For Bloomberg, No Lessons Learned From Yankee Parking Subsidies

If Mayor Bloomberg regrets his administration’s involvement in the Yankee Stadium parking disaster, he’s not letting on.

The Bronx Parking Development Company has finally defaulted on $237 million in triple-tax exempt bonds used to finance parking garages for the new stadium, and bondholders are looking for a way to recoup their losses.

It didn't work. Photo: ##http://articles.nydailynews.com/2012-02-03/news/31019192_1_bronx-parking-development-garage-revenues-yankee-stadium-parking-garages##Daily News##

“There just wasn’t the business there that the owners, who made the investment, thought that there was going to be,” Bloomberg told Transportation Nation yesterday. “If the owners of the parking garage can’t make money, that’s sad. We’ve got to find a way to help them.”

See what the mayor did there? In one shot he ducked responsibility for his role in the deal and characterized the developers as hapless victims. The developers who were handed tens of millions of dollars in taxpayer funds and acres of public park land to build thousands of parking spaces that the stadium’s neighbors didn’t want, and that everyone — other than the developers, the Yankees and the city — recognized were unnecessary.

The Daily News reported on Tuesday that the New York City Economic Development Corporation tried to broker a deal to “bail out” BPDC and redevelop two stadium parking lots with affordable housing and retail, but talks fell through for reasons the EDC would not divulge. The Industrial Development Agency, the financing arm of the EDC, facilitated the stadium garage deal and approved the bonds.

Half of the members of the IDA board were appointed by Bloomberg, either directly or through ex officio memberships, at the time the bonds were approved. The IDA signed off on the bonds before an economic feasibility study could be completed.

“The bonds are not a general obligation of the city or the IDA in any way, shape or form,” said EDC spokesperson Kyle Sklerov. This cynical and oft-repeated defense of the subsidy agreement masks the reality of the enormous contribution from taxpayers.

According to Good Jobs New York — one of the many voices of reason ignored by the EDC back in 2007 — the city gave up $2.5 million in taxes, while the state and federal government agreed to forego around $5 million and $51 million, respectively. The city paid $32 million to replace public park land that was seized by Albany legislators, and the Empire State Development Corporation chipped in $70 million. As of January 2009, GJNY pegged the public investment in the new Yankee Stadium and its garages at $1.3 billion. That’s a lot of help, by any measure.

“Not everything works,” Bloomberg said yesterday. More specifically, it doesn’t work when you spend public dollars to prop up private parking garages in an asthma-plagued neighborhood that is served by transit and doesn’t need more traffic.

  • JK

    So, what was the cost of the garage fiasco alone? $32m NYC and $70m EDC = $102m for the park land displacement. But if no interest is being paid to bondholders, the tax exemption on bond income going forward is zero. Is it fair to say the garage mess cost tax-payers $102m or can you itemize more direct costs? Be nice to know because you could compare this one totally avoidable debacle to the entire amount spent on bicycle infrastructure over the last decade.

  • Larry Littlefield

    “If the owners of the parking garage can’t make money, that’s sad. We’ve got to find a way to help them.”

    No we don’t. 

  • Daniel Eber

    “There just wasn’t the business there that the owners, who made the
    investment, thought that there was going to be, If the owners of the parking garage can’t make money, that’s sad. We’ve got to find a way to help them.” This just in, Mike Bloomberg believes that because a business can’t make money, the city government has to find a way to help. Does this apply to the Chinese Food restaurant near me that just closed? The owners made an investment, couldn’t make money, how sad.

  • vnm

    One would love to see transit-oriented, affordable apartment buildings and retail revitalize the spaces where parking lots now sit empty. It’s just basic smart growth. Affordable housing is rising all around the Bronx right now, so it should be able to work financially. If the bondholders benefit as a result, all the better. 

  • kevd

    Why again, is it sad that some people made a horrible business decision and are now losing money?

    Will Bloomberg help me out if I buy some stock and it tanks? Is that sad, too?

  • kevd

    Capitalism for the little people, Socialism if you’re close enough to Bloomberg and/or the Yankees.

  • Joe R.

    As with any other investment, there’s always a chance you may lose your money. It may be sad that those who bought bonds will lose their investment, but there’s zero reason why  government should “help” them. This was an ill-thought out private enterprise which failed. Hopefully this will be a model for what not to do in the future. Car-oriented development in NYC just isn’t good from either a business standpoint or any other standpoint.

  • J

    Sadly, this is not an isolated incident. The EDC’s Gateway Center at the Bronx Terminal Market also has a massive underused parking garage. So does the EDC’s East River Plaza. So the city screwed up and built WAY too much parking. You’d think they’d learn after the third time. Guess not.

  • Anonymous

    And there is much MORE to come: watch out on October 29 for City Planning proposal to remove all limitations on public parking in Manhattan below 60 th street and repeal key provisions that were imposed to comply with the clean air act.

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