"Fiscally feasible? City pitches in for new stadium parking" Metro NY 10/10/7
City pitches in for new stadium parking
by patrick arden / metro new york
OCT 10, 2007
MANHATTAN. The city finally vowed to study the economic feasibility of building massive parking garages at the new Yankee Stadium yesterday — but only after it had given $218 million in tax-exempt bonds to the developer.
For two years, doubts have swirled around the controversial plan to invest hundreds of millions in garages that would be of use for just 81 games a year. Yesterday a spokesman for the city’s Industrial Development Agency acknowledged the “difficult economics” and the fact that, after a nearly two-year search, only one developer was found willing to take on the risk.
This developer turned out to be a politically connected not-for-profit that already defaulted on a taxpayer-financed project upstate. In the case of another default, the city could be liable for the debt, a spokesperson for Comptroller William Thompson told Metro in July.
When Community Initiatives Development Corp. was named by the IDA last April, its senior v.p. Joseph Seymour — a former executive director of the Port Authority — described the not-for-profit as a “pass-through to give the parking garages tax-exempt financing.” The money would go to a new subsidiary, Bronx Parking Development Co., which would be run by a board with representatives from three city agencies.
Tax-exempt financing lowers building costs, but questions remained about the financial viability of the garages. In September, IDA executive director Maureen Babis said the bond buyers had been located, though they were expecting a higher rate of return.
Yesterday they wanted assurances too. IDA spokesperson Janel Patterson said investors had requested that an outside consultant perform the study to validate the city’s financial projections. “The bonds should close this month,” she said.
In addition, BPDC will get $70 million from the state. One garage was eliminated from the plan to lower the cost, but after the 2008 season that lot can be developed by BPDC for retail or mixed use. Revenue from that “will flow into the garage project,” explained Patterson. Though the land is owned by the Parks Dept., she said, it “is not parkland, so [state] alienation is not needed.”
The new stadium required the alienation of 22 acres of parkland. BPDC will receive $32 million from the city to put a 7.3-acre portion of replacement parkland on top of one garage.
The city estimates the project will create 500 construction jobs, but just 12 full-time positions (and 70 part-time jobs) earning $11 an hour.
“It’s sad they gave their stamp of approval to a project that will create so little opportunity for the working poor,” said Bettina Damiani of watchdog group Good Jobs New York. “Can you imagine the people sitting around that table getting by on $11 an hour?”