Announcement

Collapse
No announcement yet.

Dollars And Sense: The New Shea Stadium

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Dollars And Sense: The New Shea Stadium

    Today, let's take a look at a case study, one that's been largely flying below media radar: the New York Mets' plan to knock down the House that Marv Throneberry Built and replace it with a new, modern facility in what's currently the parking lot beyond the Shea Stadium outfield wall.

    The Mets revealed the expected price tag on their dream home last week, and it was surprisingly modest: a mere $444.4 million for the stadium itself, $600 million counting land and infrastructure ... the state's Empire State Development Corporation proudly proclaimed, the "Shea Stadium Area Revitalization Plan" will have all stadium construction costs paid for by the Mets' owners.

    The first discount the Mets will be getting on their stadium costs is the revenue-sharing deduction that I've previously written about in this space. One can debate whether this is a clever dodge of baseball's attempts to level the playing field for low-revenue teams, or a way to reclaim money that's rightfully theirs ... fair or foul, it reduces their effective costs.

    For high-revenue teams like the Mets, the revenue-sharing rate is about 39%, so deducting $444.4 million--actually deducting annual bond payments over the next 30 years, but it comes to the same thing--will recoup Fred Wilpon $173.3 million.

    $444.4 million
    -$173.3 million
    ---------------
    $271.1 million

    On top of this, while the Mets may not be getting up-front stadium cash from the public, they will be getting plenty of help on the back end to defray their expenses. For starters, the team currently pays about $3.9 million a year to the city in rent; those payments would be waived under the new stadium plan, for a net present value of $54 million for the team.

    Wilpon & Co. would also collect rent rebates of $5 million a year for the next three years, to ease the pain of playing in Shea Stadium while the new building is going up next door. And while most development projects in New York's outer boroughs get off-the-rack 15-year property tax breaks, the Mets would pay no property taxes on their new Queens home for twice that long, for a present-value bonus of about $39 million.

    $271.1 million
    -$54 million
    -$15 million
    -$39 million
    ---------------
    $163.1 million

    Finally, one last item. One of the advantages of building the new stadium next door to the old one is you can still use the same parking lots. (The spaces newly occupied by the stadium would be replaced with new acreage opened up by the demolition of Shea.) The revenue from these lots, however, would be dealt with differently: The Mets would get to keep the first $7 million a year in parking revenues, money that currently goes to the city. After revenue-sharing, this would leave the ballclub with an extra $4.3 million a year, for a present value of $58.6 million.

    $163.1 million
    -$58.6 million
    ---------------
    $104.5 million

    Suddenly, what looked like a $444.4 million expense for the Mets--which would have been a larger private contribution than any prior stadium in baseball history--has become a far more manageable $104.5 million, right in line with what other teams have paid of late. The public, even by the state's own optimistic economic projections, would be left with a minimum of $178 million in red ink after paying for land and infrastructure, plus all those tax and rent breaks.

    http://s13.invisionfree.com/Amazin_Mets

Ad Widget

Collapse
Working...
X