Yankee Parking Garages Narrowly Avoid Default - Again. Debacle Continues

Results from Aggressive Yankee Parking Revenue Forecasts Promoted by the City's Economic Development Corporation (EDC) and the Bloomberg Administration Priority To Make A Deal At Any Cost Are Finally Hitting Home For Some. Bronx Parking Development Company's revenues are so dismal that it will have to dip into its debt reserves for the second time in a year just to pay the $ 6.9 interest on its bonds due April 1. Bronx Parking issued $237.6 million of municipal bonds in 2007 through New York City’s Industrial Development Agency to build three parking garages and renovate two others. Last week the debt traded at about 60 cents on the dollar. (Photo: Simmons/NY Daily News)

On top of that, the firm - a nonprofit the Bloomberg administration selected and the state subsidized to operate the stadium garages - owes the city $17 million in back rent and taxes for the 21 acres of public land it uses.

The funds were "supposed to" make up for lost city revenue Bloomberg gave away to the Yankees in their deal to build a new stadium. The City received revenue from owning the old Yankee Stadium.

"The public will never see a dime of rent and taxes from this project as it now exists," one official close to the garage company told the New York Daily News.

The company was thrown a life-line at a Monday night meeting when directors agreed to a set of demands from the bondholders in exchange for a one-year "waiver" from a complete default and takeover.

"The agreement will give BPDC and the bondholders time to evaluate potential remedies to the current shortfall," said Bloomberg head cheerleader for the project EDC's Seth Pinsky.

"Over the next year we will be in discussions with all parties involved to evaluate potential alternatives, and should those parties agree, all options will be considered."

A default could set up a seizure by bondholders and would leave the garages' future in question. For the City and the bondholders this embarrassing and potentially very costly situation could mean attempting to develop one or more of the unprofitable garages into something else.

Apparently not all that concerned about the prospect of facing community wrath over the loss of more than 25 acres of public parkland, one option that Bronx Borough President Ruben Diaz Jr. has been advocating is to tear down one of the big garages and build a new hotel.

The Bloomberg and Pataki administration fought to seize 25.3 acres of public parkland 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. The Bloomberg administration selected Bronx Parking in 2007 to build and run the garages after the Yankees demanded a minimum of 9,000 spaces to stay in the Bronx. As predicted the Yankee organization's insistence of building more parking turned into a nightmare for the city's taxpayers and community residents. - Geoffrey Croft

Bronx

The operator of parking garages at the new Yankee Stadium, whose revenue is running 40 percent below projections, will make its April 1 debt payment, according to Nuveen Asset Management, which holds about half of the bonds, according to Bloomberg.

Bronx Parking Development Co., a subsidiary of a non-profit development agency, will make the payment through a combination of operating revenue and a draw on its debt-service reserve fund, John Miller, Nuveen’s chief investment officer, said in an e-mail. According to Bronx Parking’s 2011 budget, it owes $6.9 million on April 1. The reserve fund will decline by a $5.5 million draw, according to the budget.

April 23, 2010 - Parking Lot A- (Former 2.9 acre ball field in Macombs Dam Park) No Surprise. For years critics of the Yankee Stadium redevelopment project have predicted the city's tax-payers would be on the hook for the $340 million parking garage system deal negotiated by the Bloomberg administration. A default could set up a seizure by bondholders and would leave the garages' future in question. Compounding the problem, the administration gave the Yankee organization 600 free spots in the VIP garage. (Photo: Geoffrey Croft/NYC Park Advocates) Click on Image to enlarge.

Bronx Parking issued $237.6 million of municipal bonds in 2007 through New York City’s Industrial Development Agency to build three parking garages and renovate two others at the 50,287-seat stadium, home of the New York Yankees Major League Baseball team. The stadium, which opened in 2009, was built across the street from the original ballpark.

The garages and parking lots managed by the non-profit have generated 39 percent less revenue in the first nine months of 2010 than projected, according to financial statements.

The public financing of the garages, which included $102 million from the city and state, was assailed by neighbors who said the facilities would lead to more traffic congestion and pollution in the South Bronx, while providing no benefit to the community. Labor-backed groups said the city and state shouldn’t subsidize low-wage jobs.

Subway Service

The parking garages face competition from public transportation, as most city dwellers take the subway to games. Fans who live in New York’s Westchester County or Connecticut can take theMetro-North commuter rail.

For the nine months ending Sept. 30, Bronx Parking collected $6.2 million less in revenue and sales taxes than budgeted, according to a financial statement filed on Dec. 30. Bronx Parking plans to charge $35 per car this year, compared with $23 last year.

