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Giants Taking Action
By Michael Eisen, Giants.com
April 6 , 2005
EAST RUTHERFORD, N.J. – Stating they need to “take action to protect our home,” the Giants today filed suit against the New Jersey Sports & Exposition Authority and the Xanadu developers to enforce the Giants’ rights to a state of the art stadium and to stop the illegal construction of the $1.3 billion entertainment, recreation and retail complex that has commenced at the sports complex.
“This is not a step that we wanted to take,” said John Mara,’ the team’s Executive Vice President and Chief Operating Officer. “But we had no choice.
“The Meadowlands has been our home for nearly 30 years, and we needed to take action to protect our home. This is not a happy occasion for us. We were the first tenants here in the Meadowlands. Indeed, this complex would not have been built had we not made the decision in the early 1970s to move here. We also happen to be the only tenants who are looking to stay here. And we’re willing to build our own stadium in order to make that happen. The Sports Authority forced us to take this action by filing a lawsuit after making last-minute demands that sabotaged our negotiations to build a new stadium and by blatantly and consciously disregarding our rights under the lease. This action is necessary to enforce those rights and protect our franchise and our fans.”
Under the Giants’ lease agreement with the NJSEA, the state is obligated to provide the franchise with a state-of-the-art stadium. But Giants Stadium, which opened in 1976, is “hardly what anyone would call state of the art,” said Joe Shenker, an attorney from Sullivan & Cromwell who represents the Giants. According to the complaint filed today with the Superior Court in Bergen County, as more than 20 NFL stadiums have been built or substantially renovated since 1995, the 30-year old Giants Stadium has fallen far behind most NFL football stadia in terms of playing and practice facilities, infrastructure and fan amenities. Among the state-of-the-art features it lacks are up-to-date training and practice facilities, ample retail, concourse and concession space, sufficient premium seating, the latest sound and video technology and adequate restroom facilities.
Last month, the NJSEA filed suit against the Giants and asked the court to define exactly what “state of the art” constitutes.
“(The NJSEA) has consciously consigned the Giants to play in, and our fans to occupy, a stadium that is more state-of-decline than state-of-the-art,” Mara said. “We were given no choice but to assert our rights under our lease.”
The Giants said the NJSEA also violated the lease by permitting the construction of Xanadu to begin last month without the team’s approval. In its complaint, the Giants point out that the Xanadu project, as currently planned, will create gridlock at the stadium, interfere with the stadium’s pedestrian walkways and eliminate surface parking dedicated for the exclusive use of Giants fans, all in violation of the rights expressly granted to the Giants in their existing lease.
“The NJSEA also disregarded its contractual obligations to us when it authorized the Xanadu developers to begin construction,” said Steve Tisch, representative of the Tisch family ownership. “We are asking the court to stop this so that the issues we have with the project can be resolved in conformity with our rights under our lease. If we do not protect the rights granted to us by the NJSEA in our lease, our fans will suffer.”
The Giants’ court action today takes place four weeks after a proposed deal for a new 100 percent privately financed state-of-the-art stadium fell apart when the state sought to add a provision for taxing stadium luxury suites – which would have undermined the ability to privately pay for the new stadium – and demanded an immediate sign-off from the Giants on the Xanadu project without addressing the team’s concerns over its negative impact.
The demands came despite the considerable benefits of the new stadium plan to the state. Under that plan, the state would have been relieved of its current burden of operating, maintaining and improving the stadium – an operation that, according to figures provided by the state’s financial advisors, will lose more than $10 million dollars per year, as opposed to earning the profits claimed by the state. In contrast, the state would have received $6.3 million per year in rent under the new stadium deal.
Giants affiliates would have paid for the demolition and repaving of the old stadium and, in its place built – using entirely private funds – a new $750 million home for the Giants in the Meadowlands, including all required on-site infrastructure improvements. The only financial burden assumed by the state would have been to provide $20-$30 million of off-site infrastructure improvements, which cost would have been offset by $27 million in one-time fiscal tax benefits from the construction of the new stadium. A report by a Giants’ consultant, Conventions Sports & Leisure (CSL), projected that the new stadium would also have generated incremental fiscal benefits to the state of $12.5-20 million per year. In contrast, the state-of-the-art obligations under the current lease, even according to NJSEA’s own financial advisors, could cost the state tens of millions of additional dollars per year.
