Investors in bonds that financed parking facilities serving Yankee Stadium are currently reviewing the budget of the fiscally troubled nonprofit that runs the lots, after being asked to waive debt-service coverage covenants.
Revenue at the system of parking garages and lots run by borrower Bronx Parking Development Co. have underperformed. The bonds face possible technical default next year.
The New York City Industrial Development Agency issued the unrated and uninsured debt in 2007 on behalf of the company, which was formed by the Hudson, N.Y., nonprofit Community Initiatives Development Corp. Bond proceeds, along with $70 million of state subsidies, were used to develop and construct three garages and renovate other parking facilities around the new stadium.
Bond trustee Bank of New York Mellon asked bondholders to vote by Sept. 28 on whether they would consent to the corporation adopting a 2011 budget that did not comply with the bonds’ 1.15 times required debt-service coverage, according to disclosure documents posted in September. The proposed budget would generate one times debt-service coverage. The current projected coverage for 2010 is 0.79 times. The parking system projects a net operating deficit of $1.39 million this year.
The outcome of the bondholder voting is not known. BNY-Mellon spokesman Kevin Heine declined to comment.
The disclosure was first reported Friday in the New York Daily News.
The parking company is governed by a five-person board that includes representatives from the New York City Economic Development Corp., the city Parks Department, the Bronx Overall Economic Development Corp., and two members of Community Initiatives Development.
“The budget was proposed and then sent to bondholders for a waiver,” EDC spokesman Kyle Sklerov said in an e-mail. “It hasn’t been adopted yet.”
The budget included two proposed rate hikes that would raise the regular $23 rate to between $40 and $47. Valet parking would also increase to between $52 and $55 from $35 and the bus rate would increase to $100 from $80.
CID president William Lowenstein referred most questions to the company’s lawyer, Steven Polivy of Akerman Senterfitt LLP, who said only that the firm is in talks with bondholders.
Lowenstein did say
The consultant said that a drop-off in demand due to higher prices would likely be short term. It also suggested that the city could investigate whether competing parking lots were properly licensed.
