Thursday, February 09, 2006

"City on the hook to cover Yankees’ parking lot tab" in Metro NY on 2/09/06

City on the hook to cover Yankees’ parking lot tab

State says costs will be shouldered by taxpayers if developer balks at building garages

by patrick arden / metro new york

FEB 9, 2006

BRONX — The city could end up covering the bill for the four parking garages required under the proposed Yankee Stadium plan, according to a document drawn up by the Empire State Development Corporation, the state’s economic investment agency.

The garages were supposed be built with $70 million from the state. The team’s president, Randy Levine, even asserted on Tuesday that this investment will pay for itself.

“All of the parking proceeds will go directly back to the state,” he said.

Yet, a private developer, not the state, stands to collect this parking revenue. That’s because the actual cost of the garages is $235 million, not $70 million, according to the project’s Draft Environmental Impact Statement.

The Empire State Development Corporation maps the terms of the garage deal in its General Project Plan: “The balance of cost of constructing the New Parking Garages will be borne by the garage operator and/or the City.”

The city’s Economic Development Corporation is looking for investors to pony up that extra $165 million. It has already issued a Request for Qualifications to gauge the number and quality of bidders. “We got a number of competitive responses,” said Janel Patterson, a spokesperson for the EDC. “We’ll narrow these down, and we hope to issue a Request for Proposals in about a month.”

According to requirements laid out in the Request for Qualifications, the garage’s operator will have to pay a lease of $3.2 million to the city and should not charge more than $25 per car. With 4,700 parking spaces and 81 games a season, a full garage will generate only $9.5 million from the games. That’s $6.3 million a year after paying off the lease.

“It doesn’t seem feasible for a private developer,” said Dan Steinberg, a research analyst with Good Jobs New York, a government watchdog group that released its own report on the Yankee Stadium project this week. “If there’s not enough interest from a private developer, we’re concerned that the city might get stuck with the tab.”

So what does the state stand to collect from its $70 million investment?

“The only revenue would be the tax revenue,” Patterson said. The Draft Environmental Impact Statement puts revenue to the state at $11.2 million for “one-time construction benefits” and $250,000 for 2009.

“That’s all they give,” said Steinberg. “If taxes generate $250,000 a year, the state will collect in today’s dollars another $5.1 million over 30 years. Not the best return on its investment.”


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