NYCFC Wants Its Own Islanders-Style Stadium Subsidy

If you’re still wrapping your brain around the math behind the New York Islanders’ “give us cheap state land and we’ll build an arena complex on it” proposal, get ready for the Bronx version. According to information leaked to the developer-fetish blog New York YIMBY, Stephen Ross’s Related Companies and Keith “Piano District” Rubinstein’s Somerset Partners are hoping to team up with the New York City Football Club to build a mixed-rate housing development and soccer stadium on the South Bronx waterfront — while proposing a discounted land deal that, as in the Islanders case, could cost New York taxpayers hundreds of millions of dollars in lost rent and property taxes.

An Empire State Development spokesperson told the Voice that the agency hasn’t even issued an official Request for Proposals (RFP) for the site, let alone approve any — it’s still sorting through the initial expressions of interest it got from developers — so this is a very early salvo on the part of NYCFC and its partners. But this initial proposal is worth watching if only because it follows the Islanders’ template of using private money for construction costs while asking for state aid in the form of cheap land.

The proposal, dubbed Harlem River Yards because that’s just how the megadevelopment name generator works now, would take a 12.8-acre defunct rail yard adjacent to the Willis Avenue Bridge and couple it with adjacent waterfront property to create the latest South Bronx waterfront redevelopment plan: a 22-story apartment tower featuring 1,279 market-rate units and 550 “affordable and workforce” apartments, plus a 26,000-seat stadium for the MLS team, which since its debut three years ago has been stuck playing in less-than-ideal conditions at Yankee Stadium.

The site, which was acquired by the state Department of Transportation from the Penn Central rail system in 1982, took its first steps toward going on the market in November 2016, when the ESD issued a Request for Expressions of Interest — what the state does before sending out an RFP — to “maximize the economic benefit of the site while preserving the intermodal footprint of the site” — translated, that’s “build stuff on it while still letting trains go through.” Today’s YIMBY story is the first news since then regarding any potential bids.

Related (owned by Miami Dolphins owner and noted giant bug exoskeleton enthusiast Stephen Ross), Somerset, and NYCFC didn’t reply to Voice queries by publication time, so for the moment we’re left to decipher the actual plan from the tidbits sprinkled into the YIMBY story. Two of these items are potentially worrisome for anyone concerned about their tax dollars going toward private sports projects:

• Developers would pay $500,000 a year in rent on the site based on a 99-year ground lease. If that sounds cheap, it is: Rubinstein spent $58 million on just five acres of land nearby in 2015, and then sold the plot for $165 million earlier this month. (This is the famed “South Bronx Gentrification Death Star” site.) If we take that range as market value for Port Morris land, then Ross, Rubinstein, and friends will be paying a present value of about $10 million for land worth $138 million to $422 million more than that.
• Since it’s a lease and not a purchase, the state-owned land would remain exempt from property taxes. Presumably ESD would demand some sort of payments in lieu of taxes (PILOTs) to help make up the difference, but there’s no guarantee this would fill in the whole gap: Related’s Hudson Yards project, for example, has fallen well short of tax revenue expectations.

Aside from any massive state tax breaks, Mrs. Lincoln, there’s a fair bit to like about the plan: The site is just a short walk from the 3rd Avenue-138th Street 6 train stop location, and 30 percent affordable units is somewhat better than usual, assuming “affordable” is actually affordable for South Bronx residents. But there’s just as much to be concerned about — cramming in even more luxury housing along the waterfront could accelerate already-soaring gentrification in Port Morris, and the stadium itself would seem to be a tight fit on a site restricted by East 132nd Street on one side and the Harlem River on the other. So while it’s still early in the process — ESD couldn’t even provide a timetable for issuing an RFP on the site, let alone for making a final decision — this project is definitely well worth keeping an eye on.