Distressed Debt Hedge Funds Eye Yankee Stadium Parking Bonds

Jun 15 2011 | 2:29am ET

While one hedge fund manager is close to buying a big chunk of one of New York's professional baseball teams, two others are settling for the parking lots around the other's stadium.

Davidson Kempner Capital Management and Monarch Alternative Capital—which made headlines last year as it sought to derail the sale of the Texas Rangers—are buying up the municipal debt of the Bronx Parking Development Co., which owns the 11 parking lots around Yankee Stadium, Bloomberg News reports.

BDP, whose parent has defaulted on loans on two other projects in New York State, is in danger of missing an interest payment next year. The problem? Despite the fact that the New York Yankees are routinely the highest-drawing team in Major League Baseball, and despite the fact that attendance is up in the Bronx this year by 16%, fans are staying away from the garages. After a poor year last year, BDP jacked up the price to park to $35, but that seems only to have driven more fans away.

On the average game day, the lots are 57% empty, leaving BDP with 28% less revenue than it expected. The company was forced to draw on reserves to make its bond payment in April, with creditors agreeing not to declare the bonds in default in exchange for operational changes.

If BDP does eventually default, the bondholders, including Monarch and Davidson Kempner, could take over the garages themselves or force BDP into bankruptcy.

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