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Bronx Plans to Demolish Garage That Backs Troubled Revenue Debt

SEP 23, 2011 7:44pm ET
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An ambitious proposal for a hotel and conference center adjacent to the new Yankee Stadium would require demolition of an underused parking garage that helps back a troubled parking revenue bond deal.

A full-service hotel is a long-held dream of borough-boosters. In the proposal, it would replace a four-level parking garage — documents call it “Garage 8” — on city-owned land at East 153rd St. and River Avenue, a few blocks south of the stadium.

Revenue at that garage and other facilities run by borrower Bronx Parking Development Corp. has underperformed, leading to debt-service reserve fund withdrawals and concerns about an ultimate payment default.

“This proposal may help stabilize the financial situation we face so that we can ultimately meet our obligations to the bondholders and lower parking fees for those who park in the garages,” Bronx Parking vice president Chuck Lesnick said in a statement. 

He did not return calls seeking comment.

Bronx officials say the time has come for New York City’s oft-maligned borough.

“All the moons are aligned,” according to Marlene Cintron, president of the Bronx Overall Economic Development Corp., which is running point for the hotel project.

Bronx Parking has authorized the BOEDC to seek interest in the site. Under an existing parking facilities contract, the city must replace any eliminated parking spaces.

Cintron’s organization last week issued a request for expressions of interest for the proposed complex. Deadline for submittals is Nov. 15.

Proposals must include a hotel conference center certified under the Leadership in Energy and Environmental Design green building system; at least one restaurant, preferably top floor; a condominium level to accommodate visiting teams, international tourists, and New York Yankees executives; and retail space “appropriate for the development.”

The corporation also recommended provisions for a Latino Baseball Hall of Fame Museum.

Cintron said negotiations with Bronx Parking and bondholders would need to be worked out.

“I’m not sure they’re going to default on the bonds. I always see the cup as half-full rather than half-empty,” she said. “We would discuss on a case-by-case scenario, depending upon the developer or chain that’s selected. We left things extremely open-ended.”

Bronx Parking has said that only about half the 9,000 spaces around the stadium are occupied on game days. The opening of a long-sought Metro-North commuter train station and the addition of water taxi service have served as effective alternatives to the $35 cost of self parking at the garage, as have competing parking lots in the area.

The Hudson, N.Y., nonprofit Community Initiatives Development Corp. formed the parking company, for which the New York City Industrial Development Agency issued $237.6 million of unrated and uninsured debt in 2007.

Bond proceeds, along with $70 million in state subsidies, were used to develop and construct three garages and renovate other parking facilities around the new stadium, which opened in 2009 just north of the old one.

Proceeds helped renovate Garage 8, according to bond documents. With 2,411 spaces, it is the largest of the five Yankee Stadium Parking System garages. Built next to the old Yankee Stadium, it is also the farthest away of the garages from the new stadium.

Borough President Ruben Diaz Jr. mentioned the need for a full-service hotel, which the borough now lacks, in his state of the borough address in January. “We are getting closer and closer to seeing that dream become a reality,” Diaz said last week.

Skeptics, though, question the sustainability of such a project some distance away from Manhattan.

“What the proposal tells me is that someone’s got a parking garage that isn’t making money, they’re desperately looking to bail it out, and they’re looking for an economic development angle that will make the thing look like a grand success,” said Heywood Sanders, a public administration professor at the University of Texas at San Antonio.

“There is no market analysis here,” Sanders, an author and frequent critic of publicly financed convention centers, said in a phone interview. “It’s like they’re saying, 'Please, developers, tell us if you might be interested.’ ”

Proposals have come and gone before. Diaz’s predecessors, including Robert Abrams, Herman Badillo, Stanley Simon, Fernando Ferrer, and Adolfo Carrion, had long sought major development around the stadium site but came up empty.

Promises for such growth resonated during the 1970s when the Yankees rebuilt the original stadium, which opened in 1923. But when the ball club reopened it in 1976, after playing for two years at the Mets’ home, Shea Stadium in the Flushing section of Queens, the surrounding area remained desolate.

“Look at the proposal. They want it to be LEED-certified, with a concierge level and a restaurant on top, and they request a Latino Baseball Hall of Fame and Museum, all of which is symptomatic of a larger political imperative that has nothing to do with a hotel,” Sanders said.

“A concierge level for visiting teams? In the entire history of Yankee Stadium — all three versions — somehow the visiting teams have never generated enough traffic to warrant a hotel there.”

Sanders is writing a book on what he considers the flaws of convention-center politics, expanding on a white paper, “Space Available,” he wrote for the Brookings Institution in 2005. Convention-center glut, he said, “is decidedly, demonstrably worse” than it was almost seven years ago.

The South Bronx has experienced a flurry of retail and commercial activity the past few years, including the Gateway Center, a shopping center redevelopment of the old Bronx Terminal Market. Its cheaper parking has drawn baseball fans away from Yankee Stadium Parking System garages.

Rezoning has occurred around 161st Street and Jerome Avenue, and eastward to Third Avenue. Further rezoning would be necessary to accommodate hotel construction.

Also, the 11-acre Heritage Park is scheduled to open next month at the site of the original Yankee Stadium.

Located just north of the would-be hotel complex, it will feature a full-size baseball diamond, softball field and Little League field, and will help compensate for neighborhood parkland lost to the new stadium.

Robert Boland, a sports business professor at New York University’s Tisch Center for Hospitality, Tourism, and Sports Management, said a stadium-focused development project this time might work in the Bronx.

He cited the popularity in general of mixed-use development around sports stadiums and a better image for a borough that has come a long way from the rough-and-tumble stereotype portrayed in the 1981 movie, “Fort Apache, The Bronx.”

“It almost seems to fit the trend in sports, of matching stadiums and arenas with transportation and with infrastructure hubs. Today, any kind of mixed use is a natural fit,” said Boland, a lawyer who has negotiated more than 100 player and endorsement contracts in a variety of sports, including the National Football League.

“Now there is activity around the Bronx, including a big-box mall and stores around it,” he said.

“Mixed use creates synergies. You now have an improved climate on the Grand Concourse, and you have water taxi and a new Metro-North station near the stadium.

“I do think it’s a significant opportunity for the Bronx to show that it’s come back in many ways,” Boland added. “The borough, remember, was founded on a grand European vision – hence, the Grand Concourse.”

Cintron, declining specifics, said more than a dozen developers have expressed interest, including one “extremely interested” major hotel chain.

“People need to come to the Bronx and see for themselves,” she said.

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