Unique tax-exempt legal structure saves Yankees and Mets.

Nixon Peabody LLP announced the completion of baseball stadium financings for two Major League Baseball teams--the New York Yankees and the New York Mets.

The deals ensure that future generations of New Yorkers will be able to cheer their favorite teams in new stadiums without increasing taxes, thanks to a first-of-its-kind financing structure conceived of and developed by Nixon Peabody.

The structure allowed both stadiums to be financed primarily on a tax-exempt basis through the issuance of bonds supported solely by negotiated payments (in lieu of taxes) to be made by affiliates of the teams.

To develop this innovative structure, the firm prepared and successfully obtained two separate private letter rulings from the Internal Revenue Service on behalf of the New York City Industrial Development Agency (NYCIDA). As a result, the Yankees and the Mets have on a combined basis saved in excess of $200 million in financing costs.

An important component of the innovative strategy employed by Nixon Peabody was to have the city lease the land on which the stadiums are to be built to the NYCIDA, which in turn leased the land to the baseball teams in order to create a mechanism for the teams to make PILOT payments which support the bonds issued to finance the stadiums.

During the course of both engagements, the firm was involved with every aspect of the transactions, negotiating, reviewing and drafting the documents and agreements relating to the development, financing and construction of the stadiums.

It was a highly complex deal that involved many separate parties who had to be satisfied in order for the transaction to take place--the City of New York, the IRS, the teams, Major League Baseball and the NYCIDA. As a result, Nixon Peabody attorneys with experience across many practice areas, including sports finance, tax, real estate, business and securities law, were brought in to work on the matter.

Mets' finance counsel Fulbright & Jaworski L.L.P. worked with counsel to the City of New York to come up with the financing mechanism.

"The new Mets stadium is a major project for the city, the state and the team. Because of the size of the project and limitations of New York State law, creative thinking was needed to secure financing in a manner that would meet the needs of all parties" said Fulbright & Jaworski partner, Joel H. Moser, who led the firm's team of attorneys in representing the Mets.

"The PILOT bonds are a true advance in public-private financings, and have helped to secure a new home for the Mets after 43 years."

Fulbright's work on the Mets stadium is just the latest in a long string of major stadium and arena financings that the firm has worked on.

The firm has served as counsel on financings in most of the US markets that they have offices in, including stadiums in Los Angeles, Dallas, Houston, San Diego and San Antonio, among others.

The firm has also served as lead counsel to some of the top infrastructure and project finance related deals throughout the world, including public private partnerships for major transportation projects and project financings of every type.

In addition to Moser, working on the transactions for Fulbright were partners Richard Kornblith, David Gillespie, Lawrence Spector and Sean Corrigan and associates Chauncey Pilgrim, Elizabeth Condren, Craig Johnston and Michael Pikiel.

Nixon Peabody represented the City of New York Industrial Development Agency (NYIDA) for both stadium projects and has been engaged with the NYIDA since January 2001.

Nixon Peabody has one of the largest public finance practices in the U.S. and regularly ranks among the ten most active bond and underwriter counsels nationally in dollar value of bonds issued.