At an auction of 15 Taxi medallions held in late March, Bay Ridge Federal Credit Union priced the foreclosed assets at $200,000 apiece, but bids were not expected. Instead, the iconic metal placards will be used in what many hope will be a new phase for the Taxi industry.

Now that Bay Ridge FCU owns the medallions outright, freeing it of regulatory obligations and giving it flexibility in what it does with the assets, Anthony Grigos, CEO of the credit union, said: “This [auction] was not to attract the heavy-hitter investors.” Instead, the aim was to “put these 15 medallions back on the road, in the hands of owner-drivers.”

Grigos announced at the auction that Bay Ridge would offer financing to owner-drivers who pay $300,000 to $325,000 for a medallion. It believes buyers can make a go of it at that price, even though no one was willing to pay $200,000 in cash. Grigos arrived at the $300,000 figure based on what the credit union’s current medallion-loan recipients are earning from their taxis.

In addition, the purpose of a credit union is to help entrepreneurs, Grigos noted. An owner-driver paying off a $300,000 loan is a long-term customer and thus preferable to a private equity investor paying cash, he said.

The credit union will also be targeting owner-drivers who might have scraped together $150,000 for an all-cash deal with a medallion owner looking to get out of the business. Instead, “they can hold onto some of that money, use it for operations, and take out a low-interest loan,” said Matthew Daus, a former head of the Taxi and Limousine Commission and now a partner at Windels Marx, which hosted the auction at its Midtown offices. “[Bay Ridge Federal Credit Union is] looking to stimulate liquidity in the market by doing this.”

            Source: Crain’s New York Business

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