Nuveen, based in Chicago, owned $116.5 million of the bonds as of the end of February. The debt traded March 17 at about 60 cents on the dollar, according to data compiled by Bloomberg. Bonds maturing in 2037 yield about 10.2 percent.

Bonds Attractive

In a March 18 note, Morgan Stanley said the bonds look attractive and are worth at least 80 cents on the dollar. The start-up parking system hasn’t reached its full potential, wrote Peter Block, a Morgan Stanley executive director, in fixed- income trading.

“Bonds are worth at least 80 to the extent the Yankees continue to draw consistently strong attendance as they have done historically, and Bronx Parking Development Co., the project owner, continually monitors and adjusts parking rates as needed over time,” Block wrote.

The Yankees led all Major League teams in attendance last year at 3.77 million, according to ESPN. The garages and lots have 8,428 spaces available to the public. The Yankee stadium garages had an occupancy rate of 60 percent last year, which will continue in 2011, according to Morgan Stanley.

Bronx Parking’s debt service reserve fund will shrink to $11 million from $16.6 million, according to its 2011 operating budget. The debt-service coverage ratio, or the amount of cash available to meet annual interest and principal payments, is 0.56, according to the budget.

Pricing Power

Morgan Stanley’s Block wrote that he wasn’t concerned about the draw on the debt-service reserve because 63 percent of trips to games at the stadium during weekdays are made by car and drivers have limited parking options, giving the garages “adequate” pricing power to raise rates.

To avoid a default, Bronx Parking would have to raise parking rates to $42 in 2013 and to $55 by 2016, Block wrote. The garages will have enough revenue to fully pay debt service by 2015, Block wrote.

William Loewenstein, president of the Community Initiatives Development Corp., the non-profit parent of Bronx Parking Development Co. based in Hudson, New York, about 100 miles (160 kilometers) north of the Bronx, didn’t return a call seeking comment.

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Yankee Tax - Payer Built Parking Garages Near Default

April 23, 2010 - Parking Lot A- (Former 2.9 acre ball field in Macombs Dam Park) No Surprise. For years critics of the Yankee Stadium redevelopment project have predicted the city's tax-payers would be on the hook for the $340 million parking garage system deal negotiated by the Bloomberg administration. Bronx Parking Development Co., which runs the garages for the new stadium, faces an April 1 due date for a $6.8 million interest payment on bonds issued to fund construction of three parking facilities. The private development company had to dip into reserves to make a similar payment in October, and—barring a last-minute renegotiation—all signs point to a default this time. A default could set up a seizure by bondholders and would leave the garages' future in question. Compounding the problem, the administration gave the Yankee organization 600 free spots in the VIP garage. (Photos: Geoffrey Croft/NYC Park Advocates) Click on Images to enlarge.

The Bloomberg and Pataki administration fought to seize 25.3 acres of public parkland 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. The Bloomberg administration selected Bronx Parking in 2007 to build and run the garages after the Yankees demanded a minimum of 9,000 spaces to stay in the Bronx. As predicted the Yankee organization's insistence of building more parking turned into a nightmare for the city's taxpayers and community residents.

May 20, 2009 - 2.9 acre ball field in Macombs Dam Park. Not Getting it. For more than 70 years the public used the parkland, including this ballfield that the elected officials allowed to be taken for a Yankee parking lot. Instead of restoring parkland that was seized from the community, Borough President Rubén Díaz Jr., is suggesting building a hotel on it, an irresponsible idea left over from the previous BP, Adolfo Carrión, Jr. Elected officials, including then State Assembly member Díaz Jr. allowed the Yankees to take the 25.3 acres of public parkland which, among other things, resulted in a net loss of parkland in the community.

Bronx

The first pitch of the baseball season and the return of thousands of fans cannot come fast enough for most businesses around Yankee Stadium. But one company might prefer that April be postponed this year. Bronx Parking Development Co., which runs the garages for the new stadium, faces an April 1 due date for a $6.8 million interest payment on bonds issued to fund construction of three facilities. The company had to dip into reserves to make a similar payment in October, and—barring a last-minute renegotiation—all signs point to a default this time, according to Crain's.

A default could set up a seizure by bondholders and would leave the garages' future in question. The property, which covers some 21 acres, was part of parkland taken over to make way for the current incarnation of Yankee Stadium. The potential irony has some in the community seething.

“Our community loves its parks, and we could always use more,” said Pastor Wenzell Jackson, chairman of Bronx Community Board 4, which includes the stadium and the surrounding area. “Now there's just empty parking garages that are not benefiting the community.”

