Sunday, November 30, 2008

City Pressed Hard for Use of Luxury Suite at Yankee Stadium by David W. Chen -

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Some tough negotiations led to the City of New York’s obtaining the right to use a luxury suite at the new Yankee Stadium. Uli Seit for The New York Times

The Bloomberg administration was so intent on obtaining a free luxury suite for its own use at the new Yankee Stadium, newly released e-mail messages show, that the mayor’s aides pushed for a larger suite and free food, and eventually gave the Yankees 250 additional parking spaces in exchange.

The parking spaces were given to the team for the private use of Yankees officials, players and others; the spaces were originally planned for public parking. The city also turned over the rights to three new billboards along the Major Deegan Expressway, and whatever revenue they generate, as part of the deal.

The e-mail messages between the aides to Mayor Michael R. Bloomberg and Yankees executives were obtained and released by Assemblyman Richard L. Brodsky, Democrat of Westchester, who questions whether taxpayers were adequately protected in the city’s deal with the team.

Mr. Brodsky said what emerges from the e-mail correspondence is a sense of entitlement ingrained in Bloomberg officials. He said that the city appeared to be pushing for use of the suite for not just regular-season games, but for the playoffs and the World Series, and for special events like concerts, too.

“There’s this ‘Alice in Wonderland’ quality to the question of, what is the public interest here and who’s protecting it?” said Mr. Brodsky, who conducted a hearing on the issue of public financing of sports stadiums this summer. “We can’t find the money for the M.T.A., or schools, or hospitals, and these folks are used to the perks and good things of life, and expect them.”

The city maintains it was simply trying to obtain a luxury suite comparable to that given to other cities involved in stadium or arena projects. But the message traffic, which dates to January 2006, raises questions, too, about how sincere city officials were when they recently stated publicly that the box could be used to reward outstanding city workers, rather than mainly for the mayor, dignitaries and aides. The notion of inviting city workers as guests is not mentioned in the e-mail messages until Aug. 7, 2008, and only then in response to an inquiry from a reporter.

The city’s push for the perks has been known, at least broadly speaking, since Mr. Brodsky began raising questions earlier this year about the stadium deals for the Yankees and Mets, from whom the city also secured a luxury box. But the e-mail messages offer a revealing snapshot of the behavior and marching orders of the people involved in the deal for the construction of the billion-dollar Yankee Stadium.

It is hard to determine the precise value of what the city gave the Yankees as part of the exchange. The public parking, though perhaps a convenience to those who drive to the stadium, was to be run by a parking garage operator, not the city, before it was turned over to the Yankees for team use. The billboards would most likely generate about $750,000 annually, given their location. The Yankees are expected to charge $600,000 to $850,000 a year for stadium luxury suites, according to reports.

The project required permission from the Internal Revenue Service because of the team’s desire to use tax-exempt bonds to finance construction. In one heated exchange, city lawyers threatened they would not make the request to the I.R.S. for the use of the tax-exempt financing unless the Yankees would consider providing the luxury suite.

Lonn Trust, the Yankees chief operating officer, wrote to the city on Jan. 26, 2006: “For clarity, no seats, no suites, no tickets, and as they say in Brooklyn ‘No nothin’.’ ”

In response, a lawyer for the city, Joseph Gunn, warned that “No nothin’ can go both ways,” adding that if the luxury suite was not included, “We do not submit the letter ruling request.”

“Suite negotiations between the city and the New York Yankees were part of lengthy discussions with the city involving a whole host of different deal points,” said Alice McGillion, a spokeswoman for the Yankees.

At another point, raw personal feelings emerged, as evidenced during this exchange, starting June 29, 2006, between top city officials about Randy Levine, the Yankees president.

“If we want a deal on the suite, he wants 250 spaces,” Seth W. Pinsky, then the executive vice president of the city’s Economic Development Corporation, wrote to Daniel L. Doctoroff, a former deputy mayor. After Mr. Doctoroff did not respond, Mr. Pinsky, a bit sheepishly, wrote the next day: “It comes down to how much we’re willing to rely on Randy’s word.”

“Let’s not give,” Mr. Doctoroff replied. “I don’t trust him.”

Another theme that emerges is Mr. Bloomberg’s interest in the stadiums. In one e-mail message on July 5, 2006, about the Mets’ new stadium, Mr. Pinsky noted: “This is a big issue to the mayor.”

David Lombino, a spokesman for the city’s Economic Development Corporation, cautioned against reading too much into the e-mail messages.

“Securing the option to use a box at the stadium was one part of a much larger, comprehensive negotiation where we sought the best deal possible for the city,” he said. “Our goal was to make sure that New York had the same advantages as other cities, including the option to use a box, be it for staff outings, for public employees or for visiting dignitaries. The mayor’s office has indicated that no decision has been made as to whether or not it will exercise the option, but it exists for this and future administrations.”

A Bloomberg spokesman, Andrew Brent, echoed those ideas, saying, “As a matter of equity, it was important to us throughout the negotiations that the Yankees were not exempted from such gives or treated any differently than other teams.”

In response to recent questions from reporters, Mr. Pinsky, who is now the president of the Economic Development Corporation, has played down the importance of the luxury suite, saying he did not understand what all the fuss was about.

But the messages show that he and other aides were anything but casual about the matter, with issues like the location and size of the box of obvious concern.

When the team agreed to an 8-seat box, the city successfully demanded 12 seats.

And on July 7, 2006, Mr. Pinsky informed Mr. Doctoroff that the Yankees had told him: “The location of the box is in left field, but before the foul pole. Also, it is designed to project out, so that it will have a direct view down the third base line.”

The city also demanded that the luxury suite be provided with food — just like all the other suites. But the Yankees balked.

In one message dated July 26, 2006, Stephen Lefkowitz, a Yankees lawyer, wrote to Mr. Pinsky: “Seth — Randy believes he told you ‘no food’ and that you agreed. If this is so, please let me know and we can drop this from our list of irritants.”

The city, of course, disagreed. And that prompted Mr. Lefkowitz to respond this way: “It’s really ridiculous, but it sticks like a bone in everyone’s craw. The Yankees feel the city should pay for any food it wants to consume, and I think it’s a little unseemly to require ‘free’ food.”

He added: “For this I went to law school — sigh.”