The city’s comptroller has the owner of the Brooklyn Cyclones caught in a squeeze play, an audit released this week reveals.
The Brooklyn Baseball Company (BBC) failed to pay the city more than $129,000 due to underreporting attendance, use of its recreation area, and special event income, the audit charged.
“The city should be fairly compensated,” Comptroller William Thompson said. “I urge the New York City Department of Parks and Recreation to pursue the full audit assessment of $129,692.”
The audit, which spanned Nov. 1, 2004 to Oct. 31, 2006, has already yielded results. The BBC has already paid the city $20,336, Thompson said.
In 2001, BBC entered into a 20-year lease agreement with the city, giving the company the exclusive right to use the ballfield, located on Surf Avenue in Coney Island.
Under the lease, BBC is required to pay annual rent to the city based on actual game attendance, a per-ticket fee based on actual attendance for the use of the recreation area, and for paid no-shows (persons who bought tickets but didn’t attend the game), the comptroller said.
The company must also pay monthly rent for the team store, deposit $27,670 each year into a sinking fund that permits Parks officials to perform capital projects at the stadium, and pay utility costs, among other lease requirements, the comptroller’s office stated.
Auditors determined that BBC maintained the required property and liability insurance and contributed the required $55,340 into a sinking fund, and submitted required reports on time.
But auditors found that during lease year 2006, BBC underreported actual attendance to Parks by 28,031, resulting in additional base rent of $83,009.
BBC did not properly calculate actual attendance because the company does not include bleacher seats in its count of actual attendance, Thompson said.
As a result, Thompson said, BBC owes the city an extra $6,874 for underreported no-shows and $7,849 for its underreported use of the recreation area.
Thompson indicated that as a result, BBC underpaid the city $97,732.
Auditors also found that BBC did not report $67,786 of special event net income to Parks, as required by its lease agreement, and as a result owes the city an additional $20,336 in shared special event income.
A BBC spokesperson said an official statement was being prepared, but was not made available at press time.
Thompson said similar problems were discovered in the past. He said BBC has yet to pay the remaining $9,064 (plus $2,560 in late fees) in additional fees for special events occurring in the 2003 lease year and to comply with a recommendation to ensure that income and expenses are appropriately reported on a document submitted to Parks.