A Bronx boondoggle is officially broke, leaving community groups shouting “I told you so.”
Facing barren business, Bronx Parking Development Company, owning several garages and lots around Yankee Stadium, skipped its $6.9 million interest payment due April 1, Opening Day for the Bronx Bombers.
The default, part of $237 million in tax-exempt bond financing, is considered one of the biggest business flops in the city’s history.
Now, in an attempt to recoup its losses, the city New York City Economic Development Corporation okayed BDPC to issue a Request for Proposal for the 151st Street north and south lots off River Ave. next to the Bronx Terminal Market.
Geoffrey Croft, president of NYC Park Advocates, called the move “absurd.”
“They should be turning it into a park,” said Croft, outraged the community already lost three acres of parkland following the building of its 9,000 space network of garages and lots.
Money Troubles
The Municipal Securities Rulemaking Board’s website indicated BPDC is going through “financial difficulties,” making it impossible to render payment.
BPDC opened with plenty of community uproar in 2007 shortly after spending $237.6 million of tax-exempt bonds to build its garages and lots, scattered in and around Yankee Stadium. Some of the garages replaced several baseball fields.
The 151st Street surface lots, owned by the Parks Department, were handed over by the EDC to BPDC a year later.
The allocation was fronted by private developers working with the city’s Industrial Development Agency, a branch managed by the city Economic Development Corporation.
BPDC was required to pay back the private bondholders through revenue from the lots, believing the demand to be there. The Yankees, with no stake in BPDC, exclusively uses 600 spots.
Revenue losses
The firm hit a snag once Metro-North Railroad built the 153rd Street-Yankee Stadium station in 2009, drawing more out-of-towners who refused to pay the $43 per spot.
“They didn’t calculate 3,000 people would be coming to the Metro-North,” said Cary Goodman, executive director of the 161st Street BID.
Revenue soon dropped by half following the station’s opening. Cheaper parking at the nearby Gateway Mall also drained customers. Eventually reserved money from BPDC’s coffers dried up.
“It was doomed to fail,” said Bettina Damiani of Good Jobs NY, a Manhattan-based development thinktank. Damiani opposed building the lots. She said that while taxpayers are not on the hook when paying back this payment, but it “simply looks bad.”
“Why would you in invest parking garages in an area with abundant transportation?” asked Damiani.
Goodman was equally thrilled to see the city renege on keeping the lots opened. “They’re sort of admitting that there was some overbuilding.”
An EDC spokesman referred questions to the Office of Management and Budget, handling the RFP. Calls were not returned.
For now, BPDC has hired Steven Polivy, an attorney for Akerman Senterfitt LLP to serve as bankruptcy counsel. He did not return calls on whether his client plans to pay the money back. Another payment is due Oct. 1.
David Cruz can be reach via e-mail at DCruz@cnglocal.com or by phone at (718) 742-3383
