With hundreds of thousands of fans flocking to Flushing next week to watch the U.S. Open, City Comptroller Scott Stringer revealed that the U.S. Tennis Association (USTA) owes the city over $311,000 in rent for the Billie Jean King National Tennis Center at Flushing Meadows Corona Park.
According to an audit Stringer’s office conducted, the USTA National Tennis Center Inc. (NTC) underreported at least $31 million in gross revenues from 2014 to 2017. The NTC did not submit regular annual certified financial statements to the city, Stringer’s audit found.
Additionally, the audit stated that the financial statements from USTA reported $8 million more in U.S. Open and Tennis Center program revenue, which was more than the gross revenues NTC reported from 2015 to 2017. This means that NTC could owe the city up to $82,310 in addition percentage rent.
“An organization as revenue rich as the USTA should not be fudging its finances and should not be nickel-and-diming New York City,” said Stringer at a press conference at the USTA tennis center.
In a financial breakdown, Stringer said that the organization underreported over $11.5 million in in-kind benefits, sponsorship deals and broadcasting rights, translating to at least $115,000 in additional rent. His office found that the USTA also deducted over $10 million in operating expenses — $100,000 in rent to the city. USTA also underreported $4 million in sponsorships and omitted $5 million in ticket fees.
In December 1993, the organization signed a 99-year lease with the city through the Parks Department. The terms of the lease said that NTC must pay $400,000 in rent plus one percent of its net gross revenues over $20 million.
According to Stringer’s office, the NTC contested parts of the audit, saying that, “Following a thorough review of the Draft Audit’s conclusions, the USTA NTC has concluded, based on the legal interpretation of the Lease and the consistent application of GAAP accounting standards, that it should report $14,329,660 as additional Gross Revenues and pay $143,297 in additional rent for the 2014-2017 period.”
The organization disputed $167,905 of the $311,202 in percentage rent and accused the city of misinterpreting the terms of the lease.
Stringer said that the lease is not in the city’s best interest due to stipulations preventing Parks from properly monitoring and enforcing NTC compliance. Furthermore, the lease does not allow Stringer’s office to independently audit NTC’s compliance, according to the comptroller.
QNS reached out to the USTA for further comment and is awaiting a response.
