-Comptroller's audit finds team owes nearly $2.7 million, but City does nothing -
An audit released today by New York City Comptroller William C. Thompson, Jr. found the City is striking out by letting the New York Mets slide on $2.5 million the team owes from their rental agreement for Shea Stadium.
Thompson's audit, available at http://www.comptroller.nyc.gov/, found the team owed the City nearly $2.7 million in fees related to the rental agreement between the Parks Department and the Mets organization for operations at their former home field, of which the team has paid more than $180,000. The Parks Department is charged with ensuring that the Mets comply with the terms of the agreement.
The audit covered the period January 1, 2003, through December 31, 2007.
"The Mets have done an Amazin' job at skirting their commitment to the City," Thompson said. "While we are faced with widening budget gaps and cuts to essential services, the City should be trying to collect every penny we are owed. Instead, City Hall is putting on a minor league performance."
Under the lease for operations at Shea Stadium, the Mets were required to pay the City the greater of either an annual minimum rent of $300,000 or a percentage of revenues from gross admissions, concessions, wait service, parking, stadium advertising, and a portion of cable television receipts.
The Mets were also permitted to deduct portions of the actual payments they make to Major League Baseball related to their tickets sales and local cable revenues, planning costs up to $5 million per year for a new stadium (Citi Field), and all sales taxes before calculating their rent payments to the City.
Thompson found that the Mets inappropriately deducted almost $2.5 million in insurance premiums paid on the new stadium facility from their rental payment. Thompson said that insurance for a stadium whose construction was well underway at the time of the payment (August 2007) is not considered part of the "planning" of the stadium and therefore cannot be deducted under the terms of the agreement. However, the City Law Department has stated that it modified the agreement to allow for cost other than planning to be written-off by the Mets.
"The eleventh amendment to the lease is clear," Thompson said. "Only costs associated with the planning of the new Citifield can be deducted from payments to the City. Insurance on the new stadium is not, and should not, be deducted"
In addition, the Mets overstated more than $2.8 million in revenue-sharing payments to Major League baseball, resulting in them owing $139,821 to the City. The team also failed to report $2.6 million in concession revenue, resulting in a loss of $41,899 in payments to the City. The Mets paid$181,720 in rent owed as a result of these assessments.
Thompson urged the team to immediately pay the remaining $2.5 million owed to the City and recommended the Parks Department ensure they do so. However, both the Mets and the City disagreed.
"I can't understand why the City is allowing this to take place," Thompson said. "My auditors identified a real violation of the agreement, resulting in millions of dollars being owed to the City, and it seems as if the Bloomberg Administration is turning a blind eye on this issue."
The Mets were found to have submitted their rent statements and related payments on time, and generally adhered to the other non-revenue requirements of their lease agreement, such as maintaining the required property and liability insurance and reimbursing the City for their annual electricity, water and sewer use.