Willets Point soccer stadium will cost taxpayers, IBO says
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NYCFC’s stadium in Willets Point, which will be called Etihad Park, will cost taxpayers over $500 million in lost tax revenue, a new report from the Independent Budget Office found. Rendering via NYCFC
By Jacob Kaye
New York City’s first stadium dedicated solely to soccer is expected to cost the city over $500 million in lost tax revenue, according to a new report from the Independent Budget Office.
Though the construction of New York City Football Club’s $800 million stadium in Willets Point, which is part of a broader effort to remake the industrial corner of Queens, will be funded entirely with private dollars, the soccer team will not be required to pay property taxes throughout the duration of its 49-year lease in the soon-to-be rebuilt neighborhood.
According to the IBO, because of the deal, the city could lose out on as much as $538 million in property tax revenue.
The report on the stadium agreement between the city and NYCFC, which was finalized in May, is the first public accounting of the project, which the Adams administration has touted as the “first privately financed stadium in New York City in generations.”
But the IBO said the stadium won’t come without its costs to taxpayers.
“While the stadium stands apart from past sports complex projects in that its construction is privately financed…the city has and will continue to provide substantial financial support to the new stadium and broader Willets Point development,” the report read.
In addition to the lost tax revenue, the city will likely end up spending around $1 billion on the land the stadium is set to be built on. Included in that cost estimate was the purchase of the land and the ongoing remediation of it – cleaning up the area is particularly challenging given the centuries of pollution in what was once known as the “Iron Triangle.” The city is also on the hook for building the infrastructure in the new neighborhood, which for decades was without a sewer, paved roads or street lights.
According to the IBO, most of the cost of preparing the land would have had to be spent by the city regardless of what was being built atop it.
And while the deal for the 25,000-seat stadium, which NYCFC announced on Thursday will be called Etihad Park, won’t come without a price to the city, it’s not all that different from other deals for stadiums across the city.
The three most recent stadiums built in the five boroughs – Citi Field, Barclays Center and Yankee Stadium – were all created with the promise that the owners of the sports complexes wouldn't have to pay the city tax on their property. However, unlike NYCFC’s stadium, Citi Field, Barclays Center and Yankee Stadium were each built by using tax-exempt bonds.
While taxpayers may have been spared the cost of Etihad Park’s construction, the IBO said that generally speaking, stadiums rarely do much to bring an economic boost to the neighborhoods they crop up in.
“The consensus among the economics community is that substantial investments or subsidies for sports stadiums is typically an inefficient use of public resources,” said Brian Cain, the assistant director of housing, environment and infrastructure at the IBO.
According to Mayor Eric Adams, the soccer stadium and Willets Point’s planned 2,500 apartments, new commercial spaces, 250-room hotel and elementary and middle school is expected to generate over $6 billion in economic activity over the next three decades.
But where that estimate comes from remains a mystery, according to the IBO.
The independent fiscal watchdog said that the city’s Economic Development Corporation – which, alongside a joint venture between developers Sterling Equities and Related Companies, is leading the project – refused to clue the IBO in on how it got its $6 billion figure.
“IBO is unable to verify the EDC estimates; EDC has not publicly, nor upon request, provided details of their economic impact estimate methodology,” the report read.
When asked for its response to the report, the EDC directed the Eagle to a letter sent by EDC’s president, Andrew Kimball, to the IBO “strongly disputing” its findings.
The city will not collect tax revenue on the land it owns in Willets Point and is leasing to NYCFC for the soccer club’s new stadium. Eagle file photo by Ryan Schwach
Kimball claimed that the IBO’s findings were “fundamentally flawed” and accused the budget office of acting in “bad faith” by sharing them with media outlets before sharing them first with the EDC.
“After three mayoral administrations and decades of neglect, Willets Point will be transformed from an underutilized, underinvested, and contaminated corner of Queens into a brand-new neighborhood, anchored by affordable housing and essential infrastructure that will serve the entire region,” Kimball wrote in the letter. “This is a generational project that will propel Queens, New York City, and the entire region forward.”
“At the same time the IBO uses flawed analysis to draw inaccurate conclusions about Willets Point, it entirely ignores the larger city and regional benefits of a project of this scale,” he added.
The mayor’s office did not respond to the Eagle’s request for comment, nor did NYCFC.
The plan to bring a soccer stadium to Willets Point was first announced toward the end of 2022, Adams’ first year in office.
The stadium is planned for phase two of the redevelopment of Willets Point, a neighborhood the city has long eyed for development after decades of disinvestment and pollution.
Phase one of the project, which is currently under construction, will include 1,100 units of affordable housing, a K-8 school, a parking garage and an acre of open space. Phase two, which the city is expected to break ground on in the coming weeks, will include a new hotel, 180,000 square feet of retail space, 1,400 affordable housing units and the stadium.
Phase one of the Willets Point redevelopment is expected to be completed in 2027. Parts of phase two, including the stadium, are also expected to be completed that year. The 1,400 units of affordable housing in phase two are expected to be open to renters in 2028.
