The New York Daily News is reporting that former aides to New York Mayor Michael Bloomberg, including current Rays vice president Michael Kalt, pressured the city's property appraiser to inflate the value of the land under the new Yankee Stadium so the Yankees could qualify for nearly $1 billion in tax-free bonds.
According to the Daily News, the city's chief tax assessor put the market value for the stadium site in March 2006 at $27 million, far lower than the Yankees wanted. A Finance Department official ordered him to redo the report. Within hours, he jacked up it up to $204 million.
The appraisal is important because it is tied to how much in tax-free bonds the Yankees could issue. While the Yankees make the payments on the bonds, it is the city actually issuing the debt.
According to the Daily News, on Dec. 22, 2005, Kalt wrote city Economic Development Corp. officials, "I don't want to get into this much further on e-mail, but we have to take into consideration that the AV [assessed value] is only so high because we're choosing a methodology to support the tax-exempt financing."
Kalt was City Hall's point man for the Yankees project. He knew the Yankees needed a high assessment because the team was planning to pay back $940 million in tax-exempt financing with something called PILOTs - payments in lieu of taxes. The higher the assessment, the more tax-free bonds the team could ask the IRS to approve.
Kalt, now a vice president of the Tampa Bay Rays, declined to comment Tuesday, according to the Daily News. "No one influenced the assessment," Bloomberg spokesman Andrew Brent said.
You can read the whole story here.
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