February 9, 2000

Deal Is Near for Yankee Farm Team Stadium on Staten Island

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By CHARLES V. BAGLI

he Giuliani administration is nearing completion of a deal to construct what would be the country's most expensive minor league baseball stadium, a $71 million complex near the Staten Island ferry terminal that would be built entirely with taxpayer money.

Under the terms of the 20-year agreement, the Staten Island Yankees, which play at the lowest level of the legendary Yankees farm system, would pay a modest rent and control the stadium year-round. The team, which plays 38 home games a year, would not have to pay any money for construction and would reap half of any advertising revenue and 70 percent of the revenues from any events booked into the stadium during the 327 days annually that the Yankees would not play there.

The stadium would be the first new professional ballpark in the city since Shea Stadium opened in 1964.

The Giuliani administration and the Staten Island borough president, Guy V. Molinari, hailed the project as a boon to the neglected area surrounding St. George Station, where the ballpark would be built along Richmond Terrace at Wall Street on a gravel and mud parking lot northwest of the Staten Island ferry terminal. The city would have the right to use the stadium for about 30 public events.

"We see it as the key component in the revitalization of the St. George neighborhood," Michael G. Carey, president of the city's Economic Development Corporation, said yesterday. "These things are very popular, affordable family entertainment."

Mr. Carey said the negotiations with the Staten Island Yankees should be completed by Friday. The 6,500-seat stadium, which has already been approved by the City Council, would include 21 luxury boxes, a restaurant, a clubhouse, an arcade and a novelty store.

Many cities have proved willing to provide enormous subsidies to lure professional teams, but the cost of the project for a team in the Class A New York-Penn League is extraordinary, said Robert Baade, an expert in the economics of professional sports. The estimated price tag is well above that for the $34 million minor league stadium that opened last year in Newark, and the $18 million stadium in Fishkill, N.Y., that is home to the Yankees' Penn League rival, the Hudson Valley Renegades. Leases for those stadiums have revenue-sharing similar to what is planned for Staten Island.

Since major league clubs cut their financing for farm clubs in the early 1990's, minor league teams have increasingly moved to those cities willing to build new parks. At the same time, minor league baseball has drawn new fans, because of relatively low ticket prices, intimate settings and the chance to talk to the players from the stands.

Some local officials and analysts say the project represents another gift from Mayor Rudolph W. Giuliani to a borough that provided the margin of victory in his 1993 race against David N. Dinkins.

"Just because baseball is played on a diamond it doesn't mean you have to build a jewel box," said John Sabini, a councilman from Queens. "A lot of people stand to benefit from this and all of them are close to the mayor. One gets the feeling that this is part of a larger deal with the Steinbrenner family."

In separate projects for the borough, the city is also rebuilding the decrepit Staten Island ferry terminal, whose cost has swelled to more than $80 million from $20 million. It is also subsidizing construction of the nearby National Lighthouse Museum and a new home for the Staten Island Institute of Arts and Sciences. Mr. Giuliani has also promised to close the Fresh Kills landfill by 2002, a pledge that helped secure the loyalty of Staten island voters.

"I don't see this as reparations for the landfill so much as the city of New York getting something wonderful," Mr. Molinari said.

But economists questioned whether there would be any economic benefit from a minor league team that plays only 38 home games a year. They said the deal could set a pattern for large public subsidies at a time when the Giuliani administration is pressing to build a $30 million minor league stadium for the Mets in Brooklyn, as well as major league stadiums for both the Yankees and Mets, and possibly the New York Jets. The total cost to taxpayers could exceed $2 billion if all the plans come to fruition. But the stadiums, critics argue, provide mostly seasonal jobs and redistributes money spent on entertainment, rather than generates additional spending.

"It's all about serving the interests of the private sector through public subsidies," said Mr. Baade, a professor of economics at Lake Forest College. "We're not talking about an industry that's large enough to have an impact on an economy as large and diverse as New York's."

The project has wide political support on Staten Island, although some residents are concerned about potential traffic tie-ups when commuters pour off the ferry and head for their cars at the same time baseball fans are trying to get into the parking lots.

During City Council hearing last December, Jerome X. O'Donovan, a local councilman who favored an alternative location on Staten Island, pushed for more community-based events at the stadium and additional parking, while complaining about how the project's cost had soared well beyond Mayor Giuliani's original $20 million estimate. Such cost overruns have often afflicted stadium projects.

The Giuliani administration and Mr. Molinari prefer to put the stadium cost at $29.5 million, not $71 million. "The other costs are not the true costs of constructing the stadium," Mr. Molinari said, "but infrastructure improvements that must be made whether or not there's a stadium."

But the city's figure does not include the $12.75 million cost of buying the land on which the stadium is to be built. Nor does it include what developers call the soft costs of construction: architectural, engineering and construction management fees totaling $10.95 million. Mr. Carey said some of the architectural costs are attributable to other aspects of the project, like shoring up the bulkhead for the esplanade to the stadium.

In any event, the cost of the project totals $71 million when the environmental cleanup, landscaping, parking lot construction and a $6.75 million esplanade are added into the budget. The project would be financed with tax dollars raised during the course of the construction.

The city has already spent $5 million to build a temporary ball field for the team at the College of Staten Island. The team, which moved to Staten Island last year from Watertown, N.Y., drew 4,500 to an opening day sellout in June and an average of 3,183 fans a game, mostly from within Staten Island, over the season. The team is owned by the Getzler family and members of the Steinbrenner family, who also have a stake in the major league team.

Josh Getzler, the club's chief operating officer, disputed criticism that the Yankees were getting a sweetheart lease: "The reality of the situation is that it's probably the most substantial lease of any minor league ffiliate in terms of the amount of money going back to government."

If all goes well, Mr. Getzler said, the city could get as much as $1 million a year in rent and fees. City officials estimated the stadium would generate $175 million in economic activity in the life of the lease.

The team would have the option of walking away from the lease if it failed to make a profit for three consecutive years.