I haven’t had much to say here about the New York Mets owners’ Bernie Madoff-related financial woes, but there is one potential way they could have a major impact on stadium issues: In the unlikely (but not that unlikely) case that the Mets owners declare bankruptcy, the payments on Citi Field stadium bonds would be thrown into disarray.
As I just wrote this morning for the Village Voice website:
To get people to nonetheless buy these bonds backed by nothing more than the promise of the Wilpons, the Mets took out bond insurance with a company called Ambac Assurance Corporation, which pledged to pay out if the Mets defaulted. Which would have worked great, except that Ambac — like so many of the financial insurers caught up in the economic meltdown — filed for Chapter 11 in November, and doesn’t actually have $500 million to pay out to anybody. And after Ambac, there’s nobody: Anyone who bought Mets stadium bonds thinking that their money was safe with the nation’s third most valuable baseball team would be left holding worthless paper.
At that point, the [city Industrial Development Agency] would be faced with a choice: Tap the city treasury to make good on the bonds, or risk future bond buyers growing wary of city-related bond offerings. Disclaimers about “faith and credit” be damned, it’d be a tough call for an agency already facing one high-profile stadium-related default.
Do I really expect this to happen? Probably not. But nobody expected the Texas Rangers to end up in bankruptcy court either. It’s a situation that bears watching, let’s just say that.