department of City Planning staffer. "Developers now expect to finalize their deals by sitting down with the mayor's office, the borough president, and the council. And the process, which was originally designed to solicit public input, is being used to disregard the public."

Bloomberg's Gift Horse