Court Upholds DHCR 30% Max Maint. Surcharge Against Rivercross

In an Article 78 proceeding brought by Roosevelt Island's Rivercross Tenants Corporation against the Department of Housing and Community Renewal the trial court ruled that the DHCR order to increase the maximum maintenance surcharge from 20% to 30% be upheld.

In an internal memo, dated November 26, 2008, circulated among the tenant shareholders, the Rivercross Board announced it intends to appeal the decision to the Appellate Division. The memo indicated that it would be about 6 months before any decision could be expected in their appeal.

The Rivercross Board asserts as one component to their case that in 2001 the DHCR argued that Mitchell Lama Coops be allowed to set their own surcharge schedule and that now DHCR is claiming that the Coop Board now not be allowed that to do just that.

The Roosevelt Islander discussed this case with a good amount of background info this past August linked HERE.

WIRE: Rivercross Surcharge & Maintenance Hike

According to an email report by the Main Street WIRE

:

"DHCR Plans Hike in Rivercross Surcharge

DHCR plans to order an increase in the Rivercross surcharge, levied on residents whose income exceeds the maximum allowed in a building, from 20% to 30%, according to an e-mail from DHCR Commissioner Deborah van Amerongen to Assemblymember Micah Kellner.

Van Amerongen said that DHCR staff called the building's managing agent today with the news. In addition, DHCR has approved an increase in maintenance charges which, if levied in one step, would be $7.45 per room (about 2.5%) per month (or $4.97/room/month if levied in two steps).

With regard to the surcharge increase, van Amerongen wrote, "...the [Rivercross] Board will be informed of our decision sometime today. If they decide to challenge this that is of course their right, we will argue the case in court.""

Roosevelt Island: Goodbye Eliot, Hello David

Eliot Spitzer during his gubernatorial campaign stopped at Roosevelt Island’s Church of the Good Shepherd and promised change. Island residents excited at the chance of keeping a Republican Governor out Albany were eager for Spitzer’s message of better days. Residents voted in large numbers for Spitzer evidencing their desire for change. During this last year we saw the ouster of Herb Berman and installation of Spitzer appointee Stephen Shane as RIOC CEO and President and we expected / hoped that Spitzer would respect our election of RIOC Board nominees.

We know little as to what soon to be Governor David Paterson thinks about Roosevelt Island and the issues that concern us most including transportation concerns, privatization, among others. We voted for Paterson as part of a Spitzer / Paterson ticket. To my knowledge Lt. Governor Paterson only has step foot on Roosevelt Island once last May during a photo op with Mayor Bloomberg regarding the Verdant Power water turbine project in the East Channel of the East River behind Gristedes.

It is still way too early to know whether Roosevelt Island will be left alone or whether DHCR Van Amerongen will even be able to submit the elected slate of RIOC Board Nominees or how this new administration will look upon the various privatization efforts of the buildings here on Roosevelt Island. We will simply have to wait and see.

Will Southtown Include Affordable Housing?

The question regarding whether Southtown will include affordable housing is one that the NYS Division of Housing and Community Renewal and the Spitzer Administration has to face head on. To date the marketing of the existing four buildings has certainly been upscale and the prices to back that up. The issue of affordability has again been highlighted by the very public sale of 58 units to NYU on top of past building sales to Memorial Sloan Kettering and Weill Cornell Medical College. Nothing has been issued to indicate the next five would marketed any differently.

The General Development Plan requires 40% of the planned units offered to be affordable and occupied by low- and middle-income residents.

The question has now been raised in a direct letter, dated January 29, 2008, to DHC Commission Deborah Van Amerongen how the GDP requirement will be met and what the DHCR is doing to ensure it is. The letter is jointly signed by US. Representative Carolyn Maloney, State Senator Jose M. Serrano, Asseembly Member Micah Kellner, Manhattan Borough President Scott Stringer and City Council Member Jessica Lappin.

