Company That Helped Demolish Yankee Stadium Collapses in Bankruptcy

There’s a new Curse of the Bambino.

The construction firm that helped tear down the old Yankee Stadium—the tubular concrete venue in the South Bronx known as the House That Ruth Built—has itself been crushed by the prolonged economic downturn, prompting it to file for bankruptcy.

Demco Inc., based outside Buffalo, N.Y., said that it has had trouble finding work to keep busy after finishing the $20 million demolition job on the former Yankee Stadium, which hosted more than 6,000 baseball games in its 85-year history.

In place of the stadium, which was replaced with a $1.5 billion ballpark nearby, there’s now a park.

Demco workers stripped out the old stadium’s 57,000 seats and extracted memorabilia before executing more than 30 so-called cut-and-pulls, a maneuver that divided the upper and lower decks into chunks of up to 500 tons that workers then pulled down to the ground, according to the company’s website. It was a dangerous task, with some of segments located “just feet from the MTA elevated subway structure,” the website said.

Perhaps the dismantling didn’t settle well with baseball legend Babe Ruth, who died in 1948 at age 53 of pneumonia but who left behind an 86-year spell on the Boston Red Sox, who were only able to break their World Series losing streak in 2004…or it could just be that cautious companies and governments are pushing demolition projects further down their “to do” list.

“In times of recession like those in recent years, potential customers who either may not have an immediate need for demolition services or who may not currently have access to the capital necessary to fund both such demolition and new construction projects, may choose to defer incurring the expense of demolition work,” said Daniel F. Brown, the company’s bankruptcy attorney, in court papers.

The 92-worker company, whose ranks have ballooned to nearly 300 employees during busier times, is down to only eight projects, according to court papers.

In the past, Demco has been hired to wipe monuments from the skylines of major cities. In 2008, it took down Miami’s 72,000-seat Orange Bowl stadium, salvaging historic artifacts that the city planned to use for its Miami Marlins baseball stadium, according to the company’s website.

The company was paid nearly $2 million to demolish the floating Palace Casino that slammed into the Biloxi, Miss., coastline during Hurricane Katrina in 2005—a job that required workers to be mindful of the water quality. And Demco took in $2.7 million to remove the 98-story Memorial Auditorium in downtown Buffalo, N.Y., once home to the Buffalo Sabres hockey team.

Demco workers are still handling the $70 million job to take down the Sunflower Army Ammunition Plant in DeSoto, Kan., which produced more than 200 million pounds of propellants and employed more than 12,000 people during World War II, according to the company’s website.

(For bankruptcy enthusiasts: Demco said it blew up buildings from 1995 to 2001 in the Eastman Kodak Business Park in Rochester, N.Y.,  a move that was rumored to save the camera company money on property taxes piling up on empty real estate.)

But a major chunk of Demco’s revenue comes not from blowing things up but from selling the pieces. The company said that it has profited from contracts that authorize it to salvage, recycle and sell materials from the wreckage—a market that’s suffered in recent years.

“As the prices of commodities have dropped, so have Demco’s revenues from such salvage efforts,” Brown said in court papers.

Demco filed for Chapter 11 protection, the kind that most companies use to reorganize and continue operating, on Monday in U.S. Bankruptcy Court in Buffalo. Already, company executives have asked a judge to let them spend more than $13.2 million in cash that’s pledged as collateral for its lenders’ claims. The cash would help the company continue operating throughout the case, according to court papers.

The company said it owes about $8.1 million to First Niagara Bank and another $5.5 million on a loan from an industrial rubber ring manufacturer.

Write to Katy Stech at [email protected].