July 2, 2004
City Report Differs With Jets on Gains From Stadium
By CHARLES V. BAGLI
Sports and trade-show activity at a proposed $1.4 billion stadium for the Jets will more than cover the cost of the $600 million the city and state want to invest but will produce far fewer jobs and less tax revenue than the team has said, according to a report issued yesterday by the city's Independent Budget Office.
Under the budget office's most optimistic account, the stadium would generate about $28.4 million a year in new city tax revenue, more than enough to cover the $21 million a year in debt service needed for the city's $300 million investment. The state would get $24.9 million from the stadium, $11.9 million less than the Jets have estimated but enough to cover the state's debt service.
Still, the report said, the stadium tax revenue would be $6.1 million a year less than the Jets said in their report. More important, the stadium would produce barely half the 6,971 permanent jobs estimated by the Jets, according to the report.
If the stadium, to be called the New York Sports and Convention Center, attracts only half the number of conventions the Jets predicted, city tax revenue would fall to $22.9 million, about what it would cost the city to service the debt.
The Jets have said they would invest $800 million in building the stadium, while the city and state would provide a total of $600 million.
Opponents have criticized the project for weeks, and yesterday its supporters, including Mayor Michael R. Bloomberg, seized on aspects of the report to bolster their contention that the stadium over the West Side rail yards will be a economic engine for the city. The mayor said the report supported "what we've been saying all along, and that is that this project will be a great economic boon to this city and that the anticipated tax revenues to this city will be much greater than the debt service."
The Jets described the report as "pessimistic and inexpert," but also praised the budget office for analyzing the project's value as an exhibition hall, not simply as a stadium. All in all, the Jets said, the building will generate about $72 million a year in new state and city tax revenue, or about $30 million more than they believe it will cost the city and state in annual debt payments.
"They're halfway right because they analyzed it as both a stadium and as a convention center," said Thad Sheely, the Jets' vice president for development. "They give us 100 percent credit for sports uses but cut the convention business in half and do not provide an accurate assessment of the demand for mid-sized exhibition space in New York City."
The budget office's report also raised a number of questions about economic forecasts for the project and the wisdom of such a large public investment. Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city agency, said stadium advocates were not reading the report very closely.
"The message we're trying to convey is not exactly the message the Jets and the mayor are spinning," she said. "Our report found that there would be half the jobs the Jets are expecting and significantly less tax revenues for the city. We also found that two-thirds of the tax revenues are coming from convention and exposition activity, rather than football. But we know from past experience at convention centers around the country that those are very speculative assumptions."
New convention centers in both Washington and Boston are struggling, in part because of a significant oversupply of exhibition space and the sharp competition between cities for conventions and trade shows.
Although the Jets predict that the stadium will attract 40 conventions and trade shows a year, Ms. Lowenstein said that expectation had to be treated with some skepticism.
New York is a hugely attractive destination, she said, but it is not always the choice for cost-conscious conventions and trade shows, because it is also relatively expensive.
The average room rate at hotels in New York City is $170.38 per night, 80 percent more than in Orlando, Fla., ($94.58) or Chicago ($96.56), 44 percent more than in San Francisco ($118.19) and 122 percent more than Atlanta ($76.70), according to Smith Travel Research, a leading hotel industry data firm.
"New York is an expensive market," said Randy Smith, chief executive of Smith Travel. "As a result, they don't get the convention business that Chicago, Orlando and Las Vegas get. Those are cheaper markets, and they've geared themselves to conventions." http://www.nytimes.com/2004/07/02/nyregion/02stadium.html
jake · 2004-07-02
July 2, 2004 City Report Differs With Jets on Gains From Stadium By CHARLES V. BAGLI Sports and trade-show activity at a proposed $1.4 billion stadium for the Jets will more than cover the cost of the $600 million the city and state want to invest but will produce far fewer jobs and less tax revenue than the team has said, according to a report issued yesterday by the city's Independent Budget Office. Under the budget office's most optimistic account, the stadium would generate about $28.4 million a year in new city tax revenue, more than enough to cover the $21 million a year in debt service needed for the city's $300 million investment. The state would get $24.9 million from the stadium, $11.9 million less than the Jets have estimated but enough to cover the state's debt service. Still, the report said, the stadium tax revenue would be $6.1 million a year less than the Jets said in their report. More important, the stadium would produce barely half the 6,971 permanent jobs estimated by the Jets, according to the report. If the stadium, to be called the New York Sports and Convention Center, attracts only half the number of conventions the Jets predicted, city tax revenue would fall to $22.9 million, about what it would cost the city to service the debt. The Jets have said they would invest $800 million in building the stadium, while the city and state would provide a total of $600 million. Opponents have criticized the project for weeks, and yesterday its supporters, including Mayor Michael R. Bloomberg, seized on aspects of the report to bolster their contention that the stadium over the West Side rail yards will be a economic engine for the city. The mayor said the report supported "what we've been saying all along, and that is that this project will be a great economic boon to this city and that the anticipated tax revenues to this city will be much greater than the debt service." The Jets described the report as "pessimistic and inexpert," but also praised the budget office for analyzing the project's value as an exhibition hall, not simply as a stadium. All in all, the Jets said, the building will generate about $72 million a year in new state and city tax revenue, or about $30 million more than they believe it will cost the city and state in annual debt payments. "They're halfway right because they analyzed it as both a stadium and as a convention center," said Thad Sheely, the Jets' vice president for development. "They give us 100 percent credit for sports uses but cut the convention business in half and do not provide an accurate assessment of the demand for mid-sized exhibition space in New York City." The budget office's report also raised a number of questions about economic forecasts for the project and the wisdom of such a large public investment. Ronnie Lowenstein, director of the Independent Budget Office, a nonpartisan city agency, said stadium advocates were not reading the report very closely. "The message we're trying to convey is not exactly the message the Jets and the mayor are spinning," she said. "Our report found that there would be half the jobs the Jets are expecting and significantly less tax revenues for the city. We also found that two-thirds of the tax revenues are coming from convention and exposition activity, rather than football. But we know from past experience at convention centers around the country that those are very speculative assumptions." New convention centers in both Washington and Boston are struggling, in part because of a significant oversupply of exhibition space and the sharp competition between cities for conventions and trade shows. Although the Jets predict that the stadium will attract 40 conventions and trade shows a year, Ms. Lowenstein said that expectation had to be treated with some skepticism. New York is a hugely attractive destination, she said, but it is not always the choice for cost-conscious conventions and trade shows, because it is also relatively expensive. The average room rate at hotels in New York City is $170.38 per night, 80 percent more than in Orlando, Fla., ($94.58) or Chicago ($96.56), 44 percent more than in San Francisco ($118.19) and 122 percent more than Atlanta ($76.70), according to Smith Travel Research, a leading hotel industry data firm. "New York is an expensive market," said Randy Smith, chief executive of Smith Travel. "As a result, they don't get the convention business that Chicago, Orlando and Las Vegas get. Those are cheaper markets, and they've geared themselves to conventions."NYT: Stadium Deal
http://www.nytimes.com/2004/07/02/nyregion/02stadium.html