Wednesday, October 17, 2012
By Jim O'Grady
(New York, NY - WNYC) With the company that owns the Yankee Stadium parking system staring down bankruptcy, Mayor Bloomberg called the situation "sad," and said his administration is "trying to help them."
Speaking during a press conference Q & A, the mayor addressed the issue of the stadium's foundering garages and lots, which have been only 42 percent full this season, according to this latest report.
"There just wasn't the business there that the owners, who made the investment, thought that there was going to be," the mayor said in answer to a question posed by a WNYC reporter. "If the owners of the parking garage can't make money, that's sad. We've got to find a way to help them."
The Bloomberg administration has already tried to help the company by having the city's Economic Development Corporation attempt to broker a deal with a real estate developer to build affordable housing and stores on some of the underused lots near an existing retail mall. But those talks have ended without a deal.
NYC EDC spokesman Kyle Sklerov wouldn't give specifics on the failed negotiations. Nor would he comment on an idea by Bronx Borough President Ruben Diaz Jr. to have the Bronx Parking Development Company build a hotel atop an empty garage. Sklerov would only say:“New options to develop the site will be considered moving forward as part of a larger effort by the BPDC board to get back on sound financial footing."
The scramble to find new revenue for the BPDC was set off by the company's long slide into default on $237 million in tax-free bonds. The NYC EDC acted as the conduit for those bonds, not the seller, so taxpayers aren't holding the debt.
Still, the default is a blow to the agency's reputation. Before the Yankees' new stadium was opened in 2009, Bronx residents and some civic groups tried to warn the city and the team that 9,000 parking spots spread across eleven lots and garages weren't needed. Their concerns went unheeded and the EDC facilitated the tax-free bonds that created a parking system sized to suit the Yankees' misguided desire.
The lots and garages have been underused--even during seasons, like this one, when the Yankees make the playoffs--and the BPDC is now in financial free fall.
Perhaps Mayor Bloomberg said it best when first asked at the press conference about the stadium parking: "Not everything works."
Thursday, October 11, 2012
By Jim O'Grady
(New York, NY - WNYC) The Yankees are in the playoffs after another successful season. But a key part of their stadium operation is a failure: the company that owns the Yankees Stadium parking garages has defaulted on more than $237 million in bonds.
The default means city taxpayers contributed about $39 million in subsidies to a project that is teetering on the brink of collapse. The city also spent $195 million to replace the parkland it gave to the Yankees, some of it now the site of languishing parking structures.
Financial advisor Edward Moran has told the Bronx Parking Development Company, a nonprofit that owns and operates the stadium parking system, that its cash flow can't keep up with its required payments to bondholders. Moran's analysis comes to a grim conclusion: “Unless debt service costs are lowered through a voluntary restructuring, bankruptcy will eventually be BPDC’s only option."
It is the Yankees' fourth season in their 50,287-seat stadium, a season that saw the team win its division while posting the second highest attendance in the major leagues. But the eleven parking lots and garages owned by the BPDC were only 43 percent full--and that's on game days. Other days, they're largely empty.
Most fans have been traveling to games by subway or taking a train to the new Metro-North station near the stadium. Others have looked for street parking or lots with prices lower then the $25 to $48 dollars charged by the stadium lots.
That means less money than expected for the company, which has been drawing from a reserve fund to pay off bondholders. That fund is all but depleted, which has thrown the company into default.
A source with knowledge of the company's finances tells TN that if bondholders can't be convinced to take less than the $15 million they're owed next year, the company is likely to declare bankruptcy. The next payment is due April 1.
Bettina Damiani of the advocacy group Good Jobs New York says Bronx residents tried to warn the city and the team that 9,000 parking spots weren't needed. "If only advocates and residents saying, 'I told you so,' would somehow make this go away," she said. "But the reality is officials and the Yankees refused to have anybody at the table on this decision."
The Yankees wouldn't comment for this story, except to say that the garages are owned and operated by a private company."The Yankees do not run them," spokeswoman Alice McGillion said.
