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New York Giants face tax foe

By Kay Bell · Bankrate.com
Tuesday, January 31, 2012
Posted: 12 pm ET

The New York Giants players are focused on Sunday's Super Bowl rematch with the New England Patriots, but the team's financial personnel are facing an off-field foe: the tax man.

East Rutherford, N.J., officials contend that the Giants owe $1.5 million in property taxes on their training facility in the Garden State.

The Giants say they are exempt from tax payments because of a 1970s-era deal with the New Jersey Sports & Exposition Authority to build the original Giants Stadium. That football field was exempt from property taxes because it was owned by the sports authority, a public entity. As part of that original arrangement, the sports authority now pays East Rutherford around $6 million a year in place of property tax on the Meadowlands complex where the Giants' new stadium is located.

But East Rutherford Mayor James Cassella argues that the Giants' training center is a privately developed building and therefore should be taxed regularly.

This being America, the fight has landed in court. That means both sides are being as tight-lipped about their tax strategies as Giants coach Tom Coughlin and his Patriots counterpart Bill Belichick are about their on-field game plans for Super Bowl XLVI.

Mayor Casella, however, does admit that he's also considering taxing the Meadowlands stadium itself. That structure is owned by a joint venture between the Giants and the New York Jets.

Casella is holding off on sending that tax bill, which he estimates could net the city as much as $12 million per year, pending a court decision in the training facility tax fight. But he says the city is convinced that the stadium should be taxed because it was built with private, not public, money.

Meanwhile, the litigation compelled Moody's Investors Service to recently downgrade East Rutherford's credit rating. The ratings agency said the tax fight over the borough's second-largest taxpayer by assessed value has created some doubt as to whether the township will be able to cover its $16 million in general obligation debts.

I'm sure football fans in the Garden State are still rooting for the Giants to whup the Patriots in the NFL championship game. But when it comes to the tax matchup, I suspect the local citizenry would prefer that their city officials come out victorious.

Professional sports teams in all the major leagues often get special tax treatment by cities and states because, it is argued, their operations generate other taxable revenue. Do you think that's enough to justify the awarding of sweetheart tax deals to sports franchises?

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