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(Adds parking-garage competition in third paragraph.)
Oct. 14 (Bloomberg) -- Two Yankee Stadium parking lots, whose poor performance threatens bonds backed by their revenue with default, are slated to become sites for affordable housing and retail, a person familiar with the plan said.
The Bronx Parking Development Co., which issued the bonds, approved terms to lease the sites to two development firms to build between 550 and 600 units of apartments, plus about 45,000 square feet (4,180 square meters) of neighborhood retail, said the person, who asked not to be identified because the plan isn’t complete.
Income from parking has been short of projections even though the New York Yankees were second behind the Philadelphia Phillies this year in Major League Baseball attendance, with 3.65 million fans, according to the ESPN website. The facilities face competition from public transportation such as the New York City subway and Metro-North Railroad, as well as other parking at a mall near the stadium.
“We are pleased to be assisting BPDC move forward with an alternative use to the underutilized parking lots,” said Kyle Sklerov, a spokesman for the city’s Economic Development Corp. “The redevelopment of these sites -- with affordable housing and neighborhood retail -- will bring much-needed benefits to the surrounding community.”
About $238 million of tax-exempt debt was sold in 2007 to build three garages, renovate two others and refurbish six parking lots near the 50,287-seat stadium, which opened in 2009. The garages generated 28 percent less revenue than assumed, according to a May 25 report to bondholders.
Hedge Fund Interest
Hedge funds specializing in distressed debt were buying municipal bonds backed by stadium parking facilities, including Monarch Alternative Capital LP and Davidson Kempner Capital Management LLC, two people familiar with the transactions said in June.
The housing plans were reported in New York Daily News columnist Juan Gonzalez’s column today.
Bronx Borough President Ruben Diaz has requested expressions of interest from developers to build a 200-room hotel on the site of one of the garages, said John DeSio, a Diaz spokesman. Responses are due Nov. 15, he said.
“Bondholders have shown interest in working with us on this,” DeSio said, referring to the hotel proposal.
A call to Steven Polivy, an attorney representing the parking company, weren’t immediately returned.
The two firms negotiating to build the apartments are Joy Construction and Jackson Development, the person familiar with the plan said.
--With assistance from Jonathan Keehner in New York. Editors: Mark Schoifet, Kara Wetzel
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