mets - public hearing package_jan_2009
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NYCIDA PROJECT COST/BENEFIT ANALYSIS
January 15, 2009
Applicant: Project Location:Queens Ballpark Company, L.L.C.Citi FieldFlushing, NY 11368
The project site includes the land bounded by RooseveltAvenue, 126th Street, the Northern Boulevard extension andthe Grand Central Parkway, in the borough of Queens and a
parcel of land containing approximately 1,620 parking spaces,bounded by Roosevelt Avenue, 126th Street, the Grand CentralParkway and land occupied by the New York City TransitAuthority.
Project Description
Queens Ballpark Company, L.L.C. (the Company), has undertaken the construction of a newstate-of-the-art Major League Baseball Stadium. The new Stadium will replace the former 56,000-seat Shea Stadium, which is currently being demolished. Following the completion of the newstadium, the site of Shea Stadium will be filled in to provide for surface parking for the Stadium.
The design of the new stadium is evocative of the look and feel of the historic Ebbets Field, theformer home of the Brooklyn Dodgers. The new Stadium will have the capacity to accommodateapproximately 44,100 spectators, including 42,500 total seats plus standing room capacity, in anopen-air ballpark in a structure containing approximately seven levels. It is to include private clubseats, private and party suites, food and beverage service facilities, retail space, corporate businessspace, function space, facilities for media and other functions and amenities appropriate to a first-class professional sports facility.
Construction began in the summer of 2006 and is anticipated to be completed for the start of the2009 baseball season. Pursuant to the most recent construction report, the Stadium wasapproximately 95% completed as of the end of 2008. Substantial completion of the Stadium portion
of the Project is scheduled to occur by approximately February 28, 2009.
The Company is now seeking the additional issuance of bonds backed entirely by payments from theCompany to allow for the Stadiums completion. The additional bonds amount to $82,280,000 inPILOT Completion Bonds. Proceeds from the additional bonds will be applied to the following uses:i) construction costs associated with construction acceleration and government-requiredmodifications to the structure (e.g., for security enhancements); ii) construction costs associated withscope modifications and additions (which will enhance both the Stadiums and Citys revenue); andiii) closing costs, capitalized interest and debt service reserves. Proceeds from the additional bondsin the amount of approximately $74.7MM will be applied to costs associated with construction.
As a result of the project, it is projected that 2,209 full time equivalent employees will be employedat the project site.
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Cost Benefit Analysis
The IDA has updated its cost benefit analysis of the new Citi Field project in response to the newrequested issuance. Based on the latest information to the IDA, this new analysis, which looks at theprojects impact on the City, includes the cost of the additional financial assistance requested by the
Company.At inducement of the project in 2006 a cost benefit analysis was completed consideringonly the cost to be incurred by the City for infrastructure improvements such as site planning andexcavation work and contributions to the Stadium Capital Reserve fund. This analysis has beenupdated with the most recent budget numbers for the aforementioned work as well as additionalcosts not originally considered or known. These additional costs include forgone NYC MortgageRecording Taxes, Sales Taxes and City Income Taxes on interest. In addition, after the originalStadium project cost-benefit was completed in 2006, the IDA adopted a more conservativemethodology for accounting for forgone tax revenues. This new, more conservative methodologywas employed for the analysis below.
Beyond updating the costs of the Stadium project, IDA also undertook to update the projected
benefits on the project, based on latest available information. The return to the City analysis hasbeen updated to include new revenue projections at the stadium as well as new employmentinformation. Benefits derived from taxes in this analysis only include those revenues that are a directresult of the project taking place. Tax revenue that was received by NYC due to operations at theoriginal Shea Stadium is not being considered as part of this analysis.
This analysis has yielded a net benefit of (NPV, 2009) to New York City of $70,307,610.
Benefits to City NPV as of 2009
A. Taxes on direct and indirect activity from construction and operations $108,341,167
B. Parks Dept. savings on maint./CapEx on existing Stadium (net of lost rent) $86,721,167
C. Salvage Value of Current Stadium $4,000,000
Incremental Benefits to City $199,062,334
Costs to City
D. Infrastructure and demolition costs to City ($87,320,898)
E. City Capital reserve fund contribution ($5,637,476)
F. PV of $8.5MM to capital reserve fund in Year 30 ($2,039,087)
G. MRT cost to City ($13,283,640)
H. Sales Tax cost to City ($12,957,527)
I. Forgone Income Tax cost to City ($7,516,096)
Incremental Cost to City ($128,754,724)
Net Benefit/(Cost) $70,307,610
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