July 31, 2007

NYC on hook for Yankees garage losses?

New York City comptroller William Thompson's office tells Patrick Arden of Metro New York that if the three new parking garages being built for the Yankees fail to turn a profit, the city could be liable for any shortfall. Under a deal proposed (but not yet finalized) earlier this year, a non-profit corporation, the Community Initiatives Development Corp., will use $190 million in city tax-exempt bond financing to build the garages, repaying itself from garage revenues, and passing along part of any money left over to the city.

As Arden reported earlier this month, though, the city projects that the garages will only bring in revenue from Yankees game days - and at $25 a car for 81 home games, that would be barely enough to break even. (My own calculations here when the garage deal was first proposed resulted in a similar conclusion.) If Yankee fans start turning to mass transit, then - or attendance drops at any point - the CIDC could default on its bonds, which the city would then have to cover, sending the already skyrocketing public cost of the "no taxpayer subsidies" stadium toward three-quarters of a billion dollars.