Developers Saved the U.S. Open
By JULIA VITULLO - MARTIN
Ms. Vitullo-Martin is a senior fellow at the Manhattan Institute.
New Yorkers pretty much take the celebrated U.S. Open, held each fall at the National
Tennis Center in Flushing Meadows-Corona Park, as their birthright. Yet like the many
heirs in history who lost their legacy through neglect or stupidity, we almost lost ours
during the dark days of the mid-1970s.
In 1976 the city government narrowly averted bankruptcy in part by refinancing
mountains of debt, raising taxes, and cutting services. The streets were filthy and
crime-ridden, whole neighborhoods were burning, and many landlords were simply walking
away from their buildings, abandoning them to the city rather than paying taxes. People
and corporations were fleeing in droves. As Senator Goodman told the New York Press Club,
prostitution seemed to be the only business that wasnt leaving the city.
Then a wildcat oilman from Mississippi, Slew Hester, who was president of the United
States Tennis Association, stepped forward to announce that the USTA would not be renewing
its contract with the stately West Side Tennis Club in Forest Hills, which had been home
to the open since 1924. Cheerfully accepting his role as public villain, Hester said he
would be touring the country to look for the best site for the U.S. Open.
At the time, the city was presided over by Abraham Beame, perhaps the most
underqualified mayor of the 20th century which had several. But Beame had a good
friend, Lewis Rudin, the real estate developer, who was also a tennis fan. Rudin offered
to join Hester in the search for a new site. Flying low over Queens in Hesters
private plane, they spotted the derelict Louis Armstrong Stadium originally called
the Singer Bowl in Flushing Meadows park. A leftover from the 1964 Worlds
Fair, the Armstrong Stadium had seldom been used since.
Of course, seeing value where others dont is what a good developer does. Thats
how the Rudin fortune was made in real estate and the Hester fortune in oil. They went
together to the Parks Department in January 1977, proposing to reconstruct the old stadium
under a 15-year lease. With Rudin as the broker, the USTA signed an agreement with the
city four months later an extraordinarily short period of time for anything to get
through the city bureaucracy.
In exchange for leasing 16 acres to the USTA, the city got a $10 million reconstructed
stadium, seating 26,500 people and providing both indoor and outdoor courts. The stadium
would be available to the public 305 days a year. The city also got an annual minimum
payment of $125,000 or a percentage of minor fees, whichever was greater. The
greater never turned out to be the fees, since Hester excluded the USTAs
major fees from city participation. Thus the city could receive
10% of the fees from renting tennis courts to the public, 50% of rental and concession
fees for all non-USTA events, which would be grubby and few, and 50% of food and beverage
receipts for non-USTA events. The city also got $175,000 or so annually from parking fees
at adjacent Shea Stadium, which it owned.
The first USTA lease was negotiated in the days before the Parks Department learned to ask
for a percentage of the fees that really
mattered to any lessee such as a percentage of big event admission fees and
When the lease expired in December 1993, the Dinkins administration agreed that the USTA
could build a new stadium, and negotiated a 99-year lease for 46.5 acres, requiring the
USTA to pay a base rent of $400,000 plus 1% of its gross revenues, including admissions,
television earnings, and concessions. Thus the city now gets a percentage of the
opens famous $10 hamburger and other pricey food as well as a cut of admissions
bought by the opens 600,000 attendees. Last year, the new lease yielded $1.8 million
to the city, according to the chief accountant for revenue in the Parks Department,
While the U.S. Open is spectacularly successful, no one regards its new home as beautiful.
Ticky-tacky metallic Flushing Meadows, wrote sports writer George Vecsey, who
continues to miss the ivy and the grass and the manners of Forest Hills.
Once a garbage dump, announced the New York Access Guide. Now a triumph
In 1997, the USTA opened the $250 million Arthur Ashe Stadium, named for the athlete who
was the first African-American man to win both Wimbledon and the U.S. Open. The
worlds largest tennis stadium, the Ashe stadium regularly opens to capacity crowds
filling its 23,000 seats. Offering the largest purse of any Grand Slam in the world, the
Open attracts the most renowned athletes and most rabid fans.
It is also a jewel in the citys economic crown. The mayors office says that
the U.S. Open has the greatest economic impact on New York City of any sporting
event. The Sport Management Research Institute calculates that the Open produces an
annual economic impact of $420 million in New York, New Jersey, and Connecticut.
The permanent presence of the U.S. Open in New York is living proof that
public-private-partnerships can pay off in immense public benefits that couldnt be
won by either sector alone.