Willets Point Soccer Stadium Lands Critical Financing Amid Questions About Economic Impact

A soccer stadium in Queens that has been years in the making made several strides forward this week, landing a construction loan, releasing new renderings and announcing a new name for the facility.

The proposed new home of Major League Soccer's New York City Football Club, a long-awaited 25,000-seat stadium on Willets Point that is part of a larger development expected to yield thousands of affordable housing units, has been in the works since before the pandemic.

But despite the club's owners, developer partners and the city reaching a deal this year, the proposal has come under scrutiny as a fiscal watchdog has raised questions about the economic development projections used to promote the project.

Last week, the NYCFC released new renderings and an update: The soccer stadium would be named Etihad Park, after the national airline of the United Arab Emirates, per a release.

This week, the development inched even closer to the goalposts, signing a $425M construction loan with JPMorgan Chase, according to city property records first reported by PincusCo.

But on the same day NYCFC revealed the stadium’s new name, the New York City Independent Budget Office released a report highlighting that the city, in striking a deal that allows the developers to avoid property taxes or payments in lieu of taxes, could be forgoing more than $500M in tax revenues — or as little as $74M.

“There is consensus in the field of public economics that substantial government subsidies for sports facilities are typically not an efficient use of scarce public resources,” the IBO, a publicly funded fiscal watchdog, wrote in a release.

New York City Mayor Eric Adams said when he announced the deal in 2022 that the Willets Point stadium and surrounding development would generate $6.1B in economic impact over a 30-year period, creating 1,550 permanent jobs plus 14,200 construction jobs. The 2,500 new units would be the city’s largest fully affordable housing project in decades.

“We have a once-in-a-generation opportunity to create a brand-new neighborhood, a Willets Point that offers real opportunity for working people and all New Yorkers,” Adams said in a statement at the time.

The redevelopment is being rolled out in three phases. The first, which is slated to bring 880 affordable housing units, 220 affordable senior homes, a 650-seat public school and an acre of public space to the area, broke ground in December last year. The second phase involves building the soccer stadium, another 1,400 affordable housing units and a 250-key hotel.

The first and second phases are expected to be completed by 2027 and 2028, respectively. The third, which will introduce retail space, additional hotel rooms, office buildings and public space, isn’t expected to appear until 2039. But it’s the second phase, with the stadium itself, that is at the center of current controversy.

Etihad Park is being built on city-owned land, making it exempt from property tax liability, the IBO’s analysis said. But in scenarios like this, with public land being used for private purposes, the private company is often required to make payments that are equivalent to what property taxes would be.

However, the 49-year lease, approved by the Queens Borough Board this spring, doesn’t contain the typical requirement for payments in lieu of taxes, the IBO noted. The result is that the city has a choice as to which tax breaks it decides to give the stadium via a PILOT waiver, the watchdog report said.

The stadium will likely qualify for the Industrial and Commercial Abatement Program, relieving the facility of the majority of its tax burden, per the IBO’s analysis. The lease would result in a $538M tax bill if the city charged full property taxes, but could be as little as $74M with an as-of-right ICAP benefit. 

“While the construction financing of the stadium is entirely private, the City is still incentivizing the stadium development through granting a $0 PILOT payment and other tax exemptions,” the IBO’s report reads.

The city signed the ground lease with developers Related Cos. and Sterling Equities, which were announced as the developers on the deal two years ago. Related did not respond to Bisnow’s request for comment.

The New York City Economic Development Corporation didn't share details of how they reached their own economic impact estimate with the IBO, the report said. In response to Bisnow's request for comment, the EDC shared a letter that President and CEO Andrew Kimball sent to IBO Director Louisa Chafee on Nov. 8, calling the analysis “fundamentally flawed."

“The development and transformation occurring at Willets Point are truly a model for public-private partnership,” Kimball wrote. “The project demonstrates a smart, pragmatic approach to urban planning, economic development, and stadium deals that will be the new blueprint for cities across the country.”

The IBO didn't respond to Bisnow’s requests for comment. NYCFC declined to comment on the report, but a spokesperson told Bisnow that more than 20,000 fans attend each game.

“New York City FC continues to attract one of the highest average attendances in MLS,” said William Jones, NYCFC’s director of communications, adding that 45,000 people attended the September game against Inter Miami.

Games are currently held at Yankee Stadium, which has more than 46,500 seats. Yankee Global Enterprises, which owns the baseball team, is co-owner of the NYCFC. The other owners are investor Marcelo Claure, who picked up a 10% stake in September, and Sheikh Mansour bin Zayed Al Nahyan.

Mansour is the UAE’s deputy prime minister, a member of the country’s royal family and the owner of soccer teams including Manchester City FC. He became NYCFC’s primary investor in 2013.