“We agreed to pay 100 percent of the cost of a new state of the art stadium for the Giants here at the Meadowlands, and in addition pay $6.3 million in annual ground rent to the authority,” Shenker said. “The authority would have been relieved of all of its financial obligations, including the ‘state of the art’ obligation, which is enormous. That deal involved no subsidies to the owners. To the contrary, it provided enormous fiscal benefits to the state, practically unprecedented in an environment where governmental authorities routinely provide subsidies to build stadiums.”
Shenker disputed an NJSEA claim that the authority makes $18 million a year from the stadium and, after subtracting the rent, would in reality suffer a net loss of $12 million a year.
“That’s a myth,” Shenker said. “The stadium is not currently profitable to the state and is not going to be profitable for the foreseeable future.”
Part of the reason for the shortfall is the anticipated departure from the stadium of the Jets, who last week received approval from the Metropolitan Transportation Authority to build a new stadium on the West Side of Manhattan. Mara was asked if the Giants are considering joining the Jets in New York.
“That’s not something that we’re looking to do,” Mara said. “That’s not our first choice. They seem to be pushing us in that direction. But our first choice is to build a new stadium here in New Jersey.
“Our preference has always been to build a 100 percent privately-financed new stadium. But if that is not an option – and there have been no negotiations for the past several weeks on that subject -- our second choice is to enforce our rights under the lease. And that is to get them to do what they are obligated to do, and build us a state of the art facility. It’s something we specifically negotiated for back in 1995 when we agreed to extend our lease. They agreed to always maintain and improve Giants Stadium so that it would always be a state of the art stadium.”
According to Tisch, three possibilities exist as the parties move forward, “The state fulfills its obligation and upgrades the stadium, at taxpayer expense; the state agrees to terms that allow us to privately finance a new stadium, at no taxpayer expense; or we will have no choice but to respond to what the state is really telling us: Giants, find a new home.”
Mara was asked what it would take for the Giants to look for a new home.
“We’re hoping that we don’t get to that point,” he said. “We intend to be successful in this lawsuit, and at the very least end up with a state of the art Giants Stadium. If we’re not, we’ll have to consider what our other options are.”
Copyright New York Giants 2005
I think the NY Giants need a new stadium. Maybe we can finally attract some real fans too.
Giants Taking Action
By Michael Eisen, Giants.com
April 6 , 2005
EAST RUTHERFORD, N.J. – Stating they need to “take action to protect our home,” the Giants today filed suit against the New Jersey Sports & Exposition Authority and the Xanadu developers to enforce the Giants’ rights to a state of the art stadium and to stop the illegal construction of the $1.3 billion entertainment, recreation and retail complex that has commenced at the sports complex.
“This is not a step that we wanted to take,” said John Mara,’ the team’s Executive Vice President and Chief Operating Officer. “But we had no choice.
“The Meadowlands has been our home for nearly 30 years, and we needed to take action to protect our home. This is not a happy occasion for us. We were the first tenants here in the Meadowlands. Indeed, this complex would not have been built had we not made the decision in the early 1970s to move here. We also happen to be the only tenants who are looking to stay here. And we’re willing to build our own stadium in order to make that happen. The Sports Authority forced us to take this action by filing a lawsuit after making last-minute demands that sabotaged our negotiations to build a new stadium and by blatantly and consciously disregarding our rights under the lease. This action is necessary to enforce those rights and protect our franchise and our fans.”
Under the Giants’ lease agreement with the NJSEA, the state is obligated to provide the franchise with a state-of-the-art stadium. But Giants Stadium, which opened in 1976, is “hardly what anyone would call state of the art,” said Joe Shenker, an attorney from Sullivan & Cromwell who represents the Giants. According to the complaint filed today with the Superior Court in Bergen County, as more than 20 NFL stadiums have been built or substantially renovated since 1995, the 30-year old Giants Stadium has fallen far behind most NFL football stadia in terms of playing and practice facilities, infrastructure and fan amenities. Among the state-of-the-art features it lacks are up-to-date training and practice facilities, ample retail, concourse and concession space, sufficient premium seating, the latest sound and video technology and adequate restroom facilities.
Last month, the NJSEA filed suit against the Giants and asked the court to define exactly what “state of the art” constitutes.
“(The NJSEA) has consciously consigned the Giants to play in, and our fans to occupy, a stadium that is more state-of-decline than state-of-the-art,” Mara said. “We were given no choice but to assert our rights under our lease.”
