Signs of spring: the first robin sighting, tulip buds shooting up from the frosty ground...and the annual increase in parking fees at our local baseball stadiums.
But up in The Bronx, fans may have reached the fleecing point. The owner of the Yankees parking garages could default on its bondholders in a few weeks. Turns out, Yankee fans figured out better alternatives to paying $35 and more for a parking spot. Field of Schemes has the details here
Last September, the New York Daily News' Juan Gonzalez warned that
the non-profit owner of the Yankees' new parking garages was nearing
default on its bonds. And now, it looks like that time is at hand: Crain's
New York reports that "all signs point to a default" when Bronx
Parking Development Co. is faced with a $6.8 million interest payment to
bondholders on April 1.
What would that mean? The way the bond deal was written, taxpayers
won't be on the hook for the bond payments, so they won't be stuck with
the entire $340 million garage construction cost, but rather face losing
million worth of future rent payments if Bronx Parking goes under.
That's not good, but it's far better than things would look for
bondholders, whose only recourse would be to seize possession of a bunch
of money-losing garages. River Avenue Blues notes that the garage
operators are responding to as many as 800 cars a game opting for the $5
parking at the nearby Gateway Mall by hiking
their own rates to $35 and up, which seems to betray a basic
misunderstanding of microeconomics.
Bronx Borough President Ruben Diaz Jr., meanwhile, wants to build a
hotel nearby to help goose the parking numbers, but lord knows how much
that would cost in city subsidies, or if it would even increase the
number of cars by all that much, especially when there's plenty of mass
transit available at the stadium.
What seems likely to happen at this point is that the bondholders
take a large bath, city taxpayers take a small one, and the garages sit
mostly empty until somebody realizes it's time to admit they're a sunk
cost and lower rates to match those down the block. Or maybe the city
could just buy the Gateway Mall and raise the parking rates there to
reduce competition -- it's already shown a willingness to throw
money at that project, so why stop now?