The New York Yankees don’t have to produce a catalog of subpoenaed documents tied to tax breaks and $950 million of low-cost financing for the Major League Baseball team’s new stadium, a judge ruled.
The subpoena, issued by the New York State Legislature, is overly broad, New York Supreme Court Justice John Egan said.
“The Yankees have made a good-faith effort to comply with the subpoena, culling through and producing a great deal of documents,” Egan wrote in an order yesterday.
State Assemblyman Richard Brodsky, a Westchester County Democrat, has accused the team of skirting U.S. tax law, claiming it hasn’t shown an adequate public benefit to justify obtaining low-cost financing through tax-exempt bonds.
He wanted the documents to determine if the team “knew of, caused or participated in the illegal manipulation of property- tax assessments,” whether ticket prices exclude “the vast majority of New Yorkers” from attending the new facility built with the help of tax dollars, and related issues.
Brodsky said in an e-mailed statement that he disagrees that the subpoena was overbroad. He said that the legislature will have to decide what its next steps will be to address the issue of public support for stadiums and that “relevant documents are needed to” pursue changes in the law.
Tax Dollars
The “propriety” of using tax dollars for stadiums used by privately owned teams “is certainly debatable, and Mr. Brodsky is right to bring this issue to the floor of the legislature for public debate,” Egan wrote. “The Yankees did not invent this practice -- they are merely the latest in a long line of teams to apply for publicly backed financing for new stadiums.”
To comply with the subpoena, the Yankees would have to produce about 2,200 boxes of documents and 1.39 million e-mails, the judge said. He said subpoenas shouldn’t be used for “fishing expeditions.”
“We estimated that it would have cost over $5 million in legal fees just to look through the e-mails” for relevance and attorney-client privilege, George Carpinello, an attorney for the Yankees at New York law firm Boies, Schiller & Flexner LLP, said today in a phone interview.
Yankees President Randy Levine and city officials have denied wrongdoing in connection with financing the $1.5 billion, 52,325-seat stadium in the borough of the Bronx, which opened in April. Seats near home plate at the new ballpark cost as much as $2,625 a game, team officials have said. Levine testified at a June 1 hearing in the case.
Supporting Infrastructure
Although the team is paying for the stadium facility, the state and city agreed to fund about $700 million in supporting infrastructure, including a new Metro-North rail station, 28 acres (11 hectares) of recreation areas, parking and street improvements.
“The New Yankee Stadium project has been the most open and transparent project in recent history with more than 23 public hearings on the matter and having been thoroughly vetted and approved at every level of government,” Boies Schiller partners Carpinello and Jonathan Schiller said in an e-mailed statement on behalf of the team.
“The baseball season is now in full swing and millions of fans have already enjoyed the new Yankee Stadium,” they said. “It is time to move on.”
(Source: Bloomberg)
