Municipal Bond Forum
Tax-free bonds for stadium
Q
We’d like to build a new stadium for a municipal government and have them lease it from us. Is there a way to accomplish this with tax-exempt bonds?
A
James A. Klotz responds:
This has been done in a number of localities. There are a number of basic questions that would need to be answered, including: source of revenues to repay the bonds; terms of the lease; “essentiality” of the facility to the municipality; and others. You would need to consult a tax attorney to review the guidelines that would affect such a financing. Recent financings of this type were done by New York City for new stadiums for the Mets and Yankees.
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