It’s been an awfully long time coming, but at last it looks we can say that the New York Yankees parking garages are in default on their bonds!New York Daily News columnist Juan Gonzalez reports that “Bronx Parking Development LLC failed to make a $6.9 million payment due April 1 on more than $237 million in tax-exempt bonds arranged by the Bloomberg administration back in 2007. The group, which is not connected to the Yankees, thus fell into one of the biggest defaults of a New York City-sponsored bond in decades.”
Unless you’re one of the poor schmoes who bought Yankees parking garage bonds thinking that the garages would actually pay their bills, the default probably won’t mean very much to you: Since a nonprofit corporation was set up to sell the bonds, neither the Yankees nor the city of New York is on the hook to bondholders. (The city can forget about ever getting the $43 million in rent payments it was supposed to accrue from the garages, but then, it’s probably already forgotten about that long before now.)
Of course, this isn’t a very good sign if, say, you live in a certain California state capitol that is considering a similar parking bond deal, only this time with taxpayer funds set to fill in any gap in parking revenues. Though officials there swear that they’re using conservative assumptions, and we all know that public servants would never fudge the numbers about something so important as — what’s that, Juan?
City economic development aides have privately acknowledged they were ordered by City Hall back then to “make the numbers work” in order to justify tax-exempt bonds.
Not a very good sign at all.