Thursday, January 03, 2008

"Builders for lots, garages at new Yankee Stadium defaulted on prior bonds" Daily News 1/2/8

Builders for lots, garages at new Yankee Stadium defaulted on prior bonds
Wednesday, January 2nd 2008, 4:00 AM

The group that received $237 million in city-sponsored bonds to build garages and parking lots at the new Yankee Stadium is hardly an all-star of public financing.

Bronx Parking Development LLC lists as its "sole member" the nonprofit group Community Initiatives Development Corp., which defaulted on two previous tax-exempt bonds in the past 10 years, records show.

The first default - on $7.7million in tax-exempt bonds issued in 2002 by the Syracuse Industrial Development Agency to finance a senior citizens home - was revealed by the Daily News in October.

The second default was not widely known. It involved $5.6 million in bonds the Monroe County Industrial Development Agency issued in 1998 for CIDC to build and own a parking lot. "Such bond financing was structured similarly to the structure of the bond financing described herein," notes the bond document for the Yankees' garages.

CIDC, the document states, "subsequently defaulted on payments on the bonds and also on payment in lieu of tax payments in connection [with the garage]" and "voluntarily transferred" its interest in the Monroe garage to the bondholders on Jan. 1, 2007.

CIDC operates out of the upstate Hudson home of its president, William Loewenstein. The group reported deficits of $260,000 in 2005 and $517,000 in 2004 on revenues of about $2 million annually, tax filings show.

Loewenstein defended the city's choice of his group for the Yankees' project. "The city has retained professionals to run the project," he said.

Although his company is the sole private member of the Bronx Parking Development LLC, he noted, CIDC will have only two votes on the five-member management group. City Hall will control two votes, and the Bronx borough president will control the fifth.


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