Curveball thrown at public with Yankee Stadium garages

nydailynews.com

Curveball thrown at public with Yankee Stadium garages

Wednesday, October 10th 2007, 4:00 AM


Taxpayers got a double whammy yesterday when a city agency approved
$225 million in tax exempt bonds for a nonprofit group to build
parking garages for the new Yankee Stadium.

First, the city's Industrial Development Agency, which approved the
project, quietly inserted new provisions that guarantee millions more
in taxpayer subsidies if the garages don't make a profit, documents
show.

Second, the little-known nonprofit group picked to build the garages
failed to list on its city application a previous foreclosure on
another upstate project financed with tax-exempt bonds.

In 2002, the city of Syracuse foreclosed on $7 million in bonds issued
to the Community Initiatives Development Corporation, the Hudson, N.Y.-
based group chosen to build the Yankee garages.

CIDC, a little-known organization used by some local governments
around the state as a vehicle for tax-exempt financing, built an
apartment complex for senior citizens with the money. When the
Syracuse complex failed to produce enough revenue, that city
foreclosed on the bonds.

In March of this year, in a disclosure form to New York City's
Economic Development Corp., CIDC chief William Loewenstein checked
"no" to the question: "Has real property in which Applicant, or
Affiliate or Principal, holds or has ever held an ownership
interest ... now or ever been the subject of foreclosure."

Loewenstein did not respond yesterday to a call for comment.

"We are aware of the CIDC transaction in Syracuse," a spokeswoman for
EDC said. The spokeswoman said the firm's "credit-worthiness" has
nothing to do with the bond issue.

"The bonds [for the parking garages] will be supported entirely by the
operating revenues from this project," she said.

Well, if the financial magicians at EDC are so sure the garage project
is a guaranteed money-maker - even though it has ballooned in price to
nearly $300 million - why did they insert a provision in the plan at
the last minute sticking taxpayers with any losses?

Don't take my word for it.

Here's what an internal memo from EDC staff says about any payments-in-
lieu of taxes (PILOTS) the garage owner would normally be required to
pay:

"If in any year the project cash flow is insufficient to make a full
payment of PILOT, payments will be deferred with interest ...."

Same goes for the rent the parking garages are supposed to pay. Right
now, the city gets $3 million a year as its share of the Yankees
parking revenue.

The new garages, the ones with thousands of additional spaces, the
ones that will be charging $25 per game for parking, will be required
to pay $3.2 million annually in rent to the city.

But that's only after the bond service and expenses are paid.

"If in any year, the project cash flow is insufficient to pay full
rent to the city," says the EDC memo, "such rents will be deferred
with interest ...."

In other words, after the bondholders get theirs, after all the
management fees for the garages and employee salaries and the
maintenance and overhead is taken care of, then and only then will
city taxpayers see a dime for all the land and financial support given
to the new Yankee Stadium garages.

Here's betting we never see a nickel.

"This is another huge giveaway," a stunned senior city official said
when told the details of the garage financing.

Nothing of the sort, claims Mayor Bloomberg's EDC.

"To the extent that the cash flow is not sufficient to pay those
amounts in full, the unpaid portions will accrue with interest to be
paid later," the agency spokeswoman said.

Try that one on your credit card company.

On Oct 10, 3:14 pm, Zoolander <j....RemoveThis@yahoo.com> wrote:
> nydailynews.com
>
> Curveball thrown at public with Yankee Stadium garages
>
> Wednesday, October 10th 2007, 4:00 AM
>
> Taxpayers got a double whammy yesterday when a city agency approved
> $225 million in tax exempt bonds for a nonprofit group to build
> parking garages for the new Yankee Stadium.
>
> First, the city's Industrial Development Agency, which approved the
> project, quietly inserted new provisions that guarantee millions more
> in taxpayer subsidies if the garages don't make a profit, documents
> show.
>
> Second, the little-known nonprofit group picked to build the garages
> failed to list on its city application a previous foreclosure on
> another upstate project financed with tax-exempt bonds.
>
> In 2002, the city of Syracuse foreclosed on $7 million in bonds issued
> to the Community Initiatives Development Corporation, the Hudson, N.Y.-
> based group chosen to build the Yankee garages.
>
> CIDC, a little-known organization used by some local governments
> around the state as a vehicle for tax-exempt financing, built an
> apartment complex for senior citizens with the money. When the
> Syracuse complex failed to produce enough revenue, that city
> foreclosed on the bonds.
>
> In March of this year, in a disclosure form to New York City's
> Economic Development Corp., CIDC chief William Loewenstein checked
> "no" to the question: "Has real property in which Applicant, or
> Affiliate or Principal, holds or has ever held an ownership
> interest ... now or ever been the subject of foreclosure."
>
> Loewenstein did not respond yesterday to a call for comment.
>
> "We are aware of the CIDC transaction in Syracuse," a spokeswoman for
> EDC said. The spokeswoman said the firm's "credit-worthiness" has
> nothing to do with the bond issue.
>
> "The bonds [for the parking garages] will be supported entirely by the
> operating revenues from this project," she said.
>
> Well, if the financial magicians at EDC are so sure the garage project
> is a guaranteed money-maker - even though it has ballooned in price to
> nearly $300 million - why did they insert a provision in the plan at
> the last minute sticking taxpayers with any losses?
>
> Don't take my word for it.
>
> Here's what an internal memo from EDC staff says about any payments-in-
> lieu of taxes (PILOTS) the garage owner would normally be required to
> pay:
>
> "If in any year the project cash flow is insufficient to make a full
> payment of PILOT, payments will be deferred with interest ...."
>
> Same goes for the rent the parking garages are supposed to pay. Right
> now, the city gets $3 million a year as its share of the Yankees
> parking revenue.
>
> The new garages, the ones with thousands of additional spaces, the
> ones that will be charging $25 per game for parking, will be required
> to pay $3.2 million annually in rent to the city.
>
> But that's only after the bond service and expenses are paid.
>
> "If in any year, the project cash flow is insufficient to pay full
> rent to the city," says the EDC memo, "such rents will be deferred
> with interest ...."
>
> In other words, after the bondholders get theirs, after all the
> management fees for the garages and employee salaries and the
> maintenance and overhead is taken care of, then and only then will
> city taxpayers see a dime for all the land and financial support given
> to the new Yankee Stadium garages.
>
> Here's betting we never see a nickel.
>
> "This is another huge giveaway," a stunned senior city official said
> when told the details of the garage financing.
>
> Nothing of the sort, claims Mayor Bloomberg's EDC.
>
> "To the extent that the cash flow is not sufficient to pay those
> amounts in full, the unpaid portions will accrue with interest to be
> paid later," the agency spokeswoman said.
>
> Try that one on your credit card company.

CIDC IS THE WORST. DON'T USE THEM.