miss representation

So Randy Levine wanted a better television, and you (and I) ponied up another $370 million. I’ve heard of overcompensation, but even for an outfit that spends $240 million on new payroll in a week, this is still an impressive bit of mid-life crisis outlay. I want to meet the 20 year-old he’s trying to impress, because s/he must be fine.

If would be unfair to use the ‘hat in hand’ analogy to describe how the Yankees get money from anyone. Turning us upside down and shaking the every last bit of change is more accurate, provided they make pants that can hold a billion quarters.

The ‘value’ of sports stadia is no longer an open question. In the past ten years of data collection and number crunching, no one has provided any solid argument that the investment is a net gain for the region that funds a project. For the Yankees one component of this ‘privately’ funded sinkhole is a city-built parking garage, now estimated to cost $170 million (the city will lease it to an operator, so hard revenue from this investment is unclear — the new garages will create more parking inventory, but no one knows if more people will drive to the games, and it is unlikely any operator will opt for a fixed amount, since the garage will produce very little non-game day revenue), so the net cost is still murky. Beyond that, the city is touting that it will create 20 permanent jobs. That’s right: 20. The city is spending $425,000 a year (over 20 years) to create each position.

The failings of this sordid tale are well documented. Here are some of the highlights: Giuliani signed off on a rent credit of $5 million a year for each year the new stadium was under construction for ‘development costs’. Those monies paid for the lobbyists and lawyers required to structure this deal, which required a ruling by the one-time IRS (that was questioned by Congress), the patching together of a Bronx-specific special-entity ‘community benefit’ non-profit to qualify for the bonds (the sole member of which is a non-profit located outside the city that has done no business other than generate bonds for similar projects outside the state). The other direct investment elements (including a promise to replace parkland that has been unavailable to the community that was seized to start construction) are behind schedule, and over budget — one drastically so, since the initial estimate did not include costs for the interior.

Aside from the initial handout from Rudy, which the team did not utilize to their full extent, the Bloomberg administration (with lots of help from the Bronx machine and the state) has overseen all the successive backtracks and overruns. The incrementalism at play is depressingly familiar: push the available financing as far as you can and then backload the budget. Once the money runs out, blame everyone but yourself and plead ‘out of scope’. Some of the ‘revisions’ are upgrades to seating and enclosing the press box. This coming at a facility that already planned to include a Hard Rock Cafe and steakhouse.

What is important to note here is that the stadium is free to the Yankees, no matter what. The MLB has a revenue sharing agreement (that sounds like it would run afoul of anti-trust regulations, doesn’t it? Oh, right). The Yankees are the highest revenue team in the country, and their out-sized payroll also mandates a “luxury tax” be assessed, which also feeds into the sharing pool and all but insures they will always be on the contributing end of the spectrum. But capital expenses (such as a new stadium) are deducted from the revenue sharing contribution. As we sit and marvel at contracts such as were provided to C.C. Sabathia and Mark Teixeira maybe we shouldn’t be impressed with the front office gumption, but the back room deals, which get us coming — the best estimate at direct public investment is nearing half a billion dollars — and going: the Yankees will get to increase ticket prices, reduce eliminate rent payments and deduct any pesky bond payments from a revenue sharing number that would be fixed no matter who paid for the new jernt).

Or, put another way: the Yankees are using public money (see Page 38 of the PDF) — obtained via bond programs structured to increase public benefit — to artificially reduce its revenue sharing contribution and increase profitability. They literally can’t lose. Maybe Randy Levine should be coaching. Lord knows writing $200 million checks on the field hasn’t had any perceptible benefit.

So the fish market is moving. Maybe. There has been some talk, but nothing specific has happened this week, only stray notices here and there, people dusting off oft-used paeans to the dwindling manufacturing base, finding the most colorful anecdote they can, and you can practically hear the syrupy violin music accompanied by the long dissolve.

The reason it occurred to me was a recent afternoon reading Phillip Lopate’s Waterfront: A Journey Around Manhattan (a good book, though such an arbitrary structure means the concept gets thin in places — a danger this site is acute aware of — and the word peripatetic is a little overused), which has a chapter on, yes, the Fulton Fish Market (replete with the ubiquitous Dave Pasternak, proprietor of Esca, and go-to figure when one wants a good pull quote on crudo). It’s as a good as any other, though somehow he missed the cigarette woman. Written four years ago, it takes a decidedly skeptic position on the likelihood of the relocation, which has been discussed, planned for, and even, at times, seemingly underway for most of the last century.

