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Red Bulls and Town of Harrison settle on Red Bull Arena tax bill

After a lengthy battle of negotiations, both the town of Harrison and the New York Red Bulls have agreed to a settlement.

Red Bull Arena Tax Issue has been solved
Red Bull Arena Tax Issue has been solved
Vincent Carchietta-USA TODAY Sports

After a special meeting was held by the Harrison Town Council on July 14th the news was released that the city has come to an agreement with the New York Red Bulls along with the HCIA (Hudson County Improvement Authority) regarding a plan to settle the long-running dispute between town and club over taxes.

For almost two years, fans have heard about the debate between the Harrison and RBNY over the town being unable to collect any taxes from the New York Red Bulls after the team completed the construction of Red Bull Arena. Now that is set to change.

In this article by The Kearny Observer Online, it is reported that the current Mayor of Harrison, James Fife, and the club agreed to a compromise after seventeen months of negotiations. Both sides are now able to move forward with the following agreement in place.

#1: Red Bull will transfer to the HCIA the ownership of the stadium and the 12.34 acres of land on which the stadium sits. (In 2006, the HCIA sold $40 million in bonds for the acquisition, clearing, and remediation of the stadium site within the town-designated waterfront redevelopment area.)

#2: Red Bull will pay an annual rental of $1.3 million to the HCIA, with the rental to be "Escalated annually" based on a "12-month average of the Consumer Price Index for all urban consumers during the preceding year."

#3: Red Bull will continue to make the annual lease payments through 2038 and those payments "may be extended at Red Bull's option for four additional 5-year terms" through 2058. Ownership will revert to the town "at the end of Red Bull's lease term."

Also new is the town's added "right, but not the obligation, to require that Red Bull pay up to an amount that is double the town portion": it's an "accelerated payment option [which] shall be available for the 2017 and 2018 tax years only." Should the town exercise that option, then those payments would be credited against future amounts paid by Red Bull, " on a pro-rated basis, "from 2019 to 2038." In layman's terms, the town can ask for an advance on the Red Bulls tax bill that will then be returned to the team in the form of tax credits between 2019 and 2038.

Additionally, the Red Bulls will maintain an escrow fund of $1.95 million which may be taken by the HCIA and/or the town of Harrison if the club fails to pay its lease fee "on time and in full."

Former (deceased) mayor Raymond McDonough spent years working on bringing MetroStars to his town. Construction finally began on the Arena in 2007, and the team moved in - rebranded the Red Bulls - in 2010. However, despite the stadium being the center of Harrison's grand redevelopment area, for a while there was very little construction surrounding Red Bull Arena due to the economy crash and the housing market having issues. That has changed in the last two years.

As of right now, both sides are presumably happy that this issue is finally behind them. Now fans, club and city officials can concentrate on what is currently important: the team's ongoing MLS season the start of the Red Bulls' CONCACAF Champions League campaign.