Published on Tuesday, January 1, 2002 in the Long Island, NY Newsday
Giuliani Stadium Deal Is Corporate Welfare
by Matthew Carolan and Raymond J. Keating
RUDY GIULIANI was so close to leaving the New York City mayor's office as a singular leader. Alas, it was not meant to be.
On Friday, with less than four days left in office, Giuliani announced his costly deal to build new, taxpayer-subsidized ballparks for the New York Mets and Yankees. In the end, Rudy went out much like any other pandering, profligate politician.
Prior to the terrorist attacks of Sept. 11, Giuliani had a mixed record as mayor. To his credit, the crime rate tumbled and the city became a viable place to live and visit once again. But, while a few taxes came down slightly, much more could have and should have been done to provide substantive tax relief in what continues to be one of the nation's most overtaxed municipalities. Meanwhile, bloated city government remains and has even gotten bigger.
After Sept. 11, though, Giuliani proved to be a steady leader in a time of unimaginable crisis. As a result, he received much-deserved accolades from around the globe and was named Time magazine's "person of the year."
But, in his final days in office, Giuliani could not resist the lowly political temptation to spend other people's money on his own grand scheme. Giuliani proposed the biggest corporate-welfare deal in the history of professional sports.
Under the nonbinding agreement between the city and the Yankees and Mets, a total of $1.9 billion would be spent on a new Yankee Stadium in the Bronx and an Ebbets Field-like ballpark next to Shea Stadium. Both buildings, of course, would have all the bells and whistles that generate big bucks for teams, from retractable roofs to lavish luxury boxes. Under this tentative deal, the city and the teams would evenly split the $800-million estimated costs for each ballpark and the state would kick in $150 million on related infrastructure for each facility.
Not only would taxpayers in New York City and across the rest of the state subsidize multimillionaire team owners and players, but so would taxpayers across the nation. The municipal bonds that would be floated for the stadiums would pay interest free from federal taxes. So, in effect, federal taxpayers would be subsidizing the Yankees and Mets as well.
On Friday, Yankees owner George Steinbrenner blustered, "We're happy to be able to do this for New York." Meanwhile, Dave Howard, a Mets senior vice president, said the deal "demonstrates our love for the city and for our home borough of Queens." These guys are receiving billions of taxpayer dollars and they make it sound like they are doing something noble. Talk about arrogant.
And make no mistake, the only clear beneficiaries in this deal are the Mets and Yankees owners and players who are receiving taxpayer handouts. Giuliani either exhibited stunning economic ignorance or took part in shameful political deception when he declared, "This deal is a great boon to the city of New York, both for its economy and for our morale."
In reality, every legitimate economic study that has looked at the actual impact of sports teams and stadiums shows no positive impact for a region's economy, including no benefits in terms of more jobs, income or economic growth. Meanwhile, it's difficult to figure out how New York's morale would be boosted by the Mets and Yankees moving into new buildings next door to their old facilities.
In the end, as repugnant as the recipients of corporate welfare might be, ultimate blame lies with the unsavory politicians who take money from individuals and businesses in order to subsidize baseball owners and players.
Just before leaving office, Giuliani, the "person of the year," proposed the taxpayer giveaway of the century. Let's hope Mayor Mike Bloomberg can shake off any lingering dependency on Giuliani and throw this corporate-welfare deal out of the political game.
Matthew Carolan is the news editor for interactiveweek.com. Raymond J. Keating is chief economist for the Small Business Survival Committee.
Copyright © 2001, Newsday, Inc.