The Yankees are playing hard with a Bronx parking lot operator who has failed to pay the millions owed to taxpayers – charging the company effectively hampers major football stadium and affordable housing projects.
The parks department is threatening to terminate its lease with Bronx Parking Development Company LLC over defaults of $ 237 million in bonds issued in 2007 by the city’s Industrial Development Agency, according to documents.
Meanwhile, Yankees officials say the company is delaying a move that could help it come out of the red: a deal that includes the shaving of a four-level parking lot on 153rd Street to make way for a stadium. 25,000-seat football for the NYCFC. The plan would also provide 2,000 affordable housing units nearby in the heart of the South Bronx.
Geoffrey Croft, president of NYC Park Advocates, said the current disputes stem from overly generous deals surrounding the construction of the new Yankee Stadium, which opened in 2009.
“It’s a shame, and it will only get worse, and it was known from day one,” he said.
Since its launch in early 2015, the NYCFC has played its home games at Yankee Stadium. The possibility of a football stadium next to the baseball stadium has been looming since 2013, fueled by funds from the owner of the Abu Dhabi Royal Family of the NYCFC.
Ownership of parent company City Football Group then diversified to include minority stakes from a Chinese consortium and a tech investment company, according to the company.
But obstacles stand in the way.
Long distance goals
One is the need to relocate an elevator parts factory, GAL Manufacturing, attached to the parking lot where the stadium would be located, just south of Macombs Dam Park.
Another, the Yankees accused in a letter to the bank that serves as a trustee for IDA bondholders, is that the parking company will not play ball.
In the July 20 letter to the president of the US Bank, Yankees attorney Michael Mellis complained about dilapidated conditions and security breaches at the 11 sprawling parking lots and parking lots, which contain nearly 9,300 places.
The parking company “has materially failed in all respects” in its obligations to maintain its grounds in a “safe, secure, clean and trustworthy manner,” Mellis wrote. Among the problems cited: poor lighting, broken elevators, dirty surfaces and rampant vermin.
The Yankees’ attorney wrote that the baseball club would not give the necessary consent to the football stadium deal until the parking company cleaned up its deed. Bronx Parking Development Company “also effectively brought the project to a standstill,” Mellis accused, without providing details.
In February, Brad Sims, president of the NYCFC, told fans that the football club is partnering with real estate developer MADDD Equities on the project that would bring 2,000 affordable housing units to the South Bronx. In October he said Network YES that the soccer club was optimistic about the team’s progress, noting that the most important part would be working with local leaders and the community.
“We believe that not only the stadium, but the overall project that we’re going to be working on is something that’s going to be transformational for the South Bronx,” Sims said.
During a visit last week to the 153rd Street parking lot, THE CITY spotted rows of black rental vehicles parked near an overflowing trash can. Concrete debris was strewn in a stairwell.
A red sign shows parking rates: $ 13.59 for up to three hours, $ 40.77 for events, and $ 390.60 for a month.
Neither the Yankees, the Bronx Parking, the NYCFC, nor the attorney for the US Bank responded to THE CITY’s inquiries. The US bank declined to comment.
Taxpayers owed millions
Parking problems, observers say, are the product of too many spaces reserved for a 50,000-seat baseball stadium accessible by metro and Metro-North.
The Yankees are not responsible for the parking structures, but the team reportedly demanded an additional 2,000 spaces as a condition of staying in the Bronx. Local watchdogs had warned that the spaces would not be filled.
Documents suggest the parking lots turned into a costly mess, a combination of a lack of customers and complicated bond deals that put the company $ 133 million in debt to taxpayers.
City Parks Commissioner Mitchell Silver sent a letter earlier this year to Bronx Parking manager Charles Lesnick, citing the company’s reasons for default to potentially terminate the lease. An agreement that left room for maneuver to repay bonds expired at the end of 2019, the letter noted.
Financial information released to bondholders last month shows $ 99 million in rent and payments in lieu of taxes owed to the city by the parking company over the life of the bonds, as well as $ 34 million. interest on debts unpaid to date.
Under the terms of the bond deal, any debt buybacks or restructuring will always put bondholders in the front line to be paid, the city’s Independent Budget Office noted when the bonds went into default for. the first time in 2013.
“The pandemic made the restructuring worse, but it was already a bad situation,” said Matt Fabian, bond analyst for Municipal Market Analytics, which monitors distressed bonds.
The operation resulted in a loss of $ 30 million in 2019 alone, according to new records, bringing in just $ 14 million in payments from Yankees fans and other customers, even as baseball, football, and the Bronx were thriving in the pre-pandemic era.
The losses put the struggling $ 162 million parking business into the red, financial disclosures show.
“At some point they’re probably going to have to refinance all the debt, restructure,” Fabian said. “Bondholders will end up suffering some sort of loss.”
The city’s Department of Parks and Recreation, which owns the parking lot, referred the CITY’s questions to the New York City Economic Development Corporation, which worked to bring the first Major League Soccer stadium to the town in part of the property.
The unpaid lease remains in effect, according to EDC.
According to EDC’s most recent update on enforcement actions against the companies it does business with, “the Company is in negotiations with representatives of the majority bondholders over the terms of an agreement. restructuring ”.
“We didn’t see anything”
In February, when The New York Times reported that a deal was maturing between EDC and the owners of the NYCFC football team, EDC signaled that it would be doing local outreach with residents of the Bronx and others before formalizing a stadium pact.
“An agreement has not been reached and further conversations are needed,” the statement said. “We hope for a future where these lands can better serve the community. The first step towards achieving this goal is to engage the community on their needs and vision for this area. “
City lobbying records show the owners were represented in discussions with EDC President and CEO James Patchett by Marty Edelman, a lawyer who sits on the NYCFC board of directors.
The project should be submitted to the community council, the president of the borough, the planning commission and the city council as part of the city’s land use review process. But since an EDC briefing in January, Bronx community leaders say they have been left in the dark.
“We didn’t see a stadium design,” Paul Philip, district manager for the Bronx Community Board 4, told THE TOWN. “We didn’t see anything.”
He added: “It has been almost a year now since we have had substantive conversations.”
The same goes for council member Diana Ayala (D-Bronx), whose district includes the site of the proposed football stadium.
“There is currently nothing to report regarding a stadium,” Ayala sent to THE TOWN. “I know there has been interest, but to date no proposal has been made, and I have not heard from anyone in connection with this proposal for some time.”
Outside the 153rd Street parking lot on Thursday, Hunts Point’s Rahman Rahim hosted a new stadium for NYCFC fans, many of whom come from countries where football is considered the top sport.
“If this is a stadium designed just for football, I see nothing wrong with it,” said Rahim, 52, from Ghana.