N.J. to refinance new stadium debt

N.J. to refinance new stadium debt

	Published : Wed, 19 Sep 2007 20:20 By : Agencies Print this Story

EAST RUTHERFORD, N.J. (AP) - Even though New Jersey's two NFL teams are paying for the construction of a billion-dollar stadium in the Meadowlands complex, the state's taxpayers may not emerge unscathed.

The New Jersey Sports and Exposition Authority voted on Wednesday to refinance debt related to the construction of the new stadium, a move that will cost the state about $30 million.

The debt is derived from fees associated with recasting the agency's bonds from tax-exempt to taxable, said NJSEA chairman Carl Goldberg.

The bonds are being switched because under IRS law, public land used by private companies -- in this case, the Giants and Jets football teams who will own the stadium -- does not qualify for tax-exempt bonds.

'The recasting from tax-free debt to taxable debt was inevitable now because of the private use that is contemplated for the new facility in 2010,' Goldberg said.

The existing Giants Stadium is owned by the state, and over the years the two teams have acted as tenants and paid a percentage of ticket sales to the sports authority. The Giants and Jets will keep all revenues from the new stadium, but will pay the authority $5 million annually to lease the land.

There also could be leftover debt associated with the old stadium when it is torn down in 2010. That figure currently stands at $77 million.

The NJSEA will continue to service that debt with revenues from concerts and other events over the next few years, Goldberg said, but he raised the possibility that the sports authority might have to refinance again after the old stadium is torn down.

In defending the state's deal with the two football teams, Goldberg pointed out that the state will receive sales and income tax revenue from the construction of the new stadium and nearby Xanadu entertainment complex, and noted that the Jets' new practice facility in Florham Park will add more than $100 million in taxable payroll to state coffers.

'The Sports Authority prudently looked at the overall revenue implications to the state and correctly came to the assumption that whatever modest investment the state has made in this stadium is well rewarded by the additional tax revenues generated by both the construction and the ongoing operation of the facility,' he said.