The Real Deal New York

Moody’s downgrades NY Giants hometown because team avoids property taxes

January 19, 2012 09:00AM

As the New York Giants prepare for their highly-anticipated NFC Championship contest against the San Francisco 49ers, team executives are fighting a costlier battle, albeit with far less publicity.

According to Bloomberg News, team ownership is in court fighting against East Rutherford, N.J. to avoid paying property taxes for Big Blue’s training facility, the Timex Performance Center. Because the facility is the borough’s second-largest taxpayer by assessed value, the ongoing litigation compelled Moody’s Investors Service to downgrade East Rutherford’s credit rating, as it appears less certain to be able to cover its $16 million in general obligation debts. The downgrade will increase borrowing costs for the town.

The Giants believe they are exempt from tax payments because of an agreement that dates back to the 1970s, when the New Jersey Sports & Exposition Authority constructed the old Giants Stadium and agreed to pay $6 million annually to East Rutherford in place of property tax on the Meadowlands complex where the stadium sits. But East Rutherford Mayor James Cassella argues that the training center is a privately developed office building, and therefore should be taxed regularly. Now they are battling over a $745,000 tax bill the town sent the Giants for the practice facility in September 2010. [Bloomberg]