Yankee Stadium Parking Developer On Verge of Defaulting On $237 Million Of Tax-Exempt Bonds

The developer warned bondholders in an Aug. 18 letter that it currently has "insufficient funds" from operations to pay a $6.8 million interest bill due Oct. 1, and another $6.8 million due next April. Bronx Parking has failed for three years to pay its annual rent tab of $3.2 million to the city. It also has yet to pay any property taxes for the 21 acres of publicly owned land it is leasing to operate the parking system.

The Bloomberg and Pataki administration allowed 25.3 acres of public parkland to be seized in the South Bronx in order to accommodate the building of a new stadium for the New York Yankees, including the building of thousands of additional parking spaces in the asthma capital of America.

Bronx

The developer of the Yankee stadium parking system is on the verge of defaulting on $237 million in tax-exempt bonds issued by the city's Industrial Development Agency, according to the New York Daily News.

So many fans are shunning the network of 9,000 stadium parking spaces that revenue for the first half of 2010 was only $4.8 million - half of what was projected - according to a stunning financial disclosure by Bronx Parking Development.

The firm, which is independent of the Yankees and has existed for only three years, warned bondholders in an Aug. 18 letter that it currently has "insufficient funds" from operations to pay a $6.8 million interest bill due Oct. 1, and another $6.8 million due next April. And despite an additional $100 million in city and state grants it received on top of IDA bonds, Bronx Parking has failed for three years to pay its annual rent tab of $3.2 million to the city. It also has yet to pay any property taxes for the 21 acres of publicly owned land it is leasing to operate the parking system.

So why have these garages been such a fiasco? After all, the Yankees won a championship their first year in the new stadium and the team is currently exceeding its own revenue projections.

According to Bronx Parking, the garages have suffered from several unforseen problems:

• More than 800 fans are heading on game days to the Gateway Shopping Mall five blocks from the stadium, where they pay only $10 to park instead of the stiff $23 self-parking fee ($35 for valet service) at the stadium garages.

• A new Metro North station has lured many fans (about 5,000 per game) to ride the train.

• The Yankees prepaid for only 190 parking spaces this year for their season ticket holders instead of the 900 spaces they prepaid last year.
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The firm's announcement sparked an immediate drop in the trading value of its bonds. It also sent city officials scurrying to come up with a solution to what could be the biggest default of an IDA bond that anyone can remember.

"If these garages are only at 60% of capacity after a World Series victory, you know it can only get worse from here," said one city official with direct knowledge of the project's finances. "There's just too much unused parking around the stadium."

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Yankee Stadium parking stalls out after developer shows signs that it may default on bonds

New York Daily News - September 10, 2010 - By Juan Gonzalez