A spokesman for Bronx Parking declined to comment on its financial situation. Its parent company, Community Initiatives Development Corp., also would not comment.

BUILD A HOTEL

Community leaders, including Borough President Rubén Díaz Jr., are planning for what comes next. “We've been working diligently to bring a top-flight hotel to the area near Yankee Stadium,” Mr. Díaz said in his State of the Borough Address late last month. “As many of you have heard, the Yankee Stadium parking lots are facing severe financial problems ... and we believe one of the garages could be used for the hotel development.”

It's clear that not all the garages are needed. In August, Bronx Parking admitted that the facilities, which contain 9,000 parking spaces, were never more than 60% full on game days. As a result, it said, revenues were insufficient to service the more than $237 million in tax-exempt bonds issued to fund its project, which involved building three new garages and refurbishing several existing ones.

The garages have more competition than any party involved anticipated—including the city's Industrial Development Agency, which issued the bonds in 2007.

Last year, Bronx Parking officials complained that an estimated 800 cars a game were parking at the nearby Gateway Shopping Center. And for good reason: Spaces at the center cost about $4 an hour, compared with $23 a game for a self-park space in the stadium garages (or $35 for valet service). This year, rates will increase to $35 a game ($45 for valet), according to the company's 2011 operating budget.

Bronx Parking also blamed its shortfall on Metro-North and its new train station at Yankee Stadium, which the company said is reducing the number of cars—the very purpose for building the station (with public money).

According to Metro-North data, an average of 3,900 attendees use the train to get to weekend games, and 3,200 take the train to games during the week.

Meanwhile, residents have groused that despite the garages, street parking spots are consumed by fans on game days.

TIME TO RECONSIDER

Local leaders said it's all a waste.

“The first step should be to reconsider how they're using these parking lots,” said Lourdes Zapata, senior vice president of SoBro, the South Bronx Overall Economic Development Corp. “Looking at them exclusively for parking is a shortsighted way of looking at development in this area.”

The air rights could be used for other commercial purposes or for building housing, Ms. Zapata said. “At this point, I don't think anything should be off the table,” she remarked.

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Yankee Stadium parking strikes out

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Mud Lawn Frustrates Users In Battery Park City

The Lawn - 2011. The new field in West Thames Park turned to mud shortly after it opened last summer and residents are not happy. The contractor who built the park used the wrong kind of sod according to the Battery Park City Authority. Despite strong community opposition, NY State Department of Transportation (DOT) went ahead with the controversial $ 9.4 million plan which removed the original playground to accommodate "Pataki's Promenade," a plan left over from the previous administration which extended the promenade north, through the playground. The plan also destroyed more than a dozens trees.

State DOT, which built the park for the authority, planned to install new sod in April or May, a spokesman said. (Photos: By Julie Shapiro/DNAinfo )

The Lawn - Spring 2010. Irrigation issues on the lawn and poor drainage in the children's spray shower area have added to the frustration of park users.

Manhattan

The new sports field in West Thames Park is still little more than a mud puddle, more than eight months after its ceremonious opening, according to DNAinfo.

The field's grass died almost immediately after children first began playing on it last summer, and since then it has drawn complaints from residents who are upset that their highly anticipated, promised field is just a large stretch of dirt.

"It's very unpleasant," said Robert Mueller, a board member at the Battery Park City Authority. "It's right in the middle of everything … It's such an obvious eyesore in a place where we have no eyesores."

Mueller, who lives in Battery Park City, said at a board meeting this week that his neighbors kept asking him what's going on with the field.

Gayle Horwitz, president of the Battery Park City Authority, replied that the contractor who built the park used the wrong kind of sod. The sod has a layer of clay underneath it, which prevented drainage and stopped the grass from growing, she said.

The State Department of Transportation, which built the park for the authority, planned to install new sod in April or May, a spokesman said. The field will then be closed for several weeks while the root knits into the soil, so the new grass lawn will not be ready until mid-June at the earliest.

Jessica Weitzman, 38, a Battery Park City resident who brought her 7-year-old son to the park recently, said the mud didn't stop kids from playing on the field, much to their parents' chagrin.

"They have literally destroyed their clothing," Weitzman said. However, she added, "We're so desperate for [playing] space — at least we have some space to run around."

Sunita Iyer, 40, another neighborhood mother, said the lawn was perfect when it was covered by snow this winter, but the springtime mud puddles are becoming a problem.

"I hope they'll fix it," Iyer said. "It's one of the only fields that's open [year-round]."