The Giants said the NJSEA also violated the lease by permitting the construction of Xanadu to begin last month without the team’s approval. In its complaint, the Giants point out that the Xanadu project, as currently planned, will create gridlock at the stadium, interfere with the stadium’s pedestrian walkways and eliminate surface parking dedicated for the exclusive use of Giants fans, all in violation of the rights expressly granted to the Giants in their existing lease.
“The NJSEA also disregarded its contractual obligations to us when it authorized the Xanadu developers to begin construction,” said Steve Tisch, representative of the Tisch family ownership. “We are asking the court to stop this so that the issues we have with the project can be resolved in conformity with our rights under our lease. If we do not protect the rights granted to us by the NJSEA in our lease, our fans will suffer.”
The Giants’ court action today takes place four weeks after a proposed deal for a new 100 percent privately financed state-of-the-art stadium fell apart when the state sought to add a provision for taxing stadium luxury suites – which would have undermined the ability to privately pay for the new stadium – and demanded an immediate sign-off from the Giants on the Xanadu project without addressing the team’s concerns over its negative impact.
The demands came despite the considerable benefits of the new stadium plan to the state. Under that plan, the state would have been relieved of its current burden of operating, maintaining and improving the stadium – an operation that, according to figures provided by the state’s financial advisors, will lose more than $10 million dollars per year, as opposed to earning the profits claimed by the state. In contrast, the state would have received $6.3 million per year in rent under the new stadium deal.
Giants affiliates would have paid for the demolition and repaving of the old stadium and, in its place built – using entirely private funds – a new $750 million home for the Giants in the Meadowlands, including all required on-site infrastructure improvements. The only financial burden assumed by the state would have been to provide $20-$30 million of off-site infrastructure improvements, which cost would have been offset by $27 million in one-time fiscal tax benefits from the construction of the new stadium. A report by a Giants’ consultant, Conventions Sports & Leisure (CSL), projected that the new stadium would also have generated incremental fiscal benefits to the state of $12.5-20 million per year. In contrast, the state-of-the-art obligations under the current lease, even according to NJSEA’s own financial advisors, could cost the state tens of millions of additional dollars per year.
“We agreed to pay 100 percent of the cost of a new state of the art stadium for the Giants here at the Meadowlands, and in addition pay $6.3 million in annual ground rent to the authority,” Shenker said. “The authority would have been relieved of all of its financial obligations, including the ‘state of the art’ obligation, which is enormous. That deal involved no subsidies to the owners. To the contrary, it provided enormous fiscal benefits to the state, practically unprecedented in an environment where governmental authorities routinely provide subsidies to build stadiums.”
Shenker disputed an NJSEA claim that the authority makes $18 million a year from the stadium and, after subtracting the rent, would in reality suffer a net loss of $12 million a year.
“That’s a myth,” Shenker said. “The stadium is not currently profitable to the state and is not going to be profitable for the foreseeable future.”
Part of the reason for the shortfall is the anticipated departure from the stadium of the Jets, who last week received approval from the Metropolitan Transportation Authority to build a new stadium on the West Side of Manhattan. Mara was asked if the Giants are considering joining the Jets in New York.
“That’s not something that we’re looking to do,” Mara said. “That’s not our first choice. They seem to be pushing us in that direction. But our first choice is to build a new stadium here in New Jersey.
“Our preference has always been to build a 100 percent privately-financed new stadium. But if that is not an option – and there have been no negotiations for the past several weeks on that subject -- our second choice is to enforce our rights under the lease. And that is to get them to do what they are obligated to do, and build us a state of the art facility. It’s something we specifically negotiated for back in 1995 when we agreed to extend our lease. They agreed to always maintain and improve Giants Stadium so that it would always be a state of the art stadium.”
According to Tisch, three possibilities exist as the parties move forward, “The state fulfills its obligation and upgrades the stadium, at taxpayer expense; the state agrees to terms that allow us to privately finance a new stadium, at no taxpayer expense; or we will have no choice but to respond to what the state is really telling us: Giants, find a new home.”
Mara was asked what it would take for the Giants to look for a new home.
“We’re hoping that we don’t get to that point,” he said. “We intend to be successful in this lawsuit, and at the very least end up with a state of the art Giants Stadium. If we’re not, we’ll have to consider what our other options are.”
Copyright New York Giants 2005
I think the NY Giants need a new stadium. Maybe we can finally attract some real fans too.
