New York taxi drivers and politicians are raising alarms after a secretive hedge fund this week quietly became the city’s largest owner of taxi-medallion loans.
Marblegate Asset Management — a tight-lipped investment firm that has already scooped up some 300 medallions and 1,000 loans, many of them previously owned by disgraced “Taxi King” Gene Freidman — has taken over loans tied to an additional 3,000 New York medallions, sources told The Post.
The deal — valued at about $350 million with the inclusion of an additional 1,500 loans from Chicago, Philadelphia and other cities, according to sources — makes Marblegate New York City’s biggest-ever owner of medallion loans, with nearly a third of the total of 13,500 issued.
The Greenwich, Conn.-based hedge fund didn’t respond to requests for comment, even as critics raised fears that the deal could spell more bad news for cab drivers.
The market value of a New York City taxi medallion — which had topped $1 million in late 2013 — has since tanked below $200,000 with the rise of ride-sharing startups like Uber and Lyft. With passengers defecting in droves, New York’s yellow-cab drivers are facing mounting debts, with nine suicides reported in the last two years.
Some industry sources said they were skeptical whether Marblegate would be interested in taking a haircut on the loans to help out taxi drivers.
“[Marblegate] is happy owning these assets because they want to own a superfleet and build economies of scale,” according to one industry insider. “The idea is to keep buying the loans, keep foreclosing on them and keep gobbling up medallions until you control the market.”
About 60 members of the New York Taxi Workers Alliance had driven down to Virginia on Wednesday in a last-ditch effort to stop Marblegate’s purchase of the loans from the National Credit Union Administration, a federal agency that had taken on the New York loans after the collapse of two local credit unions in 2018.
“It’s ridiculous,” said Bhairavi Desai, the taxi driver group’s executive director. “We’re pretty pissed off.”
Letitia James preps suit against city over medallion debt crisis
Desai says the group met with NCUA reps two weeks ago to discuss letting the Taxi Workers Alliance find a private partner that would help the nonprofit buy the loans. The alliance has said it wants to restructure the loans at uniform values of $150,000 and freeze monthly payments on those debts at $900.
Instead, Desai said that the NCUA — which said in a Wednesday announcement it has lost $760 million holding onto the debt — simply turned around and sold the medallions to the highest bidder.
“We are fiduciaries for the share insurance fund. We are not some hedge fund selling assets,” NCUA board member J. Mark McWatters told the 60 visiting New Yorkers at the regulator’s monthly board meeting in Virginia. “We needed to take this offer.”
The NCUA has assured the Taxi Workers Alliance that Marblegate is open to talking debt relief with medallion owners and that a meeting between the parties to start those talks has been set for “sometime next week,” Desai said.
City officials are equally concerned about what putting an outsize share of taxi medallions in the hands of a hedge fund means for taxi operators on the brink.
“People will read this story and think about committing suicide,” said City Council Member Ydanis Rodriguez, chair of the Transportation Committee. “We cannot wait for the city to create a public-private partnership to buy medallions in foreclosure and hold the medallions so that the debt on them can be reduced. We need to act yesterday on fixing this.”
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment