The New York Yankees intend to refinance more than $1 billion in tax-exempt revenue bonds issued to build their stadium.
The New York City Industrial Development Agency has scheduled a public hearing for 10 a.m. Sept. 15 at New York City Economic Development Corp. headquarters, 110 William St. in lower Manhattan. The agency, which owns the stadium and leases it to the team, is an EDC unit.
Officials expect the refunding by holding company Yankee Stadium LLC to save roughly $10 million in interest costs.
It won't be the first New York sports venue refinanced on the wings of low interest rates. In early August, Mikhail Prokhorov, owner of the National Basketball Association's Brooklyn Nets and the Barclays Center in downtown Brooklyn, refinanced $482 million of arena debt, saving an estimated $90 million.
The latest iteration of Yankee Stadium, which holds about 53,000 fans, opened in 2009, across 161st Street from the site of its two South Bronx predecessors. The Industrial Development Agency issued payment-in-lieu-of-taxes, or PILOT bonds, totaling $943 million in 2006 and $259 million in 2009. PILOT payments by the baseball club to the IDA backstop the debt.
Major League Soccer's New York City Football Club also uses the stadium.
Proceeds will also fund a portion of stadium costs and a debt service reserve account, according to the public hearing notice.
In July, Moody's Investors Service upgraded the bonds of both Yankee Stadium and the Mets' Citi Field in Queens, to Baa2 and Baa3, respectively.
"Yankee Stadium's required advance payment of annual debt service costs to the trustee on Feb. 1 each year provides a key structural protection that Queens Ballpark does not have," Moody's said of the rating difference. "Also, Yankee Stadium's advance payment supports its gross revenue pledge, whereas Queens Ballpark pays debt service when due and has a net revenue pledge."
The municipal bond-funded parking garages adjacent to the stadium continue to bleed money. Bronx Parking Development Co., which operates five garages and five parking lots, posted a $31 million net loss in calendar 2015, according to a report by independent auditing firm Friedman LLP.
High parking rates and convenient mass transit options to the stadium have pushed garage usage downward.
Bondholders have extended a forbearance agreement with Bronx Parking through the end of the year. Nuveen Asset Management holds roughly $140 million of the debt.
Bronx Parking issued $237 million of bonds late in 2007, through the IDA.
The Yankees, with a 67-63 record as of Tuesday morning, are in fourth place in the American League East Division.
