Yankees Look to Refinance $1 Billion Stadium Debt

With interest rates hovering around record lows, Yankees owner Hal Steinbrenner is looking to ease some of the financial burdens from his sweet new digs in the Bronx.

If you’ve got a cool $1.04 billion lying around, the Yankees are looking to sell some tax-exempt revenue bonds to refinance debt incurred while building the ‘House that Jeter Built.’

Otherwise, the organization will look to refinance around $1.2 billion worth of outstanding debt they took on during the time of construction of the new Yankee Stadium (2006-2009); saving them around $10 million annually, which could, in turn, make the Yankees profitable.

It’s hard to comprehend how a professional sports team, that was valued at over $3.4 billion as recently as of March, could be in the red, but when you’re losing an estimated $73 million this year and next, then possibly as much as $76 million in 2018, cost cutting options need to come into play.

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Perhaps this is one reason why General Manager Brian Cashman hasn’t had carte blanche during the typically highfaluting winter months, over the span of the last two years.

According to sources, the Yankees are breaking even at the moment, though this doesn’t count entities such as the YES Network or Legends Hospitality.

As read in the NY Post on Monday, the Yankees will need assistance from the City of New York for any alteration to their current arrangement, because although the stadium in owned by NYCIDA, it is leased out by the city due to the fact that Yankee Stadium was built on public parkland.

"Sports teams aren’t allowed to use tax-exempt “private activity bonds” to build stadiums. To get around this IRS rule, the New York City Industrial Development Agency issued 40-year bonds to help build the ballpark.That financial structure means the stadium is city-owned and therefore exempt from city, state and federal taxes. The Yanks make debt payments in lieu of real estate taxes, so-called PILOT payments.In order to keep the tax-exempt status and avoid running afoul of IRS rules, the Yanks need the city to issue bonds to refinance the stadium.To win support, the team is proposing giving back roughly 2,000 of the 9,000 parking spaces it received from the struggling Bronx Parking Development Co., a source close to the situation said.The money-losing operator of the Yankee Stadium parking garages could in turn sub-lease the space to a developer for housing or a hotel."

Next: Yankees Playing the Waiver Wire Game

The New York City Industrial Development Agency has scheduled a Sept. 15 hearing on the proposed refinancing. It will be interesting to see just how the ruling unfolds, as it could potentially have an impact on how, or if, the Yankees are able to add sizeable contracts this offseason.

With interest rates hovering around record lows, Yankees owner Hal Steinbrenner is looking to ease some of the financial burdens from his sweet new digs in the Bronx.

More from Yanks Go Yard

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