June 26 (Reuters) - Investors in around $237 million of bonds in a parking garage for the New York Yankees baseball stadium need to accept cuts in the principal as part of a restructuring or the firm behind the project could go bankrupt, a financial advisor to the firm said.
The debt was issued by the New York City Industrial Development Agency. The Bronx Parking Development Company (BPDC) used the tax-exempt debt to build a garage near the new Bronx stadium constructed for the Yankees. In January, the company forecast that its operating revenue would not be enough to make debt service payments due on October 1, 2012, and on April 1, 2013, according to a legal filing by the trustee.
In May, a majority of the bondholders agreed to a 45-day waiver to give the BPDC time to devise a plan to avoid a default.
“In the absence of such a restructuring, there will be continuing defaults which will require waivers and result in additional legal expense,” Edward Moran, the financial advisor hired by BPDC, said in a legal notice filed with the Municipal Securities Rulemaking Board on Tuesday.
“Unless debt service costs are lowered through a voluntary restructuring, bankruptcy will eventually be BPDC’s only available option,” Moran added.
Critics of the project say the parking fees it charges are so high that they deter motorists.
Further, a new Metro North station is encouraging more baseball fans to use mass transit. A nearby mall has competing parking spaces.
A spokesman for the city agency and the lawyer for the Bronx Parking Development company were not immediately available.
Moran also recommended coordinating marketing for the garage with the New York Yankees and examining whether commissions could be paid to team employees “within the restrictions of the tax-exempt status of the bonds.” (Reporting by Joan Gralla; Editing by Andrew Hay)