Public Park for Profit
Against the National Tennis Center and the NYC Economic Development Corporation
Day 9 of Left Open, Club Leftist Tennis’ daily leftist coverage of the 2022 US Open
By Cea Weaver
Despite the overblown focus on some other racket sport’s popularity—tennis is having a moment right now. On Friday when Serena Williams played (likely) her final U.S. Open match, the tournament shattered its all-time single day attendance record. The following day, attendance broke the record again. Through Labor Day, tournament attendance was at 549,657, the highest ever eight day total. When the final numbers shake out for this year’s tournament, it’s likely to be the most attended in history, finally climbing up from its pandemic nadir.
After a record 737,919 people attended the Open in 2019, zero attended in 2020 (a wise choice re: COVID policy, but zero nonetheless). In 2021 attendance bounced back up to 631,134, so for the previous three years let’s say the U.S. Open served just under 500,000 people annually. Despite serving such a large number of fans, it cannot be claimed that the Open, or the grounds and facilities in which it takes place, is for the people. Instead, the Open represents a corrupt, inefficient and undemocratic model of economic development which must be abolished.
The Open has been in Flushing Meadows since 1978, when it moved to the public park from a private tennis club in Forest Hills, a move negotiated by then-State Assemblymember David Dinkins. In 1993 Dinkins, now as Mayor, orchestrated another multi-billion dollar subsidy package to keep the U.S. Open and the National Tennis Center in New York City.
Under the agreement, the United States Tennis Association (USTA) was given a 99-year lease to operate a public recreation center—the Billie Jean King National Tennis Center (NTC) in Flushing Meadows Park. Flushing Meadows Park is one of the largest and most visited parks in New York City: 12 million people come to Flushing Meadows annually (24 times the number of people who attend the U.S. Open).
In order to use the public park, the NTC pays the City of New York $400,000 a year in rent, as well as 1% of revenues over $20 million back to the City. According to the City’s comptroller, this was about 5.8 million in 2017 (the year of the most recent audit). The NTC does not pay any property taxes, though it does pay water and sewer charges. The NTC was also built (and over the years, renovated) with $322,025,000 in public, tax-exempt bonds.
All this subsidy is because the Open, despite its $48,000 tickets and $22 “Honey Deuce” cocktails, technically takes place in a public park and in a “semi-public” National Tennis Center that is supposedly open to all of us.
Over the years, the Open has been criticized by community groups and neighborhood residents for the strain it places on the park, as well as the inequitable distribution of resources the massive tax subsidy represents. While New Yorkers can play on the NTC courts during the 50 weeks of the year the U.S. Open does not take place, court-rental is significantly more expensive than other New York City public courts, and the space itself—with eight foot tall, often-locked gates—is not particularly welcome to the low-income and working class New Yorkers who live in the Queens neighborhoods surrounding Flushing Meadows Park.
While the Open might be a particularly visible example of millions of dollars in public land and subsidies targeted towards the USTA corporation, the world’s tennis elites, and its 500,000 relatively privileged fans, it’s far from unusual.
Benefits to the USTA flow through the New York City Economic Development Corporation (NYCEDC) and its Industrial Development Agency (IDA) program. The NYCEDC is a quasi-public non-profit organization, controlled by the Mayor of New York City who appoints its CEO and names its members. The members annually elect a Board of Directors. The mission of the NYCEDC is to leverage the City’s “assets” to drive economic growth.
To break this down a little bit: New York City’s two largest “leverageable” assets are:
Land—Extraordinarily valuable, and something that the EDC can make more valuable by facilitating rezonings to increase buildable square feet, and
Workers (or, in corporate parlance, “talent.”)
So in practice this basically means the EDC doles out lavish tax subsidies and public land to private corporations in exchange for jobs.
What kind of jobs? How many jobs? It’s a good question. The NYCEDC doesn’t know, and neither do we!
In the name of reducing government inefficiencies, contracts that flow through the NYCEDC face significantly less public oversight and fewer regulations than typical government agencies. Among other things, NYCEDC projects are not always subject to the same union-workforce requirements as other jobs created by the public sector. So though the NYCEDC might create a workforce (might is an operative word), we don’t necessarily know where they are, how stable they might be, or what wages workers are paid.
And what about land?
In New York City, land values are extraordinarily high—a contributing factor to the city’s out-of-control housing crisis. The NYCEDC, which does not not require developers to pay conventional property taxes but rather collects “payments in lieu of taxes,” allows its corporate beneficiaries to retain in private profit the benefits associated with rapid increases in land-values on New York City real estate. When it comes to housing deals, the NYCEDC may collaborate with developers to navigate valuable rezoning deals in gentrifying neighborhoods while the associated promised community benefits never arrive.
In addition to being a woefully inefficient way to deliver subsidies, the opaque NYCEDC model of executive power undermines working-class organization—labor unions, community institutions and more—that are the building-blocks of any bottom-up participatory democracy. These types of organizations provide the political coalition necessary for a strong and functioning welfare-state in New York; the NYCEDC on the other hand has been a tool used by the City’s elite to capture control of our public sector.
Last year in New York Focus urban-planners Avi Garelick and Andrew Schustek called to abolish the NYCEDC. As they say: “We should seek to abolish the EDC and establish more democratic forms of deciding what gets developed and how the public pays for it.” (Read their whole article, it’s much more thorough than this one.)
Abolishing the NYCEDC (and—why not—its state-level sister agency the New York State Empire Development Corporation while we’re at it) would be a massive paradigm shift in how New York City does economic development. Since the 1970s fiscal crisis in New York, municipal governments have forgone direct subsidy or capital investment in favor of tax breaks to subsidize private sector growth.
The idea, as Avi and Andrew explain, is a mutant version of a Kenysian multiplier effect: “In classic Keynesianism, the multiplier effect starts with the government actually providing jobs. The government hires workers to, say, build a dam, and then the workers spend their wages, supporting businesses and strengthening the economy. In the EDC’s theory, the multiplier effect starts with the government giving money (or cheap land) to businesses. These businesses then make vague and unenforceable promises to do some hiring.”
Whether or not the NYCEDC model was ever a good idea for New York is debatable, but setting that aside—the economic conditions of 2022 New York are not the same as those of the 1970s, and our governments must stop pretending that they are! Rather than divestment and decline, New York City faces a crisis of inflated land values and hyper-gentrification. Land in New York City is a finite resource and the housing affordability crisis is worsening every day. Our city can no longer afford to make public policy along the NYCEDC model: we need public sector development, democratically controlled by New Yorkers, to create good union jobs and new public housing for people of all income levels.
But for right now, we don’t have democratic control of New York’s economy. The U.S. Open is ending soon and chances are it has already netted more than $20 million, crossing the threshold at which it owes money back to the City. Governor Kathy Hochul has already vowed she will not raise taxes on the rich, so the public will have to settle for 1% of profits off $22 cocktails. This is all to say: if you’re attending the U.S. Open in the next couple days and you’re looking for an excuse to spend your money, remember that Eric Adams just slashed our school budget and New York City needs all the revenue it can get—drink up.
Cea Weaver is the campaign coordinator for Housing Justice for All, New York’s statewide coalition of tenant groups.