"Our assessors jacked up the numbers and the comparables for the Council to justify the stadium bonds," said a Finance Department official familiar with the project.
The Daily News has an intriguing story today about an investigation into the assessments on the land on which the new Yankee Stadium is being built. Seems that assessments by the City of that land pegged the value at approximately $275 per square foot, pre-development. This assessment allowed the city to float bonds for the construction of the new park, a linchpin in keeping the team in the five boroughs. That $275 a foot is a staggering number for the South Bronx, considering that the MTA has a tentative agreement to sell land at the Hudson Yards in Manhattan for $1.05B, a project entailing 12 million developable square feet (or $87 per developable square foot) excluding the costs of a structural platform over the railyards, a cost borne by the purchasing developer. This platform and attendant structure, estimated at approximately $166 per square foot in construction costs, pushes the developable PSF cost of the Hudson Yards project to approximately $250 per square foot, still less than the land on which the new Yankee Stadium is located. Realize that the Hudson Yards property is one of the last large-scale pieces of empty land in Manhattan, an incredible commodity located near the transit hub of Penn Station, the Javits Center, a new extension of the 7 train, and with full views of the Hudson River and beyond. It is, for the city (and the MTA, which is selling the land), one of the more valuable large-scale pieces of real estate to come available, and surely exceeds in value per square foot (even considering the risk and scope of the eventual construction) that of the land in the South Bronx. The HY site requires a zoning change for the purposes of development, but given the location, the amenities, the inherent quality of the place and the importance of the project to the city such a change seems to be nearly a fait accompli. The land in the Bronx, zoned as "Park" and not developable as commercial or residential real estate would require a similar zoning change, but the market in that area would probably not support a similar type of development to that in the Hudson Yards, a development type embodying tremendous value, thus depressing (one would think) the assessed value upon which the bond offers were based.
Further, when you consider the fact that the city is seeking an additional offering of more tax-free bonds for Yankee Stadium you have the stench of a rotten situation, where land in the South Bronx is being assessed at a number higher than some of the most prime real estate in the entire city. Had the land at YS been assessed at a value and more in line with market for what this land would sell on the open market and under current zoning status, the city could not have offered as much in bonds, thus jeopardizing the project before it started. This would surely have increased the chances that the Yankees would have fled for more remote climes. In the end, if these investigations prove that the City engineered a bond offer backed by ridiculously inflated land values, the victims are us taxpayers. If the assessment is proven to have been inflated, someone should be held accountable.