But as TN has previously reported, the Yankees pushed hard in 2008 to add 2,000 parking spots, paving over parts of two nearby city parks to do it, even though the new stadium is smaller than the old one. The team made it a condition for staying in the Bronx.
Then Yankees president Randy Levine assured the City Council that despite the high cost of the new parking system, it would bring in sufficient revenue. "Those revenues will go back to pay the cost of the project and go to the city and a private operator," he said.
That hasn't been the case. Kyle Sklerov, a spokesman for the city's Economic Development Corporation, said that the BPDC owed the city $25.5 million in back rent and taxes as of the end of 2011. The company is obligated to pay its bondholders before it pays the city.
An arm of the city Economic Development Corporation approved the company's business plan before acting as the conduit for $237 million in tax exempt bonds. Sklerov said 5 percent of the corporation's bond issues are in default; the Yankee Stadium parking system has now joined that dubious list.
Marc LaVorgna, a spokesman for Mayor Bloomberg, said in an email that though the city will not be required to pay off the BPDC's debt, "we are going to continue to work with creditors to get the project back onto sound financial footing." He wouldn't give details on how that might be done. He referred TN to the city's Office of Management and Budget, which did not respond to repeated requests for comment.
Marlene Cintron, president of the Bronx Overall Economic Development Corporation, similarly refused comment. When asked whether the BPDC was in default, she said, "I’m not sure what the legal term is at this point in time."
In the meantime, Moran is telling the company that it "needs a dedicated manager and accounting person to control its operations." He also recommends wringing extra money from the parking spots during non-game days by pursuing deals with "circuses, ZipCar and auto dealer parking." BPDC attorney Steven Polivy didn't reply to emails and phone calls.
Damiani said the BPDC's default should be a lesson to the city. "If you're going to take your development cues from a corporation like the Yankees, I think it's safe to assume they don't have the residents' and the taxpayers' priorities in mind," she said, adding that "one of the lasting legacies of the Bloomberg administration, one of its most prominent economic development projects, is going down in flames."
The home games in the Yankees' playoff run will bring in more parking money. But then, the Yankees made the playoffs last year and that didn't prevent the company that runs the stadium's parking system from defaulting on $237 million of city-issued, tax exempt bonds.
Friday, February 04, 2011
(Andrea Bernstein, Transportation Nation) Call it the return of the Secaucus 7. New York City Mayor Michael Bloomberg has finally put some muscle into his proposal to extend the number 7 subway train under the Hudson River to New Jersey, making it the first NYC subway train to go to another state. It would be a substitute for the NJ Transit commuter tunnel, known as the ARC, or Access to the Region's Core, that New Jersey Governor Chris Christie killed last fall.
This week, Mayor Bloomberg's Economic Development Corporation voted to put a quarter of a million dollars into a three-month feasibility study of the tunnel. The contract for the study goes to Parsons Brinckerhoff, a major engineering firm that had been working on the ARC tunnel.
The firm is tasked with assessing demand and cost -- which Mayor Bloomberg, without any engineering studies behind him -- has said would be roughly half that of the ARC tunnel.
The head of the MTA, Jay Walder, has been genial about the project, but the agency is already struggling to pay for capital costs for its current system, and this week learned it would be faced with another $100 million in cuts from the state budget. Bloomberg does not control the MTA -- NY Governor Andrew Cuomo does -- though Bloomberg does have representation on the MTA board.
When the city was pushing construction of a stadium on the West Side of Manhattan, Bloomberg succeed in gaining MTA approval for extension of the #7 train to the far West Side of Manhattan by promising to foot the $2 billion in construction costs. But that was during flusher times, when neither the MTA nor the city was broke.
It's unclear whether the federal government's investment of $3 billion, lost when the ARC tunnel died, could be applied towards this project, or whether the Port Authority of New York and New Jersey would contribute funds, as it did to the ARC.
Here's the EDC documentation on the contract: