The head of the Taxi and Limousine Commission has trashed a yellow cab medallion bailout plan—supported by the state attorney general and the city comptroller—calling it “not implementable,” according to a leaked recording.
TLC Chairwoman and Commissioner Aloysee Heredia Jarmoszuk told taxi medallion lenders on a March 31 group call that the rescue plan now working its way through the state Legislature would not work.
“The plan itself, at least sounded good, but was not implementable, and would create a myriad of issues and complications especially around foreclosures,” Jarmoszuk said on the recording of the call. “And the math just didn’t seem to work out.”
The TLC chief spoke to at least six lenders during the conference call with the express aim of making them aware of the city’s taxi medallion relief plan. Last month the de Blasio administration announced a plan that would allow medallion owners to restructure their debt through a $20,000 loan and up to $9,000 in debt payment support through a $65 million fund provided by the federal government in the recent stimulus package.
“We want for this program to achieve meaningful reduction in principle, reduced interest rates and extended amortization periods,” Jarmoszuk told the lenders.
Taxi drivers who owe more than $200,000 on their depreciated medallion loan have questioned how $20,000 from the city will motivate any lender to reduce a larger debt amount, a concern that Jarmoszuk seemed to recognize during her conference with the lenders.
“We need all parties, including all of you, to work together on these restructured loans,” Jarmoszuk said. “The city is actually committing funds. We’re not going to tell you how to value the medallion asset. We know there isn’t a one-size-fits-all solution for medallion debt.”
During the call, Jarmoszuk rejected the competing plan to the taxi medallion crisis proposed by the New York Taxi Workers Alliance—and supported by both Attorney General Letitia James and Comptroller Scott Stringer—that calls on the city or the state to create a $125,000 price ceiling for the value of the medallion loan that could be amortized at 4% over 20 years so the medallion owners could pay $757 per month to the lenders.
“It sort of backed into a desired principal amount and mortgage payment that wasn’t mathematically based,” Jarmoszuk said on the call. “I personally wasn’t able to understand or explain how that plan would work.”
Bhairavi Desai, executive director of the New York Taxi Workers Alliance, confirmed to Crain’s that she had met with Jarmoszuk in June 2020 and that Jarmoszuk was referring to her plan in the recording.
“She was the first person we went to. We went to her with a lot of hope,” Desai said. “If they didn’t understand our numbers, why didn’t they ask for a meeting? They took our ideas and threw them into the dustbin.”
The comments by Jarmoszuk were recorded by an individual present at the call who provided the recording to Crain’s. At least six taxi medallion lenders spoke on the call that included a minimum of 10 participants, including additional leadership from the TLC.
The comments by Jarmoszuk are striking because James and Stringer have openly supported the alliance’s plan.
In fact, the attorney general’s office dropped an investigation into the TLC earlier this year after it had announced an $810 million legal notice regarding allegations of fraud pertaining to the pricing of yellow cab medallions.
“The New York Taxi Workers Alliance has put forward what my office believes is a fiscally sound approach,” the comptroller said. “We have a financial obligation to fix this, and I believe that embracing this plan is the best start.”
Neither Stringer’s nor James’ office answered a request for comment regarding the TLC’s fiscal criticism of their support.
The TLC did not respond to a request for comment on Jarmoszuk’s remarks to the lenders.
Both the city and state are scrambling to find a way to provide financial relief for taxi medallion owners who are drowning in debt from taxi medallion loans that have depreciated in value since Uber and Lyft entered the city’s transportation market nearly 10 years ago.
SOURCE: Section Page News – Crain’s New York Business – Read entire story here.