NY Yankees tax-free debt approved, comptroller opposes

By Joan Gralla

NEW YORK (Reuters) - The New York Yankees baseball team will get the benefit of $372 million more public bonds for its new stadium, the city comptroller said on Friday, after casting the only vote against the city''s debt plan.

Comptroller William Thompson said in a statement he believed the city had squandered a chance to extract better terms from the team, noting the team''s new Bronx home will "inevitably cost city taxpayers hundreds of millions of dollars more than initially expected."

Thompson, one of several Democratic candidates for mayor in 2009, previously voted in favor of the deal, under which a city agency sells stadium bonds for both the Yankees and Mets, New York''s two Major League Baseball franchises.

But the comptroller has since reversed course, urging the agency, called the Industrial Development Authority, to delay the vote, saying the costs of new parkland and infrastructure were "grossly underestimated."

A request by the Mets on Friday for $82 million more in tax-free debt for their new stadium was also approved.

Thompson blasted Mayor Michael Bloomberg, who is seeking a third term as an independent, saying: "These costs did not grow solely because of increased labor and materials as was represented by the Industrial Development Authority at yesterday''s public hearing, but rather because of incompetence or an intentional attempt to mislead the public."

Asked whether Thompson would sue to block the debt sale, an aide said only that he was reviewing all options.

City comptrollers must approve municipal bond sales. Former Democratic Comptroller Alan Hevesi used this authority to thwart then Mayor Rudolph Giuliani, a Republican, from partly privatizing the city''s water system.

A city agency spokesman faulted Thompson for not recognizing that the deal takes advantage of a federal program permitting this kind of debt, adding the stadium "will result in New York City getting back more tax revenue than it will cost and the South Bronx getting thousands of new jobs and more than $1 billion in private investment."

The Yankees have noted their decision to stay in one of the country''s poorest urban areas will strengthen it.

Both teams will repay the new debt, to be sold in February, using money they otherwise would have owed in property taxes.

The Yankees also could get more than $100 million of taxable debt sold for them and a small refunding.

Critics say the Yankees deal drains money from the city that it badly needs during the recession. The team, one of the sport''s most profitable, has already received $968 million of mostly tax-exempt bonds sold on its behalf.

Many aspects of the financing, from the new Yankee Stadium''s increasing costs to soaring ticket prices have also drawn hackles.

Democratic Assemblyman Richard Brodsky, who says the stadium deal will cost taxpayers $4 billion, on Friday said his probe of the deal will continue.  Continued...