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The Internal Revenue Service (IRS) issued two private letter rulings to New York City Industrial Development Agency (IDA) confirming that the IDA may proceed with issuing tax-exempt governmental bonds to be used by the Yankees and Mets to construct new stadiums. The favorable rulings follow authorization by the IDA Board earlier this month for the financing of both stadiums. Seeking a private letter ruling from the IRS is not unusual in large project or structured financings in order to provide certainty on the tax analysis of a transaction. The ruling related to the Yankees project was received on July 12, and the ruling related to the Mets project was received today.
“At the heart of the Bloomberg Administration’s economic development strategy is the goal to create jobs and spur private investment in all five boroughs, and these state-of-the-art ballparks will go a long way to do that,” said Interim IDA Chairman Joshua J. Sirefman. “I’m glad the IRS confirmed we could help make these projects happen by authorizing tax-exempt bonds, the result of which actually will mean increased tax revenue for New York City.”