Jets Stadium and Madison Square Garden

A football stadium for the New York Jets was to be one of Mayor Bloomberg's biggest development projects. After much controversy, in 2005, the stadium proposal was defeated. But the area of Hudson Yards, the area surrounding where the city proposed the stadium to be, is in the midst of a massive commericial and residential development plan. Read a brief by the Fiscal Policy Institute to learn more about the extensive subsidies still planned for this development. 

Hudson Yards

Even though the stadium never came to fruition, GJNY believes the proposed subsidies are worth documenting as the amount of subsidies were historical (at the time) and expected to have wide-ranging impacts on economic development policy.

The project as initally proposed would be one of the largest TIF districts in the United States.

In February 2004, then Deputy Mayor Daniel Doctoroff and Budget Director Mark Page outlined the following details of a West Side financing proposal:

  • The Hudson Yards Infrastructure Corporation would be established to issue bonds that would generate revenue to extend the No. 7 train, build a platform over the Hudson rail yards, and prepare sites in the area for commercial and residential development.

  • Bonds would be issued over the next ten years,  starting with a $470 million bond sale in 2005.
  • The Corporation would issue $2.77 billion in long-term revenue bonds and $900 million in commercial paper (short-term debt). The short term debt would be used to pay interest on the long term debt.
  • In order to pay back bondholders, the city would use funds raised from a blanket Payment In Lieu Of Taxes (PILOT) arrangement with all developers that come to the area. Instead of paying certain taxes to the city, the developers would pay into a fund designated specifically to repay the debt issued to develop the area. (This would have been the first Tax Increment Financing arrangement inthe city. Additional city funds would be raised from the development of the Eastern rail yards, sale of public property within the site, bonus payments for air rights, payment in lieu of sales taxes.
  • Goldman Sachs, Bear Stearns, and JP Morgan Chase were chosen to underwrite the bonds.
  • Financing plans for the Jets stadium platform (estimated to cost the public $600 million), stadium roof and the Jacob Javits Center expansion (estimated to cost $1.4 billion) will be announced separately.
  • The City Council must approve a rezoning of the area, and the City must buy development rights for the rail yards from the Metropolitan Transit Authority.

 

After increasing oppostition from community leaders, in 2005 the stadium project failed to win the approvals of the Speaker of the Assembly, Sheldon Silver and then-Senate Majority Leader, Joseph Bruno two of the three voting members of the Public Authorities Control Board.

Madison Square Garden

Near Hudson Yards is the world famous Madison Square Garden--like most stadiums and arenas in the country--which receives a substantial property tax break. According to the city's Tax Expenditure Report, MSG is expected to receive a property tax break of $15.1 million in FY 2012

Read GJNY's 2005 testimony2008 testimony and 2014 testimony to the City Council hearing on Madison Square Garden's property tax exemption.