"Firm plans to yank up parking prices at New York Yankees Stadium in hope of closing gap" Daily News 10/29/10
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.
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."
The firm, which is independent of the Yankees, is a three-year-old subsidiary of a little-known Hudson County nonprofit, Community Initiatives Development Corp.
The city Economic Development Corp. selected Bronx Parking to build and run the parking system. In addition to getting the right to raise $237 million with tax-free bonds, the firm received $100 million from the city and state for the project. This generosity despite the fact that its parent firm had defaulted on two previous tax-exempt industrial development bonds in upstate New York.
Its chief executive, William Loewenstein, did not respond to a request for comment.
Somehow, Mayor Bloomberg's economic experts never envisioned when they arranged the new Yankee Stadium deal that so many fans would shun the new overpriced garages. More fans are taking the subway or Metro-North to the games or parking at the much cheaper Gateway Shopping Mall several blocks south of the stadium than anyone predicted.
The new rates will only accelerate that flight.
Remember, the Yankees reached the playoffs this year, yet only about 60% of the parking system was filled on an average day.
Things didn't even improve when the Boston Red Sox were in town. On Saturday, Aug. 7, for example, a capacity crowd was on hand to see the Sox, but only 5,600 paid for parking, according to a day-by-day revenue report the company filed.
Bronx Parking has already failed to pay more than $10 million in back rent and interest to the city for the garage system, which sits on city-owned land.
The bondholders have asked for more time to review the company's plans to avoid a total collapse.
But anyone who looks at the numbers will realize that this could be one of the most embarrassing defaults of a tax-exempt bond in decades for New York City.
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.
"We don't need a wasteland of empty garages in this borough," said one Bronx official.