THE FIRM that built and manages the new Yankee Stadium parking garages can’t repay $237 million in tax-exempt bonds the Bloomberg administration arranged for it four years ago, new financial records show, according to the New York Daily News.
Bronx Parking Development Company LLC is running perilously low on cash reserves and faces a looming default by the end of the year, according to a report filed Friday by a trustee for the firm’s bondholders.
Time is running out, in other words, to avoid one of the biggest failures in decades of bonds issued by a New York City agency.
The simple fact is that Bloomberg and his aides made a costly mistake when they succumbed back in 2005 to the Yankees’ demand for a 9,000-space garage system. It was all part of the deal for the team to build a new stadium in the Bronx.
But Yankees fans have shunned the garages, where game day self-parking rates soared last year to $35 — up from $23 previously and more than double the original $14 charge. Valet parking now goes for $48.
So many fans are staying away, in part due to the lure of cheaper local competition, that Bronx Parking Development now projects only 3,500 paying customers per game for the upcoming season.
And that occupancy rate — a measly 38% — will exist only on days when the Bronx Bombers take the field. For the rest of the year, the garages will remain a ghost town, since a mere 70 South Bronx residents currently park there each day.
At the same time, Bronx Parking Development has turned into a giant tax deadbeat. The firm, which is not connected to the Yankees, has failed to pay any rent or property taxes, even though the garages sit on 21 acres of leased public land.
It currently owes the city a whopping $25 million.
In a desperate effort to preserve cash, the company plans to slash the salaries of a handful of full-time garage employees and to reduce the number of game-day parking attendants from 76 to 57. But those cuts are unlikely to stave of its collapse.
For the second year in a row, garage revenues will be “insufficient” to cover debt service payments due in April and October, the bondholder trustee said, thus triggering default provisions of the bonds.
The company’s chairman, William Loewenstein, has repeatedly referred all questions about the garages to the city Economic Development Corp., the agency that sponsored Bronx Parking Development’s creation. Two of Bronx Parking Development’s board members, in fact, are officials from the EDC and the Parks Department. Another is a representative of Bronx Borough President Ruben Diaz Jr.
“There’s no way this crisis can continue this way into next year,” one board member said.
Diaz has been pressing City Hall to come up with an emergency plan to restructure the bonds, tear down some of the garages, and replace them with low-income housing or even a new hotel.
But four private developers who responded late last year to a request from Diaz for hotel proposals all wanted major city subsidies, one official said.
“We continue to actively assist the (Bronx Parking Development) Board as it evaluates all options,” said EDC spokesman Dave Lombino.
Bloomberg’s aides say the city never pledged to back these bonds, nor did its Industrial Development Agency, the entity that actually issued them. Any loss, they say, will have to be borne by the bondholders.
So, while City Hall keeps washing its hands of any responsibility for this mess, overpriced garages on 21 acres of city land keep producing nothing of value for the public.