Development deal to bail out Yankee Stadium parking lot fiasco stalls; city ends negotiations with firms
Plans to build affordable housing and stores on failed Yankee Stadium parking lots in the Bronx have struck out - for now.
Talks between the city and a real estate developer have stalled and officials are no longer pursuing the partnership, the Daily News has learned.
Officials hoped a project with Jackson Development and Joy Construction would bail out Bronx Parking Development, the nearly bankrupt company that owns and operates the Yankee Stadium parking system.
Last year, the company’s board approved the general parameters of the development scheme and authorized the New York City Economic Development Corporation to negotiate a deal, officials said.
But the EDC recently ended negotiations with the two companies for reasons it won’t comment on, said Kyle Sklerov, agency spokesman.
New development options will be considered moving forward, Sklerov said. The parking system is a ticking time bomb because Bronx Parking has defaulted on about $240 million in tax-exempt bonds held by private investors that were issued by the city.
The company has until next spring to supply the bondholders with $15 million in principal and interest payments. But its reserves total less than half that figure because its garages and lots now average just 43% occupancy on Yankees game days.
The development deal meant to rescue the bondholders called for 550 units of low-income housing and 45,000-square-feet of retail on two lots south of Yankee Stadium near the Gateway Center shopping mall.
Now that project is headed for the dugout and the city needs a new partner or partners to step up to the plate.
Borough President Ruben Diaz Jr. has called for some of the garages to be torn down and replaced with a new 200-room hotel that would serve Yankees tourists and create jobs for local Bronx residents.
The Bronx Overall Economic Development Corporation has received interest from several developers but can’t move forward with discussions until the financial waters clear, sources said.
That could occur in the next few months if Bronx Parking either declares bankruptcy or the bondholders agree to take a loss.
Taxpayers aren’t on the hook for the Bronx Parking debt because the city acted as the conduit for the tax-free bonds, not the seller.
"The bonds are not a general obligation of the city or the IDA in any way, shape or form," Sklerov said.
But the fiasco is one of the largest defaults ever of tax exempt bonds issued by the New York City Industrial Development Agency, and it came about because the city and the Yankees overestimated the need for parking at the new Yankee Stadium.
Roughly 5% of the city’s conduit bond deals are in default.