The tire swing in West Thames Park was taken down shortly after the playground opened last year after several children were injured. The swing has still not returned. The State planned to reinstall the tire swing this spring at the request of Community Board 1, but they had not set a date, a spokesman said.

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Muddy Battery Park City Field Called an 'Eyesore'

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No Housing In Brooklyn Bridge Park Critics Assert Once Again

No housing in Brooklyn Bridge Park was once again the strong message voiced in reaction to the Bloomberg administration's plan to put residential buildings inside the controversial park. Dozens of Brooklyn residents, environmental groups, and concerned citizens spoke out last night at a public meeting held at Long Island College Hospital to discuss alternative funding ideas to the housing plan.

In 2002, without a single public hearing, Mayor Bloomberg and Governor Pataki entered into Memorandum of Understanding (MOU) that required Brooklyn Bridge Park be "financially self sufficient," with annual maintenance and operation expenses funded by revenue generated from the park. This MOU was a re-interpretation of the community's commitment to help support park operating costs. The Mayor has further reinterpreted the MOU to include that revenue generated from the park must also cover certain capital improvement expenditures as well.

In March 2010, the City entered into a non-binding agreement to create a Subcommittee on Alternatives to Housing (SAH) to study financial alternatives. A consultant, Bay Area Economics, was hired at up to $100,000 to study alternatives. The consultants' report on possible alternate funding sources is due by mid-February. Only two of the six SAH board members were present last night to face the public which prompted some to further question the City's commitment to this issue. (absent board members sent emissaries)

A second public meeting will be held on December 9, 2010, from 6pm - 8pm at Francis College, 180 Remsen Street at Founders Hall Auditorium, 1st floor. (Photo: Geoffrey Croft/NYC Park Advocates) Click on image to enlarge. – Geoffrey Croft

Brooklyn

Dozens of Brooklyn residents spoke out Tuesday night against plans to put residential buildings inside Brooklyn Bridge Park, according to N1 News.

Plans have been in the works for six buildings whose rent would help finance the park's maintenance and upkeep.

The park has to pay for itself, under the terms of a deal between the city and state.

During Tuesday night's public hearing in Cobble Hill, more than 100 people offered alternative funding sources.

They say building inside the park is a slippery slope.

"This is the first time in the city or the state, there will be private luxury housing inside the borders of a public park. Once you put private houses inside a public park, that land is gone forever," said Judi Francis of the Brooklyn Bridge Park Defense Fund.

Opponents say cutting bureaucracy would cut maintenance costs.

One more public hearing is scheduled for next week, and a consultants' report on possible alternate funding sources is due by mid-February.

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NY1 News - December 1, 2010

Yankee Stadium Parking Garage Developer In Desperate Attempt To Avoid Defaulting On Millions In Tax-Exempt Bonds

Parking Lot A- (Former 2.9 acre ball field in Macombs Dam Park) Another Bad Deal. 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. As predicted the Yankee organization's insistence of building more parking is turning into a nightmare for the city. 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 administration selected Bronx Parking in 2007 to build and run the garages after the Yankees demanded a minimum of 9,000 spaces to stay in the Bronx.

Adding insult to injury, Bronx Borough President Ruben Diaz Jr. is floating a plan to convert Parks Department managed parking lots into additional development instead of public parkland. (Photo: Geoffrey Croft/NYC Park Advocates) Click on image to enlarge.

Bronx

The owner of the financially troubled Yankee Stadium parking system plans to hike game-day rates by as much as 50% next year in a last-ditch effort to avert defaulting on millions in tax-exempt bonds, according to the New York Daily News.

Stadium self-parking prices will zoom from the current $23 to $35, while valet prices will go from $36 to $45. That's according to financial documents filed last month by garage owner Bronx Parking Development.

Even at those rates, the garages will still fall into a technical default unless two-thirds of bondholders agree to waive some requirements in the original construction bonds.

Bronx Parking barely managed to make a $6.8 million bond payment that was due Oct. 1 and will likely not have enough cash to make its next $6.8 million due in April. Without the waiver, the company warned, it will be forced to charge a minimum of $55 per car next year to avoid a default.

"The truth of the matter is, the whole thing's a mess," said one financial adviser to several bondholders. "If the city doesn't step in, there's no way Bronx Parking can pay back the money it took to build those garages."

For several weeks now, Bronx Borough President Ruben Diaz Jr. has been urging City Hall to restructure the entire garage project and possibly arrange a sale of some of the sites for other development projects near Yankee Stadium.

Yankees fans shun the official stadium parking, opting for the Gateway Center Mall. (above) According to Bronx Parking Development 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. (photo: Chu for NY Daily News)

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