Stuck in Park
Stuck in Park
As NYCFC’s potential stadium project in the South Bronx supposedly teeters at the edge of collapse, Chris Campbell talked to the parties involved and found out that the stadium is not quite dead.
As first reported by The Outfield, the community board vote that was supposed to kick off the development planning and public review process for New York City FC’s planned South Bronx stadium was postponed, filibustering the long idled project and souring local community support.
According to New York City Economic Development Corporation (NYCEDC) representatives at that meeting, the delay was due to the Yankees making last minute changes to the terms that laid out exactly how the soccer club’s development team would be acquiring necessary plots of land for stadium construction.
The Yankees did not provide any representatives at that meeting, but have since gone on a media offensive to dispute those claims. Yankees President Randy Levine told the Wall Street Journal that it was the city who was reneging on promises in the term sheet. NYCFC color commentator and Yankees Entertainment and Sports Network employee Ian Joy also pontificated to those tuning to Sunday’s match against Orlando City that it was the city who was the guilty party of the deal falling apart.
In response, NYCEDC President Rachel Loeb countered that it was the Yankees that were not committing to promises they had made. Recent reports, using mostly sourcing from the Yankees, contend that the development deal is dead and that NYCFC is pursuing stadium options in other boroughs.
In town hall meetings this past weekend, NYCFC Chief Operating Officer Matt Goodman told season ticketholders, “The Bronx has always been our first choice, but at this point, we have to look at every potential scenario that can facilitate our success.”
When asked if the club was willing to look in other boroughs for a stadium location, Goodman responded, “Yes. We now have to look at all options on the table. 100% yes.”
On the heels of these statements and claims, The Outfield decided to take a closer look at the details. After in-depth conversations with Yankee President Randy Levine and the NYCEDC, here’s what we found after reading the fine print:
1. Who are the parties involved? What is their role in the stadium project?
In order to obtain necessary plots of land for the planned stadium development NYCFC’s development partners, Maddd Equities and the New York Yankees, are looking to sever a lease between New York City Industrial Development Agency (NYCIDA) and Bronx Parking Development Corporation (BPDC) for underutilized parking garages that are part of the Yankee Stadium Parking System (YSPS). NYCIDA is administered by NYCEDC and changes to this lease would require NYCEDC to sign off.
When the parking garages were being considered to be built, NYCIDA issued over $237 million in municipal bonds to BPDC to finance construction. The majority of those bonds are now held by Nuveen Securities, the investment arm of financial services conglomerate TIAA. Any agreement on severing the lease will require Nuveen’s sign off as well.
The Yankees have third-party beneficiary rights under the current lease as the lots and garages in the YSPS are legally required to be made available to supply parking for Yankee Stadium events per the Parking Facilities Agreement (PFA) signed in 2006 during the construction of the new Yankee Stadium. Since building a stadium on the underutilized YSPS lots and garages would decrease the available parking facilities under the PFA, the Yankees would also have to sign off.
2. Is the stadium deal dead?
No, it does not appear so.
The Yankees, NYCEDC, and Nuveen all signed a non-binding term sheet in December 2020, agreeing to key terms and conditions to be incorporated into new leases that would split the parking lots and garages into those that would be used to build an eventual stadium and those that would remain to provide the required parking for events at Yankee Stadium.
Talks are stalled right now amid disagreements on the exact interpretation of certain clauses in the term sheet. However, all three parties have said that they are willing to get the stadium project back on track. Even more confusedly, they have all said that they are committed to the terms as laid out in the December term sheet.
NYCEDC said in a statement provided to The Outfield, “We have been and remain committed to all parties to reach a resolution that benefits the community and the city.” A NYCEDC spokesperson separately confirmed to The Outfield that NYCEDC was willing to move forward with the terms in the December term sheet.
A Nuveen spokesperson told The Outfield, “Nuveen remains committed to the transaction set forth in the term sheet and looks forward to a continued strong relationship with the Yankees and the City.”
In a conversation with The Outfield, a senior Yankees official mentioned that they would be open to a deal based on the terms from the December term sheet, as long as they receive their guaranteed number of parking spots.
3. Who prevented this deal from continuing forward?
NYCEDC delayed the vote telling Bronx Community Board 4, “We don’t want to bring a proposal to you for a vote when we haven’t resolved these open issues with the parties”. However, that was done on the basis of the Yankees seeking to change terms prior to that community board vote to include a guaranteed number of parking spots.
4. Everyone said they were good with the term sheet, so what happened?
The Yankees claim that the term sheet provides for a guarantee of 5,611 parking spots to be provided for Yankee Stadium events. This guarantee appears to be accurate based on the December term sheet:
Levine told The Outfield, “We were totally prepared, ready to go on June 22nd [Community Board 4 meeting], based on that term sheet with the guarantee of [5,611 parking spots]”. Levine asserted that NYCEDC- not the Yankees- were reneging on the term sheets.