No longer dependent on the river as a source of inventory, the market succeeds for the same reasons any established business does: traditional, efficacy, and a presumption of superior quality, prices, and not wee bit of color. Oh, yes, and the mob. That always minimizes competition. The culture of these places gets confused in the external reading: middle class appropriated nostalgia and envy reduces the image we understand to cutouts and stereotypes. With every bland desk job in danger of shipment off to far away lands where they have better grammar and lower wages, the middle-managers of industry and media flatten every backbreaking schlub into an old salt with a clever nickname, and then attempt to jettison their workplace.

What occurred to me in reading the article was: I don’t understand why it has to move. Isn’t it the perfect definition of mixed use? Hardly anyone is ever around to actually see it, it provides jobs, a reasonable service (being proximate to most of their important customers), and is centrally located (allowing only for its unique hours of operation). Most importantly, it makes Manhattan look like, well, Manhattan. The only shred of authenticity in the abysmal failure that is the South Street Seaport, what kind of renaissance are we to expect once it’s gone? An additional outpost for Lids? There are the standard complaints: noise, mob influence, but mostly the smell. Ooh, the smell of fish. Strange thing, that, right next to the ocean. Yes, it can be gamey in places, but I regularly walk and jog that route, and once the market goes, they aren’t going to remove the pier currently operated by the sanitation department, and I’ve gone by trash compactors at the housing complexes that line South Street and there’s no lack of competition there for the aromatic. And I don’t know if anyone has noticed, but the smell of offal (and I’m not talking C-List models and IB-guys) hasn’t tempered the wild success of the other major food market/entertainment destination in the city.

You can’t manufacture scenes, especially in New York. Times’ Square worked because it was a destination that simply had all the culture scrubbed away. The South Street Seaport was never a logical tourist locale, and whatever Rouse thinks they are good at, they aren’t good at it here. If it weren’t for the fish market, most of us would probably forget that it is even there.

I’ve never been to the fish market. I probably never will, even if it doesn’t move next week. But that’s because I wouldn’t do much besides gawk and hope to see some bit of local color myself. I don’t need that any more than those who actually do work there. Because it’s not a Disney ride, but people trying to hold down a job, pay the mortgage, and not get a crippling disability in the course of carrying around frozen hunks of fish. But it is more of what we think of our town than any sanitized corporate sports bar experience, and I don’t understand the urgency to blot it out.

Only $100 million dollars. That’s the cagey sell from the only convict to own a baseball team. So we should trust his word. Anyway, just as the RPA observed when they opined that investing in the Jets stadium, one of the oft hidden cost to team subsidies is that, like whiny teenagers, when you hand money to one of them, the other ones put their hand out. So we’ve got Bobby angling for $600 million, Brucey making his way towards about $200 million, which makes the fairest of them all, George, seem like the cute and precocious one (sort of like the Oliver of New York owners). Figure that the Dolans and Fred Wilpon can squeeze the city for at least that much (and what about the Giants? when do they get theirs?), we’re looking at over a billion dollars to help out businesses that all make a profit, even by the shady accounting practices they employ, and that aren’t going anywhere. No chance. This isn’t Baltimore, fer chrissakes; each one of those teams would lose half their market value outside of this metro area. Local television contracts, higher ticket prices, and increased merchandising sales are calcuable amounts, not the speculation of some blowhard in the back pages of the Post whining about the Dodgers and heartbreak.

The details are fuzzy: the city and state would pitch in for a new Metro-North stop, and highway improvements, but the status of the existing stadium is unclear: it might be parking lot, it might not. If not, the team isn’t planning to build one. No one says if the city’s portion includes cost of a parking structure. No one says how maintenance and upkeep of the unused stadium will be finanaced. No one is even bothering to justify the revenue grab this callously represents: even though the Yankees have the highest attendance in baseball, they are cutting 6,000 seats in this plan, since the benefit of luxury boxes will more than make up for sticking it to those who brought you. The kicker is that the Yankees won’t be paying for any of it. They will instead get credit against their revenue sharing contribution to MLB, getting to subtract the $40 million debt service from their yearly Bud Selig induced tax; last year, their share was $60 million, which means, basically, that if they hold steady with earnings, they could pay for all of the new stadium. So the city is hedging the Yankees future earnings potential (which is further offset by the fact that if the Yankees earnings dropped enough, they would get a net benefit from revenue sharing). Man, with deals like this, its amazing George was so sloppy as to get arrested.