Category Archives: Parks

Operator of Yankee Stadium Parking System Strikes Out: With Bonds in Default and Growing Debt to the City, Company Issued Request for Proposals to Redevelop Two Lots

Posted by Doug Turetsky, July 11, 2013

In 1970, Joni Mitchell famously sang about tearing down paradise to put up a parking lot. More than 40 years later, it looks like a financially troubled set of parking lots and garages built in conjunction with the new Yankee Stadium will add a different twist to Mitchell’s refrain.

The parking system, which contains nearly 9,300 spaces, was built with substantial public subsidies, including $238 million in tax-exempt bonds and direct subsidies of $70 million from the state and $39 million from the city. Additionally, about 3 acres were removed from use as city parkland and leased by the city to the parking system. Use of the garages and lots has been well below expectation and the parking system has not generated sufficient revenue to make recent payments to bondholders.

With the Bronx Parking Development Company, which runs the parking system, in default and in need of new revenue, a request for proposals was issued to sublease and redevelop two lots near Yankee Stadium. The responses were due June 5 to the Bronx parking company. Edward Moran, who was hired to restructure the parking company, did not respond to two e-mail requests and a follow-up phone call for information about the number of proposals received and when a selection is expected to be made.

A payment of $6.9 million was due bondholders April 1. The last payment made was in October, when the company drained much of its reserve fund to meet its obligation to bondholders. While the bonds were issued by the city’s Industrial Development Agency, the city is technically not responsible for repaying the bondholders.

Yet the city may still lose on the deal. The Bronx parking company has not paid the city any of the $3.2 million in annual rent that has been due since January 2008 nor has it made any of the required payments in lieu of taxes. Under the terms of the lease with the Bronx Parking Development Company, money owed to the city takes a back seat to payments to bondholders if revenues are insufficient to cover both.

In October 2012, it was reported that the parking company owed the city $25.5 million. City financial documents that IBO receives do not specify how much is currently owed by the Bronx parking company. Neither Moran nor the Mayor’s Office of Management and Budget responded to several requests for this information.

Although the Yankees demanded a parking system able to hold about 8,700 cars plus 600 for its own use—more parking spots than were available for the old stadium even though the new stadium holds about 6,600 fewer fans—the team itself bears no financial responsibility for the garages and lots.

Even on game days, use of the Bronx parking company’s system has been much lower than expected. A number of factors contribute to this, not the least of which is cost. The price for parking at the system’s garages and lots is higher than at the old stadium, and on game days can run as much as $48 for valet parking. There are cheaper parking alternatives nearby at the Gateway Mall and more fans are taking public transit to the game than in the past, especially after the opening of the new Metro-North railway station in 2009. Ironically, the recent request for proposals to redevelop the lots on 151st Street between River and Gerard Avenues touts the site’s easy accessibility by public transportation as a prime selling point.

Last March, City Comptroller John Liu issued an audit report critical of a number of Industrial Development Agency deals, including the one with Bronx Parking Development Company. The Comptroller’s office contended that the projections of revenue from the parking system “…were based on questionable occupancy rates and inflated attendance figures and did not account for demand fluctuations that would result from price increases and competition.”

While the default sparked the effort to redevelop two of the lots and bring in more revenue for the fiscally challenged parking company, it has also brought some new players into the saga of the parking system—including a major proponent of building a new stadium for the Yankees. Creditors hired Bracewell & Giuliani, the firm of former Mayor Rudolph Giuliani, to represent them in negotiations with Bronx Parking Development Company. The parking company agreed to pick up the tab for Bracewell & Giuliani and has budgeted $240,000 in 2013 to pay the Mayor’s firm.

But none of the expected $7.1 million in parking company operating expenditures this year include rent or payments in lieu of taxes owed to the city. As the saying goes, wait till next year.

New York City: Your Ad Here

Posted by Doug Turetsky, September 6, 2012

New York City itself may not be for sale, but the rights to tie your corporate name and logo to a variety of city facilities and services may increasingly be up for grabs as public agencies look for ways to raise revenues to meet growing expenses and offset city funding cuts.