The Outfield spoke with representatives from NYCEDC, who countered that the 5,611 number was inaccurate, never agreed upon as being guaranteed, and the Yankees agreed to not contest the asserted capacity of the lots.
NYCEDC claims that the PFA only guarantees 600 parking spots for Yankee Stadium events. The rest of garages and lots that make up the YSPS must provide parking for Yankee Stadium events, but not at a guaranteed number of spots. NYCEDC contends that providing a guarantee of a specific number of parking spots in these lots would represent a new right not already in the lease.
During the conversation with The Outfield, NYCEDC representatives also stated that the 5,611 spots referenced in the December term sheet is an inaccurate number. When the PFA was drafted in 2006, four parking garages yet to be constructed were assigned expected parking capacity values. However, after construction, these garages did not have the capacity as detailed in the PFA.
The Outfield has confirmed through review of Certificates of Occupancy obtained for these lots that the actual capacity is 429 spots less than the total provided for in the PFA. This results in an actual capacity of 5,182 compared to the 5,611 included in the term sheet.
NYCEDC representatives told The Outfield that the Yankees agreed in the December term sheet that they would not contest the number of parking spaces to be provided. A footnote that is repeated in several locations in the term sheet, signed by all parties, notes exactly that:
Yet it appears as though the Yankees are doing exactly what they agreed not to do. Senior Yankees officials told The Outfield that they are looking for a guarantee of 5,611 parking spots and have hinted that the amount is now lower than that number. NYCEDC representatives told The Outfield that the Yankees have proposed 5,500, but not quite down to the 5,182 actual legal capacity.
4. So how much parking do the Yankees actually need?
The current YSPS includes a total capacity of 9,127 parking spaces. The whole South Bronx stadium project came into existence due to the established fact that the parking facilities as part of YSPS are incredibly underutilized.
According to a January 2020 presentation given to Community Board 4 by NYCEDC, average parking occupancy within the YSPS was 36% (3,186 parking spots) in 2018, with a single game day high at 65% (5,933 parking spots).
From parking attendance reports obtained by The Outfield, only four game days in 2015 (the home opener, two Subway Series games against the crosstown Mets, and the wild card playoff game against the Astros) used parking from YSPS above the proposed reduced capacity of 5,182. No games came remotely close to using the full parking capacity of YSPS of 9,127.
5. What are the potential solutions?
Somebody needs to give in.
The Yankees are dead set on having a number of parking spots guaranteed for Yankee Stadium events. One solution could possibly see the Yankees waive the legal guarantee of an established number of spots, similar to what they have now, and keep the commitment to parking limited to making the remaining lots and garages in the YSPS available for Yankee Stadium event days.
On the other hand, Nuveen could provide the Yankees a guaranteed number of parking spots in exchange for a number closer to the actual legal capacity of 5,182.
The two sides haven’t spoken in weeks while the fight over the terms has moved into the media. NYCFC is rumored to now be looking for a stadium location in Queens in what seems to be a leverage move against the city.
Ultimately, the warring parties need to get back together and figure this out. This deal and potential development would provide way too many benefits to all of the stakeholders involved for it not to happen. ❧
Image: Photo by Yassine Khalfalli on Unsplash
This is wonderful work, Chris. I wonder why the Club would think threatening a stadium in Queens is a credible threat to NYC. I would assume NYC would be relatively indifferent between the Bronx and Queens and that the local governments in either borough have little ability to "outbid" the other.
It would be interesting to analyze the financial impact of those "phantom" parking spots is. If the lowered number will only exceed the new capacity on 4 days a year and the difference is generously 800 spots, the value to the Yankees of a max 800 spots x 4 days x $40 a spot is a max of $125k per year?
If they were $100 per game Super VIP spots (and they aren't, at least in those garages), the value per year is $325k? How is a low 6-figure annual number enough to scuttle a deal of this size?
This is wonderful work, Chris. I wonder why the Club would think threatening a stadium in Queens is a credible threat to NYC. I would assume NYC would be relatively indifferent between the Bronx and Queens and that the local governments in either borough have little ability to "outbid" the other.
It would be interesting to analyze the financial impact of those "phantom" parking spots is. If the lowered number will only exceed the new capacity on 4 days a year and the difference is generously 800 spots, the value to the Yankees of a max 800 spots x 4 days x $40 a spot is a max of $125k per year?
If they were $100 per game Super VIP spots (and they aren't, at least in those garages), the value per year is $325k? How is a low 6-figure annual number enough to scuttle a deal of this size?