George Steinbrenner’s legacy, the new Yankee Stadium, includes better and more bathrooms, slightly less seating – and 9,000 too many parking spaces.
If the Yankees have an Achilles’ heel, it’s not their dodgy relief pitching or Jeter’s questionable ankle – it’s their parking garages. As Transportation Nation reports, Yankee Stadium’s garages, which are operated by the Bronx Parking Development Company, are tanking.
Perhaps because the Bronx Bombers’ revenues in 2011 were 156% as high as the second most valuable MLB franchise – due to lucrative merchandising and TV deals – we’re accustomed to looking at them as the gold standard when it comes to business (A.J. Burnett’s turkey of a contract notwithstanding). Nonetheless, it’s looking like the bondholders who funded Yankee Stadium’s garages are due to take a $237m haircut when their next payout is due in April.
This team’s attendance is consistently at or near capacity, and it’s still the most popular team in America besides possibly the Dallas Cowboys, so why shouldn’t the Yankees be able to fill their parking spots – or at least do better than the 43% figure cited by the Transportation Nation article?
Pictured is the old stadium near its peak, home to 26 championships for the Yankees. With the addition of a nearby Metro North stop, even suburbanites are increasingly able to take public transport to the game.
In a phone conversation, Neil DeMause, an author and journalist who follows stadium funding through his blog at fieldofschemes.com, said there are a few factors at work.
- Misjudging the market. DeMause says, “It’s a flaw that they thought people were going to want to pay $25 [minimum] to park at a Yankees game.” There is plenty of on- and off-street parking elsewhere in the neighborhood; if the Yankees lowered prices to compete, “they wouldn’t be able to pay on their bonds.”
- Project creep. When owners negotiate new stadium deals with cities – a necessary part of the process no matter how much direct public financing ends up being needed – DeMause says they tend to “ask for the moon,” particularly when it feels likely that they’ll get it. The late George Steinbrenner knew New York City would act as a backstop in case the parking was underused. Because the Yankees’ parking facilities are technically owned by a separate company, the team itself won’t end up responsible. With 57% of the garages left empty even on game days, that’s exactly what’s happening.
- Changing transportation trends. When asked whether other owners like the Vikings’ Zygi Wilf and the Rays’ Stuart Sternberg will have their eye on the Yankees’ parking losses when figuring out parking for future stadiums, DeMause says that although financing and planning for every project is different, “You can’t just assume like you did 40 years ago that everybody wants to drive.” Even the suburbanites the city expected to flock to the stadium’s parking have increasingly taken public transport to games.
- In a way, the original parking garage financing was also financing the stadium. The underground Ruppert Plaza Garage had to be engineered not just to hold cars, but to hold up a Macombs Dam Park and Heritage Field on top – resulting in what DeMause calls a “hidden land cost.” The extra cost of such a complex job served to multiply the usual costs of surface parking.
When all is said and done, the overbuilding of Yankee parking may have resulted in a loss of as much as [an average of 9,000 spare spots] x [$25 each] x [81 home games] = $18,225,000 per year, give or take a few million. Compared to the titanic size of the franchise, however, that’s a drop in the bucket. The team itself isn’t going to end up in the hole, though – as the Transportation Nation article and DeMause both pointed out, Yankee parking is run by a private (some might say “shell”) company, limiting the team’s liability, while increasing bondholders’ (and, depending on how much of a haircut bondholders are prepared to take, possibly the public’s).
The view from Nick Swisher’s office might be pretty nice, but some of the costs for the House that George Built are in danger of being passed on to bondholders… and even the public.
The whole situation is sadly symptomatic of the maximal parking that has afflicted American urban planning for years. In his insistence on making room for as many cars as possible, the late George Steinbrenner unwittingly resembled planners who design mall parking with only Black Friday in mind – perhaps unsurprising, given his propensity for hiring pitchers like Carl Pavano assuming they’d continue to operate at their peaks.
Accurately predicting demand is always tough, but building parking for Yankee Stadium that only paid attention to what happens on the 81 days that the Yankees have home games (rather than the three quarters of the time that no one uses the land) was always going to be a losing proposition; it’s looking like bondholders will be left holding the bag when their next payout falls short. Tighter, more carefully planned and priced parking will be the long-term answer.