On September 14, the city’s parks department is scheduled to receive bids from companies for the right to affix their names to 55 dog runs and 631 basketball courts. The city’s 2013 budget anticipates $1.5 million in annual revenue for the naming rights to the dog runs and $3.5 million from the basketball courts in fiscal years 2013-2016. An additional $8.0 million in annual revenue over the same period is expected through more sponsorships, although the parks department has not yet announced what facilities it will offer to potential sponsors. The city’s financial plan expects the parks department to take in $13 million annually in sponsorship revenues through 2016.

The parks department’s effort to sell these naming rights is being done under an initiative it calls the NYC Parks Corporate Partnership Program. Under this program, the agency says, “[C]ompanies can invest in a unique opportunity to promote their brand through NYC parks assets.” The parks department is offering potential partners rights that can stretch from onsite to online.

IMG Worldwide, a major sports and fashion marketing and licensing company, has been enlisted to play a key role in the parks’ partnership program (IMG is the marketer of New York City Fashion Week). The parks department Web site describes IMG as “the exclusive designated agency to develop and commercialize this opportunity.” Proposals for sponsoring the dog runs and basketball courts are to be sent to IMG. For its work on behalf of the parks department, IMG is reportedly being paid by NYC & Company, a private organization that does tourism promotion and marketing for the city. In 2011, about 40 percent of NYC & Company’s $36.4 million in revenues came from city funding.

The parks department is not the first agency to market naming or sponsorship opportunities. The Department of Transportation’s bike-share program, now expected to start rolling in March 2013, is being funded solely with sponsorship money: $41 million from Citigroup and $6.5 million from MasterCard. For its cash, Citigroup will get its name on 10,000 bikes and 600 docking stations around the city. MasterCard is providing the payment system for the program.

Similarly, the Metropolitan Transportation Authority is seeking to take greater advantage of the MetroCard’s ubiquity as well as its iconic link to the city by offering advertising space on the front of the card. The back of the card has already been available at costs ranging from $25,500 for 50,000 cards to $450,000 for 2.5 million cards. Rates for the front of the card haven’t been determined yet.

The transportation authority has also sold naming rights to the Atlantic Avenue-Pacific Street subway stop for $200,000 a year for 20 years to the British banking firm Barclays. The station, which sits under the soon-to-be opened Barclays Center arena in Brooklyn, is now called Atlantic Avenue-Barclays Center (Barclays paid $400 million over 20 years to purchase naming rights for the publicly subsidized arena from the Nets).

At least one other local agency has declared its intention to offer up its facilities for some form of advertising. Last September, the Daily News reported that the New York City Housing Authority was floating the notion of offering billboards to advertisers at its development projects, an idea that provoked unease among some residents and elected officials.

But the housing authority still sees its 2,600 buildings in 334 developments citywide as an opportunity for prospective advertisers. In January, the housing authority released Plan NYCHA: A Roadmap For Preservation, a five-year plan to improve services and increase partnerships and revenues. Although it provides only the barest of details, the plan states that the housing authority aims to “design and launch a plan to offer NYCHA property for advertising with input from residents.”

New York’s streets were once believed to be paved with gold. In the future, they may increasingly be paved with sponsorship dollars.

Double Fault: Will Mayor’s Plan to Hike City Rec Center, Tennis Court, & Ball Field Fees Undermine His Efforts to Promote Healthy Living?

Posted by Yevgeniya Bukshpun, December 7, 2010

Despite its highly publicized goal of promoting a healthy lifestyle among city residents, the Bloomberg Administration announced plans to double the membership fees at the city’s recreational centers and increase the costs for tennis and ball field permits as part of its latest budget plan. The result may be that a signature policy, whose long-term goal is to improve the health of New Yorkers, may be undermined by a shorter-term goal of balancing the budget.

Children and youth would still be admitted to recreation centers for free, while adults would have to pay $150 per year for centers with pools, up from $75, and pay $100 for centers without pools, up from $50. Membership fees for senior citizens, who currently pay $10 per year, would increase to $25.

Seasonal tennis permits for adults would also double, from $100 to $200, while single play permits would rise from $7 to $15. Permits for ball field use would also increase: fees for fields without lights would rise from $16 to $25 and those for lighted fields would rise from $32 to $50.

The recent history of the city’s recreational centers reflects a persistent tension between recovering costs for services and a broader goal of providing equitable access to recreational opportunities for all city residents. Prior to 2002, all of the city’s recreational centers were free of charge but welcomed user donations. Faced with the economic crisis after the Sept. 11 attacks, the city instituted mandatory fees at all but six recreational centers that were funded by federal grant money. In July 2006, the parks department began charging fees at all recreational facilities.

This next round of fee hikes comes at a time when many New Yorkers rely on these recreational centers and facilities as an affordable alternative to more expensive private clubs. In 2010, 174,000 New Yorkers were members of the city’s recreational centers. Membership among seniors and children has been increasing each year since 2006. Kids make up 36 percent of center users, while about 20 percent of members are seniors. Adults, at nearly half the total membership, represent the largest share of those who use recreational centers. Yet adults may have been the most sensitive to fee increases as adult membership declined by 38 percent after the expansion of mandatory fees in fiscal year 2007 and took two years to rebound. Since 2007, overall membership at the city’s recreational centers has trended upward.

While the 2007 drop in membership may have been caused by more than just the fee hike, given the continued high level of unemployment in the city it is likely that membership will decrease as a result of the fee increases. Access to public recreational facilities contributes to overall public health and the fee increase may seriously undercut access in low-income communities that are likely to be especially sensitive to price increases. Low-income communities experience higher rates of obesity and diabetes, with 7 in 10 residents overweight or obese, compared with the citywide average of 6 in 10 residents.

As the number of adult and senior citizen members increased over the past few years, revenue from recreation center membership fees reached $4.8 million in fiscal year 2010. Assuming a 5 percent decline in membership, the parks department expects the higher membership fees to increase city revenue by $1 million in the current fiscal year and by $4 million each year starting in 2012, bringing the total membership revenue to $5.8 million in 2011 and $8.8 million in 2012. In 2010, revenue covered less than one-quarter of the $21.5 million the city spent operating the centers. If fees are raised as proposed and the department’s forecast of modest declines in membership proves correct, membership revenue would still cover less than half the cost of operating the centers.

The likelihood of significant new revenue from a fee increase on the sale of tennis permits is less certain. In fiscal year 2010, the city issued 12,800 permits to use tennis courts, which generated $1.8 million of revenue. Officials project the same 5 percent decline in tennis permits as in recreation center memberships as a result of the increase in fees. If so, sales of tennis permits would bring in $1.2 million of additional funds in 2011 and total $3.0 million. In 2012 through 2014 the parks department expects the higher priced permits to score $3.4 million in annual revenue.

But these revenue projections may be too optimistic given the behavioral change seen a few years ago. IBO’s previous research found that doubling the cost of adult season tennis court passes in 2003—from $50 to $100—led to a 40 percent drop in sales volume, as players switched to single-play passes. Sales of single-play passes, the price for which remained unchanged at $5 until 2005—increased, yet total revenues rose only marginally from $1.2 million in 2002, prior to the fee increase, to $1.4 million in 2005 following both fee increases.

Whether the city is able to generate the additional revenues it projects will depend on how city residents react to a 100 percent increase in recreation center membership fees and tennis permits and a nearly 60 percent increase in ball field permits at a time when many New Yorkers are still struggling to recover from the economic downturn. Residents may seek out less expensive ways to stay physically fit or stay home altogether and undermine the Mayor’s efforts to keep them healthy.

Mayor’s Schoolyards-to-Playgrounds Plan Takes a Hit

Posted by Patryk Drozdzik and Doug Turetsky with map by Ana Champeny, December 16, 2009

Mayor Michael Bloomberg’s PlaNYC, introduced with much fanfare on Earth Day 2007, included 127 policy initiatives to make the city a greener, healthier, more energy-efficient place. One of PlanNYC’s signature initiatives was the idea to increase the availability of open space in the city by turning 290 city schoolyards into public playgrounds by keeping them open after school, on weekends and during school breaks. While the schoolyard-to-playground plan received considerable attention when first announced, its subsequent scaling back has garnered less notice.

Underlying the Mayor’s schoolyard initiative were a combination of need and common sense. The need for more open space in the city is apparent to many New Yorkers, continuing a debate that has roiled the city since at least the 1800s over how much land should be developed and how much preserved for parks and playgrounds.

Recent figures compiled by the Trust for Public Land show that by some key measures, New York City lags well behind other cities in the availability of parks and playgrounds. New York has 4.6 acres of parkland per 1,000 residents, well below the median of 6.8 acres among 13 densely populated cities. New York’s 1.2 park playgrounds per 10,000 residents are little more than half the 2.1 median among the 76 large cities surveyed on this measure by the trust.

Because of stats like these, the Mayor wanted to make more play and open space available so that every New Yorker lived within a 10 minute walk of a park or playground. And that is where the common sense comes in. The Mayor realized that schoolyards across the city were an underused resource, frequently locked when needed most. The Bloomberg Administration reckoned that 69 schoolyards required nothing more than a school custodian to turn a key in order to help meet the goal. And by the summer of 2007, 69 were in fact opened—at a cost of $50,000 per school to pay custodians as reported by the New York Post—in neighborhoods ranging from Brownsville in Brooklyn to Belmont in the Bronx. Click here for a map of schoolyards that have already opened along with other locations that were proposed for the program all the proposed locations and their current status.

More than 200 schoolyards that the Mayor also wanted to open needed more than just additional funds for custodians. These schoolyards needed investments ranging from the installation of play equipment to pavement repairs and new fencing. In April 2007 the Mayor budgeted $96.4 million in capital funds for the necessary fixes. Since then the capital budget for the plan has steadily shrunk and as of the latest capital plan now totals $71.1million, a 26 percent cut.

With the shrinking funds has come the elimination of two dozen schoolyards from the initiative. According to information provided by the parks department, 24 schoolyards have been cut, bringing the total down to 266. Nine of the 81 schoolyards initially proposed for Queen have been canceled, including in neighborhoods such as Jackson Heights, Hollis, and Rosedale. Brooklyn has eight canceled schoolyard projects among the 104 originally proposed, including two in Borough Park, and seven have been axed in the Bronx among the 57 originally planned, including two in Morris Heights. (It should be noted that three other schoolyards have already been opened in Borough Park, and one in Morris Heights.) In contrast, none of the 20 projects initially planned for Manhattan have been canceled or any of the 28 targeted for Staten Island.

So far, the Bloomberg Administration has actually committed $30.2 million in capital dollars for the schoolyards-to-playgrounds effort and plans to commit an additional $40.9 million this fiscal year. A total of 96 schoolyards are now open under the initiative. But many of the schoolyards yet to be finished under the plan require the most work. If fiscal pressure on the city continues to mount, fewer schoolyard-to-playground conversions may result.

City’s Capital Plan Grows: More Projects, Some More Spending

Posted by Ana M. Ventura, November 9, 2009

A number of fiscal mavens have voiced concerns in recent months that the city’s capital budget is too big and unaffordable. These concerns have not escaped the notice of Mayor Bloomberg, who has sought to reduce the amount the city spends on debt service—the interest and principal the city pays to borrow money for capital projects such as building schools, fixing roads, and buying fire trucks—by scaling back the city’s 10-year capital plan.

So it may come as a surprise to many observers that the city’s latest Adopted Capital Commitment Plan, which covers four years, has grown by hundreds of projects and millions of dollars. The Adopted Capital Commitment Plan, released in September, presents information on how much the city has appropriated in the current fiscal year and next three years for capital projects and a timeline for committing those project funds. This latest plan adds $708 million (adjusted for capital funds made available in 2009 but now pushed into the new plan) and nearly 700 capital projects, compared to the prior plan released in conjunction with the Mayor’s Executive Budget last spring. As in past years, the largest shares of capital funding go to school and environmental projects.

The city’s four-year capital plan allocates $38.4 billion for projects. Included in the plan total is $1.5 billion allocated at the request of the City Council and $680 million by the Borough Presidents. Roughly 80 percent of the funding comes from the city, with the remaining $7.8 billion coming from federal, state, and private grants.

These funds support nearly 7,400 projects (including school projects that are itemized separately in the city’s financial management system). The Adopted Capital Commitment Plan includes 941 new capital projects and drops 244 projects that were part of the prior plan. The new projects include 390 sponsored by the City Council and 108 sponsored by the Borough Presidents. Out of all the new projects certain types were among those most commonly added: there are 123 new citywide equipment purchases and 101 new parks and recreational facilities projects.

Nearly half of the plan’s total budget—$19.0 billion—is scheduled to be committed in fiscal year 2010. The rest of the funds are expected to be committed over the next three years: $6.9 billion in fiscal year 2011, $5.6 billion in fiscal year 2012, and $6.8 billion in fiscal year 2013. While the total for 2010 appears comparatively large, it is actually bulked up by previously authorized funds. Because some types of capital projects frequently fall behind schedule, the level of funds authorized by the Mayor’s budget office typically exceeds the expected commitments by about 35 percent.

Roughly $7.1 billion in capital funds were transferred, or rolled, from fiscal year 2009 into the new plan. Most capital funds rolled from a prior fiscal year tend to be allocated to the next year, as is the case under the new plan. But some of the funds rolled forward are also allocated to later years of the Capital Commitment Plan. Largely because of the funds rolled forward from 2009, the new plan is roughly 25 percent bigger than the prior $30.6 billion four-year plan.

But if you subtract the rollover funds, the latest plan still provides $708 million more (2.3 percent) than the prior plan. Almost all of this increase comes from additional city funding; about 1 percent of the $708 million comes from other sources.

Despite challenging economic times and recent actions by the Bloomberg Administration to curtail long-term city-funded capital spending, the city’s capital program continues to expand moderately.

About Those Services You Prioritized

Posted by Doug Turetsky, March 19, 2009

Each year, as part of the city’s budget process, the 59 community boards are asked to rank the most important services in their districts. For fiscal year 2010, community boards could rank the importance of 90 services provided by 24 public agencies. The services to rank ranged from sidewalk repair to child care to trash collection. The community board priorities are then published in a little-known report called the “Community Board Service Program Rankings.”

So what are the most important services to the 48 community boards that participated in this year’s report? Topping the list is “services for the elderly”—up from sixth last year. Number two is “parks maintenance,” which was also second last year. Third is “after school/summer school programs” and fourth “youth development services,” which frequently overlap with after-school related activities. After-school and youth development services were tied for third last year.

The report also identified the priorities by borough. Services for the elderly are among the top three priorities for each of the boroughs except Staten Island, where it ranked 12th. Parks maintenance is among the top four priorities in each of the boroughs except Manhattan, where it ranked eighth. The ranking of after school and youth development services are more of a mix among the boroughs, though youth development is tops in Brooklyn and after school is number one in the Bronx and second in Brooklyn and Manhattan.

How did these top priorities fare in the Mayor’s Preliminary Budget for the upcoming fiscal year? Well, funding for senior centers is facing a $5.3 million cut, making the total budget for the centers $86.5 million next year. It is not clear yet how services will be affected, whether senior centers will have to reduce the number of people served or eliminate programs.

The parks department budget includes a proposed reduction in spending on maintenance and operations, which would drop from $244.1 million this year to $222.5 million in fiscal year 2010. About 90 percent of the parks department’s maintenance and operations budget goes to taking care of neighborhood parks.

After-school programs are also facing the budget ax. The budget plan includes the elimination of 91 Out-of-School Time programs serving 10,750 kids to save $6.1 million. Because of this and other budgetary changes, the number of youth served by Out-of-School Time programs is expected to drop from roughly 80,000 last school year to 56,000 in the upcoming year.

Senior services, parks maintenance, and youth programs have long been a City Council priority, with proposed cuts restored—sometimes with additional funds—when the budget is adopted. But given the city’s fiscal turmoil and the level of budget cuts in many other programs, there’s no guarantee for the year ahead.