Friday, February 03, 2012

Yankee Stadium Parking Deal A Disaster For New York City

In their efforts to build a new stadium, the New York Yankees convinced the Bloomberg Administration that more parking was needed for the stadium. So, the Bloomberg Administration lined up financing for building parking garages and lots around the new stadium.

Well, it turns out that fans have avoided the parking like the plague and it's such a disaster that the parking lot bonding may default costing the City $237 million in the process.
Time is running out, in other words, to avoid one of the biggest failures in decades of bonds issued by a New York City agency.

The simple fact is that Bloomberg and his aides made a costly mistake when they succumbed back in 2005 to the Yankees’ demand for a 9,000-space garage system. It was all part of the deal for the team to build a new stadium in the Bronx.

But Yankees fans have shunned the garages, where gameday self-parking rates soared last year to $35 — up from $23 previously and more than double the original $14 charge. Valet parking now goes for $48.

So many fans are staying away, in part due to the lure of cheaper local competition, that Bronx Parking Development now projects only 3,500 paying customers per game for the upcoming season.

And that occupancy rate — a measly 38% — will exist only on days when the Bronx Bombers take the field. For the rest of the year, the garages will remain a ghost town, since a mere 70 South Bronx residents currently park there each day.

At the same time, Bronx Parking Development has turned into a giant tax deadbeat. The firm, which is not connected to the Yankees, has failed to pay any rent or property taxes, even though the garages sit on 21 acres of leased public land.

It currently owes the city a whopping $25 million.
The City's solution to this mess? Another bond proposal to build a hotel complex around the stadium.

I'm sorry, but the better solution is to restore parkland that was destroyed as part of relocating Yankee Stadium across the street, and to open up bidding for prime locations for affordable housing and combined retail/residential development. This is a prime location in the City, and the proximity to both a Metro North train station that leads directly into Grand Central Terminal and subways means that it's an easy commute to the heart of the city. Parking should have taken a back seat considering that fans are doing whatever they can to avoid paying through the nose for parking - even circling streets nearby to find on-street parking or lower cost lot alternatives.

The City and the agency that issued the bonds (the IDA) claims that the city and IDA aren't going to be on the hook for the costs. Instead, they claim that the bondholders will be stuck with any potential default. I don't find that completely reassuring, and it also means that the IDA will have a harder time issuing bonds in the future on more worthwhile projects, and bondholders might be more leery of IDA bond issuances.

Thus far, developers have not put forth proposals for hotels or housing on the affected lots, unless they receive sufficient incentives (read as tax credits). Due to the way that the City has mismanaged this resource, the City will have a hard time getting top dollar for the properties.

No comments: