"Gimme shelter" Metro NY 7/30/7
City looks for cover on Yankee garages
by patrick arden / metro new york
JUL 30, 2007
BRONX. The city’s pick to build parking garages at the new Yankee Stadium has already defaulted on one
taxpayer-financed project. And if it defaults this time, the city could be on the hook.
Despite the state’s kicking in more than $70 million, the city spent two years looking for a developer willing to take on the garages’ financial risk.
In March, they settled on Community Initiatives Development Corp., a not-for-profit that would qualify for $190 million in tax-exempt financing through the city’s Industrial Development Agency. Tax-exempt bonds would allow CIDC to pay back debt at the bargain rate of 5 percent, lowering construction costs.
But CIDC couldn’t cover a loan backed by $7 million in tax-exempt bonds issued by the Syracuse IDA in 1999 to build senior housing. In 2002, the project “was taken over by a nursing home operator who’s made it a success,” said David Michael, Syracuse’s director of economic development, who added CIDC was “just a financing conduit for the real owner.” Michael said the city would “probably not” loan money to CIDC again.
In April, CIDC exec Joseph Seymour, former director of the Port Authority, told Metro his firm is only a “pass-through to give the garages tax-exempt financing.” The money would go to a new subsidiary, Bronx Parking Development Corp., whose board would include representatives from city agencies.
With 81 games a season, profits would be slim, as Metro reported this month. In case of default, the city could be liable for the debt, said a spokesperson for Comptroller William Thompson, who has a rep on the IDA but couldn’t comment on the deal’s specifics.
At a Community Board 4 meeting last month, attorney Steven Polivy took credit for putting together the “private-public partnership.” Polivy works for Stadtmauer Bailkin LLP, which specializes in securing government subsidies for corporate clients. CIDC’s president, William Lowenstein, has had a long relationship with the firm.
That’s one of many backroom connections listed in a new report by watchdog group Good Jobs New York.
“The garages aren’t benefiting anyone but the Yankees,” said Good Jobs analyst Dan Steinberg. “These are costly municipal garages that will further pollute the South Bronx.”