Holders of $238 million of defaulted bonds issued to build garages near Yankee Stadium have agreed to continue negotiations in the hope construction of a soccer stadium at the site can bail them out, according to bond documents.
The stipulation is that the New York City Football Club reach an agreement by Jan. 3 to buy some of the garages, according to a Dec. 18 filing posted on the Municipal Securities Rulemaking Board's Emma website.
New York City FC in May announced plans to join Major League Soccer, the sport's dominant league in the United States, as an expansion team beginning in 2015. The club is a joint venture with Manchester City of England's Premier League and the New York Yankees as part owners.
Manchester City ownership is fronted by Mansour bin Zayed bin Sultan Al Nahyan, a wealthy member of family that rules Abu Dhabi in the United Arab Emirates.
Bondholders, the Yankees and New York City FC would all have to sign off on the agreement.
Bronx Parking Development LLC, through the New York City Economic Development Corp., issued nearly $238 million of tax-exempt civic facility revenue bonds in 2007 to fund the garages, built as part of a city deal with baseball's Yankees to construct a new stadium adjacent to the old one. The Yankees demanded parking capacity for 9,000 cars to accommodate the stadium, which opened in 2009.
Baseball fans, however, have shunned the garages, given prices as high as $48 for valet service and such alternatives nearby as a new Metro-North Rail Road station and free parking at the Gateway Mall several blocks away.
Bronx Parking in April defaulted on a $6.9 million bond interest payment, three weeks after revealing in a disclosure filing that it hired bankruptcy counsel. Additionally, the bonds' tax-exempt status is in jeopardy after the Internal Revenue Service said it is examining the bonds to "determine compliance with the federal tax requirements.
Feelers for a hotel complex at the site of one of the garages have produced nothing, but last summer, Bronx Parking issued requests for proposals to sublease and develop two lots near the stadium. Bronx borough president Ruben Diaz Jr., who recently trumpeted plans to convert the abandoned Kingsbridge Armory into a nine skating-rink complex, favors the soccer stadium.
The soccer club had also weighed Flushing Meadows in Queens, but neighborhood opposition in that borough has been strong.