The privately-funded stadium that is currently being built to house New York City area’s two professional football teams is apparently not so private after all. It turns out that taxpayers will be hit with part of the bill, even though the New York Giants and New York Jets are shelling out $1 billion for construction of the stadium in the New Jersey Meadowlands complex.
The New Jersey Sports and Exposition Authority voted on Wednesday to refinance debt related to the construction of the new stadium, according to the Associated Press. The new financing package will cost the state about $30 million, said the report. The reason: The agency’s bonds related to the construction has been recast from tax-free to taxable debt, notes the AP.
Since two private companies – the Giants and Jets – are taking over public property, the land no longer qualifies as an entity that can be financed using tax-exempt bonds. “The recasting from tax-free debt to taxable debt was inevitable now because of the private use that is contemplated for the new facility in 2010,” NJSEA chairman Carl Goldberg told the AP.
Currently, the two teams play in Giants Stadium, which is owned by the state. Under the deal, the teams pay a percentage of their ticket sales to the sports authority. When the new stadium is built, however, the Giants and Jets will keep all ticket revenues, but pay the authority $5 million each year to lease the land.
But, the new stadium may be saddled with leftover debt, says the AP, which estimates that $77 million will still be owed on the old stadium when it is torn down in 2010. That debt is expected to be paid down with the proceeds generated by concerts and other events hosted in the stadium over the next few years. “This is all a part of the restructuring of the sports authority’s debt subsequent to the start of construction of a new stadium,” said Goldberg, noted the Newark Star-Ledger.