Today’s 4 p.m. panel “If You Build It, They Will Come: A Discussion on Stadium Construction,” was kicked off by Katherine Baynes, a partner at DLA Piper LLP. Ms. Baynes discussed the financings for the new Yankee Stadium and Citi Field. She stressed that although the Yankees and Mets did initially receive some municipal assistance, the construction of the stadiums were ultimately financed by the teams. Despite what many politicians and New Yorkers may claim, the Mets and Yankees are in fact repaying PILOT bonds issued for construction of the stadium. The Mets and Yankees sold tax-exempt backed by payments in lieu of property taxes, lease revenue and installment payments to finance the construction of Citi Field and Yankee Stadium.
She explained that PILOT payments cannot be greater than actual taxes and due to new regulations, can no longer be issued at a fixed rate payment. Baynes discussed how the Treasury Department recently issued more restrictive final regulations for bonds back by payments in lieu of taxes. However, the rules contain a transition provision that appear to enable the Yankees and Mets to continue to issue PILOT bonds as planned without having to comply with the new rules.
Joseph Gunn, Counsel for the New York City Corporation Counsel hit it out of the park with his discussion on the environmental impact of stadium construction on local communities. He discussed the fact that public parks are dedicated to and preserved for public use and are therefore governed by the Public Trust Doctrine, which offers legal protection to parks and public land. He further noted that legislative authorization is necessary for the alienation or discontinuance of parkland. If alienation or discontinuance of parkland occurs, the municipality is required to replace the parkland with other parkland. In other words, the government is required to maintain the same amount of parkland for the public’s reasonable use. This is precisely what happened with the construction of both Yankee stadium and Citifield; every inch of parkland displaced by the construction of the new Stadiums was replaced.
Accordingly, Gunn discussed the function of the Uniform Land Use Review Process (ULURP) which requires that the disposition of public property project [the stadium projects] be subject to public review by community boards, borough boards, and city council. For each new project, an Environment Impact Statement is drafted and compiled by consultants who analyze every environmental issue in order to successfully mitigate challenges to the project. The Statement usually discusses environmental issues from historical structures, to water and air pollution. Gunn explained that the most challenging aspect of the Citifield negotiations involved the traffic and pedestrian impact of the project on the community.