October 12, 2007

Yanks $288m garage deal is approved

What do you get for a team that has everything? How about $288 million worth of parking garages? The New York City Industrial Development Agency approved the Yankees' three new garages, sporting 3600 spaces, on Tuesday, after a brief kerfuffle in which the Bronx borough president demanded more information about the plan. (Carrion's representative on the board, it turned out, didn't show up until after the vote - then retroactively voted yes.)

The state of New York had already committed a $70 million "capital subsidy" to the garages; the rest will now be funded by tax-exempt city bonds, and paid off by garage revenues. If the revenues fall short - which seems pretty likely - the city will have to pay the shortfall out of its $3.2 million in expected rent payments. As Juan Gonzalez of the New York Daily News explains:

The new garages, the ones with thousands of additional spaces, the ones that will be charging $25 per game for parking, will be required to pay $3.2 million annually in rent to the city.

But that's only after the bond service and expenses are paid.

"If in any year, the project cash flow is insufficient to pay full rent to the city," says the EDC memo, "such rents will be deferred with interest ..."

In other words, after the bondholders get theirs, after all the management fees for the garages and employee salaries and the maintenance and overhead is taken care of, then and only then will city taxpayers see a dime for all the land and financial support given to the new Yankee Stadium garages.

Here's betting we never see a nickel.

If not, since the garage rent payments have previously been counted as a credit against the city's costs on the Yankees project, that's about another $50 million in present value that the city will be out on the stadium deal. Add it to the Steinbrenners' tab.