A while back we blogged about the New York Times story reporting the eye-popping deal between the New York Yankees baseball team and the City of New York (The Free Lunch – Literally, Nov. 30, 2008). After giving the Yankees over $300 million for the construction of their new stadium, the city folks demanded a luxury box and a free lunch (literally – free food to be available to the city’s occupants of the box and their guests). The Yankees resisted the city’s demand but gave in when it was suggested that the city would withhold approval of municipal, tax-free bonds to be used to pay for the stadium, which according to the New York Times, would enable the Yankees to pay tens of millions of dollars less in interest since interest payments to holders of such bonds are exempt from city, state, and federal taxes, and therefore they pay interest that is lower than interest paid by taxable bonds.
Now, the New York Times reports (David M. Halbfinger, Yankee Stadium Subsidy Becomes Mayoral Campaign Issue, N.Y. Times, Jan. 14, 2008, at p. A23) that the city folks have evidently concluded that such a conspicuous display of municipal high living may not be a good idea, given the rapidly deteriorating economic situation. So a new deal – no pun intended – was struck. The city “announced that it would give the luxury box back to the Yankees in exchange for $100,000 a year.” The Yankees expect to recover at least $550,000 for the city by reselling the box on the open market, but the $100,000 was a ‘sign of good faith’ in case the luxury-suite market collapsed.
Oh, we almost forgot. The New York Times has responded to all this with a scathing editorial (Whatever Yankees Want, N.Y. Times, Jan. 15, 2009, at p. A26), noting that “the total $362 million price tag to the city has almost doubled since the project was announced in 2006. And according to the Independent Budget Office, the price dwarfs the $318 million the city will provide for the Mets’ new stadium across town.”
Precisely what the Founding Fathers must have had in mind when they inserted that “public use” clause into the Constitution.
Ain’t law just grand?