INDEPENDENT BUDGET OFFICE
The City of New York
110 WILLIAM STREET, 14TH FL., NEW YORK, NY 10038
|Embargoed for Release
April 30, 1998
|Contact: Herbert Block
pager: (917) 788-5864
* NEWS RELEASE *
New Stadiums for the Yankees and Mets?
Economic and fiscal benefits would be limited according to IBO report
A new study, Double Play: The Economics and Financing of Stadiums for the Yankees and Mets, issued today by the Independent Budget Office (IBO) finds that:
"With both the Yankees and Mets presently negotiating with the city for new stadiums, an historic opportunity exists to ensure that any public funds used to construct the stadiums are proportionate with the fiscal and economic benefits accruing to the city," said IBO Director Douglas Criscitello. "While most of the professional sports stadiums in use today were built with substantial amounts of public funds, the trend in recent years has been toward increased contributions from private sources, including team owners. Hopefully, New York City can follow the lead of cities like San Francisco and work to ensure that its teams have top quality facilities at little cost to the taxpayer."
Throughout the country, the limited number of Major League Baseball teams has given franchises considerable bargaining power in their stadium negotiations. In New York City, however, it is highly unlikely that either the Yankees or the Mets would leave the area altogether because of the tremendous media revenues available in this media market. Moreover, even if either of the teams relocated outside of the city’s boundaries, the fiscal and economic disruption to the city would be limited. Accordingly, New York City¾ unlike smaller cities¾ is well positioned to drive a hard bargain.
The 18-page report includes a discussion of potential financing choices to construct or refurbish stadiums, including Mayor Giuliani’s proposal to create the New York Sports Facilities Corporation to fund the city’s contribution to the construction of city-owned sports facilities. The city’s decision on how much to spend on new stadiums must be viewed in the context of the city’s other spending needs and its overall fiscal condition. Decisions on how best to allocate resources must be made regardless of whether the city finances the stadium on a pay-as-you-go basis, as proposed by the Mayor, or through the issuance of bonds.
"IBO’s economic and fiscal impact estimates do not distinguish between building at the present site of Yankee Stadium and building in Manhattan," said Criscitello. "Research on stadiums consistently finds that there is no basis for forecasting an economic development impact beyond that generated by the local expenditures of the team and its fans. In particular, none of the studies suggest any economic rationale for assuming that building any new stadium would by itself spur construction of office towers and hotels."
"While the limited economic benefits that would likely materialize may justify some expenditure of public funds, very substantial contributions from private sources¾ primarily the teams¾ would be required to make the new stadiums a fiscal winner for the New York City," added IBO’s Chief Economist Ronnie Lowenstein.
Established in 1996 pursuant to the New York City Charter, IBO provides nonpartisan analysis to both elected officials and the public on fiscal and budgetary issues facing the city. Copies of the full report are available by calling (212) 442-0632, writing to the Independent Budget Office, 110 William Street, 14th Floor, New York, NY 10038, or by accessing IBO’s website at www.ibo.nyc.ny.us.
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