The IRS issued a ruling yesterday that has monstrously huge implications for anyone that will ever want to build a stadium or arena ever again (don't go to sleep yet...this is big). You wouldn't know it in NYC, though, because even though it impacts the new Yankee Stadium and Citi Field, it's playing out as an Atlantic Yards story. At issue is whether tax-free financing can be used to build Frank Gehry's $950 million arena. (Leaving aside the issue as to anyone will ever finance a facility that is sure to go above $1 billion given traditional Gehry cost overruns in the middle of one of the most massive credit meltdowns in history.) The ruling creates a loophole for projects that are "substantially in progress," while banning it for new ones.
Atlantic Yards expert Norman Oder believes this is a green light for tax-free financing for developer Bruce Ratner's project. In today's Times, Charles V. Bagli, who helped bring us the Atlantic Yards Stall, also interprets it as a thumbs-up for taxpayer subsidies of the House That Frank Built. He even calls it "some rare good news." Ah, but those killjoys at Develop Don't Destroy beg to differ. They are saying there is no way that the arena was "substantially in progress" before the IRS cutoff date of Oct. 19, 2006. (For those of you on the "M" side of the S&M divide, the IRS regulations can be found and downloaded here as your Master whips you hard, digs spiked heels into your rear end and calls you degrading names.) On you marks. Get set. File your lawsuit or IRS appeal.
· Developer of Nets' Arena Can Use Tax-Exempt Bonds [NYT]
· So, Does Mr. Ratner Get Tax-Free Bonds or Not? [GL]
· Treasury regs would grandfather in Atlantic Yards [AYR]