Going Coastal

The Yankees improperly deducted more than $11million from their annual rent bill for Yankee Stadium over a four-year period, city Controller William Thompson has found.

Thompson, who will make a formal announcement about the Yankee bill today, said the team has agreed to pay it all back – with interest.

The richest franchise in baseball overstated expenses by more than $24 million from 2003 to 2006, which allowed it to underpay its rent bill on the city-owned stadium, Thompson’s year-long audit found.

The team also wrongly deducted from that rent nearly $10 million in planning costs for the new Yankee Stadium, the audit says.

Ever since 2001, the city has let the team deduct up to $5 million a year from its annual rent to pay for planning costs for the new stadium, which is scheduled to open in April.

Thompson said team executives took more than $9 million in planning cost deductions in 2006, even though they had already claimed those same deductions in previous years.

They also deducted nearly $1 million from rent in 2005 for new stadium planning costs that Thompson found “inappropriate.”

Those costs included:

$50,000 the team paid Bronx lawyer Stanley Schlein, who then used much of that money to make contributions to an unidentified political action committee.
Because Schlein spearheaded the pressure on City Council to approve the new stadium, the Yankees appear to have used city money to finance their lobbying.

“The Yankees accept this finding,” team spokesman Howard Rubenstein said yesterday. “They will be paying it in full.”

The team “has always cooperated with the controller” and has “no problems with the audit,” Rubenstein said.

Last May, as Thompson’s people were in the middle of the audit, the Yankees agreed to pay back $9 million to the city in an installment plan. They paid the first $5 million in May, while an additional $4 million, plus interest, is due March 10.

Then the auditors discovered an additional $2.3 million in rent underpayments connected to the team’s revenue-sharing arrangement with Major League Baseball.

Under that arrangement, the Yankees pay tens of millions of dollars each year to the “have-not” teams in baseball. The stadium lease allows the team to deduct most of those revenue-sharing payments from gross revenues. Annual rent is calculated based on that adjusted gross revenue.

The audit found the Yankees inflated their revenue-sharing expenses by more than $24 million, improperly reducing the amount they owed to the city in rent.

Every year, the controller’s office catches the Yankees inflating these revenue-sharing expenses, and every year team officials agree not to do it again, a source in the controller’s office told me.

After they were caught this time, team executives sent a $2.3 million refund to the city a few weeks ago.

You’d think the Yankees, who never tire of asking for more government subsidies, would have learned by now to keep honest books.

You’d think they would stop nickel-and-diming our city.

“Thanks to Controller Thompson, the taxpayers finally got some justice from the Yankees,” said Bettina Damiani, executive director of Good Jobs New York, a longtime opponent of the new stadium deal.

“It’s disappointing that the city has to work so hard to make them pay their fair share.”

Juan Gonzales
Daily News