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Projects Will Create More than 15,000 Construction Jobs and Spur More than $1.5 Billion in Private Investment in the South Bronx and Flushing Queens.
New York City Industrial Development Agency (IDA) today granted preliminary approval for financing assistance for the New York Yankees and New York Mets to allow the teams to build new, state-of-the-art stadiums adjacent to the existing ones. The projects, which bring more than $1.5 billion in private investment to the South Bronx and Flushing Queens, relieve the City from having to pay maintenance and capital repair costs that would have exceeded rent payments by more than $113 million over the next 40 years for both stadiums. The teams, not the City, will be responsible for maintaining the new stadiums. The repayment structure for the tax-exempt bonds for both stadiums will be submitted to the City Council for approval. IDA will also provide financing assistance to help a real estate developer build a retail complex parking garage in East Harlem and two not-for-profit organizations expand in Brooklyn and the Bronx. IDA is administered by the New York City Economic Development Corporation.
“The Yankees and Mets are tremendous assets of New York City, and I’m pleased IDA will help them replace their deteriorating stadiums with new, state-of-the-art ballparks, bringing new jobs and private investment in areas of the City that really need both,” said IDA Chairman Andrew M. Alper. “Both projects are part of larger, area-wide revitalization plans – the Yankees in the South Bronx and the Mets in Flushing near Willets Point – that will help increase the economic vibrancy of the neighborhoods and create valuable jobs.”
IDA will issue about $930 million in tax-exempt and taxable bonds to build the new stadium for the Yankees. Of that, $866 million is expected to be in tax-exempt bonds and $64 million in taxable bonds. The bonds will be repaid solely from payments made by the Yankees. The tax-exempt bonds will be payable from Payments In Lieu Of Taxes or PILOTs, a structure that will be submitted to the City Council for approval. The taxable bonds will be payable from rent payments made by the Yankees. IDA also intends to use exemptions from real property tax, mortgage recording tax and sales tax in connection with the project. In addition to relieving the City of its obligation to pay substantial maintenance and capital repair costs, the new stadium is expected to generate about $96 million more per year in direct and indirect tax revenue than the City would have received from the team without it. The project will result in roughly 9,700 construction jobs and 900 permanent jobs.
For the new Mets stadium, IDA will issue about $632 million in tax-exempt and taxable bonds. It is expected that $528 million of that will be in tax-exempt bonds and $104 million will be in taxable bonds, both of which will be repaid in the same manner as with the Yankees – through PILOT payments (subject to City Council approval) and direct rent payments. IDA intends to use exemptions from real property tax, mortgage recording tax and sales tax in connection with the project. The new stadium, which will result in about 6,100 construction jobs and 970 permanent jobs, is expected to generate about $61 million more per year in direct and indirect tax revenue than the City would have received from the Mets without it.
The IDA Board also approved financing assistance to help Tiago Holdings, a joint venture between Forest City Ratner Companies and Blumenfeld Development Group, build a new parking garage for the planned East River Plaza, a five-level retail complex in East Harlem within the Upper Manhattan Empowerment Zone. IDA will issue about $40 million in tax-exempt Empowerment Zone Facility Bonds. The garage alone is expected to result in 24 new jobs. In total, the retail and garage portions are expected to cost about $320 million.
Wartburg Lutheran Home for the Aging and Wartburg Nursing Home, not-for-profit organizations that provide healthcare services to the elderly and disabled, was approved for about $20 million in tax-exempt bond financing and a mortgage recording tax benefit of $546,000. The organization plans to renovate its main building on Sheffield Avenue in Brooklyn to create a new 30-bed Medicaid Assisted Living section of the facility. Wartburg will also use the bonds to refinance existing debt for two existing nursing homes. The organization expects to add 15 new jobs to its existing workforce of 357 as a result of the project.
The College of Mount Saint Vincent, a not-for-profit college in the Riverdale section of the Bronx, was approved for $22 million in tax-exempt bond financing and a mortgage recording tax benefit of $615,000. The school, which plans to increase its enrollment, will use the financing assistance to expand and upgrade its facilities, including building a new residence hall and renovating two others. The school will be able to offer more financial aid packages and lower tuition costs, increasing enrollment, as a result of the project.
“The projects approved for financing assistance today represent the diverse range of businesses and organizations that IDA helps to improve their facilities, expand their services and create new jobs,” said Steven M. Berzin, IDA Executive Director. “Part of our job is to use public dollars to catalyze private investment, and all told, the projects approved will result in private investment of nearly $2 billion in the Bronx, Queens, Brooklyn and Harlem.”
The New York City Industrial Development Agency provides financing assistance to businesses, including small industrial and manufacturing companies and not-for-profit organizations. IDA is a conduit agency that issues tax-exempt industrial revenue bonds to assist eligible commercial, industrial, not-for-profit and other qualified entities to finance expansion opportunities. IDA also offers qualified companies abatements on sales, real estate and mortgage taxes. To request information and details on IDA programs, call (212) 312-3600 or e-mail firstname.lastname@example.org.