Subsidizing the Big Boys in New York

A while back we blogged about the city of New York giving huge amounts of money to baseball teams like the Yankees and the Mets for stadium construction. And then, of course, there is the new stadium that is being built in Brooklyn as part of the notorious Atlantic Yards project. So we figure that this was all part of the old Roman technique of panem et circenes — bread and circuses — that Roman emperors provided to the plebeians to divert their attention from the ongoing decline and ultimate fall of ancient Rome.

We figured that, though not pretty, this was understandable because there is much going on in New York City from which, by the lights of New York politicians,  attention of the populace needs to be diverted. But for all our curmudgeonly cynicism, we hadn’t even begun to understand the degree of municipal corruption going on in the Big Apple.

The light started dawning as we read Jim Dwyer’s column, About Town, in yesterday’s New York Times – Companies We Keep, And Pay For, May 16, 2010, at p. 22 (News Section). The basic racket involves a big New York based company letting it be known that it is contemplating moving out of the city, like the New York Stock Exchange did a while back. Thereupon local politicians rush in with bags of public money to induce the company to stay in New York, and in some cases — like those of the New York Times and the NYSE — offering to take by eminent domain some land for these worthies’ new buildings. But that, it now appears, only scratches the surface. You ain’t seen nothin’ yet.

 Dwyer begins by noting that the big, fancy publisher Conde Nast got $10.8 million in rent and tax breaks to move into a Times Square tower that was already heavily subsidized, and is now said to be having discussions with government officials about relocating downtown, into the tower planned as 1 World Trade Center. The Port Authority of New York and New Jersey has agreed to provide $1 billion in financing for the building.

It turns out that New York has been subsidizing some real biggies — outfits you’d think are the last ones to qualify for public handouts. In Dwyer’s words:

“Many of the threats to leave were barely disguised feints, and  sometimes not even that. Conde Nast, for instance, publishes some of the most exalted titles in the magazine business, and the chances that the company would move out of Manhattan are slim to none. Other businesses equally unlikely to  to leave the media capital — The New York Times Company, CBS, Reuters, NBC, News America, ABC, McGraw Hill, Viacom, Hearst — were also given public money.

But most of the recipients, especially of the larger deals, were in the financial industry. Goldman Sachs was given $650 million in city and state subsidies to build Battery Park, and JPMorgan Chase was awarded $240 million for space in Lower Manhattan. Others that have been given public subsidies include the American International Group,, or A.I.G.; Credit Suisse; Bear Stearns; Merrill Lynch; Bank of America; Citicorp (now Citigroup); Morgan Stanley.”

Your tax money at work.

For the full text of Dwyer’s column go to http://www.nytimes.com/2010/05/16/nyregion/16about.html

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