The question how will Hudson / Related the developers ensure that they meet the 40% requirement can have long lasting effects. When Northtown Phase 2 was constructed builders set aside, to my knowledge, all of 2 and 4 River Road to meet the affordability percentage requirements they were required to meet. Because these units were separated from the rest of Manhattan Park reports have been that the management and upkeep of these buildings have suffered. Will Hudson / Related do the same? Will the same result occur again.

It will be interesting to see how this develops, pardon the pun, and how the developers respond to the letter from our elected officials. On one hand the State had no trouble taking money for the Southtown development rights but will they now uphold the GDP as law as they are trying to do by keeping the remaining three WIRE buildings, in Mitchell-Lama, as affordable housing.

Rivercross Tenants Re-Take First Vote Today Towards Privatization

Today from 7:00 am through 8:30 pm this evening, Rivercross Tenants are being asked to take the first step towards Privatization of their cooperative building and to leave the Mitchell-Lama program. This vote is now the official first vote in the process after DHCR cancelled the earlier December 2007 “second” vote claiming the 1996 “first” vote was stale . The Coop Board is actively behind this vote and all signage distributed to tenants strongly urges a positive vote authorizing the Board to notify the DHCR that the building is taking the first steps towards investigating “privatization”.

There are tenants on both sides of the issue whether privatization is the right course for the building at this time. I will admit, as a Rivercross resident shareholder, I can see arguments on both sides and I will also admit but for the Mitchell-Lama status of the building I could not afford to buy into the building at FMV prices.



If the vote is positive the Board will begin the process to put together a business plan (the "black book") with all financial data as to how the conversion would be effected and how the building would be supported once it leaves Mitchell-Lama. A second vote is then required on this plan and this is what the Board states is the "real vote" as that vote would be to officially privatize or not. Tenants are fully aware that this process of even getting to the second vote is not a cheap one and the Board will incur substantial fees before such vote takes place. These costs are another issue of contention between the resident factions in the building.

Major issues to be addressed by the "Black Book" include coverage of the FMV tax equivalency bills which would now be imposed fully by the ESDC as well as the negotiation to extend the ground lease on the building which currently only extends out only 20 years.

ESDC / DHCR: No FMV Tax Bills if Continuation of Mitchell-Lama Status

According to RIOC President Steve Shane, the NYS Division of Housing and Community Renewal and the Empire State Development Corporation have jointly indicated that the Fair Market Value Tax Equivalency Bills issued earlier this Winter (to Westview, Island House, and Rivercross) will be rescinded so long as each building that received them stays within the Mitchell-Lama affordable housing program. Mr. Shane made this announcement informally following his attendance at the Community Board 8 Roosevelt Island Committee meeting held yesterday evening, January 22nd, at the Church of the Good Shepherd.

Once a building exits the Mitchell-Lama program the FMV bills will again be issued. Until that point each building would continue to be responsible for the subsidized tax equivalency bills they have been enjoying all these years. No word when each building is to be formally informed of this development, by either the DHCR or the ESDC, or if they already have been.

It is assumed that the Privatization Committee at Rivercross will continue to push for privatization as they had been prior to the ESDC FMV tax bill debacle claiming that knowing what the FMV tax bills will be gives them one more number for their exit calculations.

Rivercross Schedules 2nd Attempt at Privatization Vote

The Rivercross Tenants' Corporation has scheduled a new Privatization Vote for January 30, 2008 after its December 12, 2007 vote was cancelled by the DHCR. The rescheduled vote was announced to the Rivercross residents through a January 15, 2008 internal building memo.

DHCR claimed the Dec. 12th vote, which included votes by proxy, to be invalid. The Rivercross Board of Directors claimed that the proxy vote was valid as this was the second vote in a series that began in October 1996. DHCR invalidated the 2007 vote as reliance on the 1996 initial vote was stale.

The Privatization Committee has indicated that this vote is not the final vote but only one to authorize the committee to begin the paperwork to move forward towards privatization which does as part of the process notify DHCR of the building's intent. Once a "black book" is created which would be the final "plan" the residents would then post an actual vote on that plan. A percentage of Rivercross residents don't want to even begin this process based on their belief that all avenues have not been exhausted to solve the buildings financial needs without going the privatization route. The Main Street WIRE has covered the issues much more in depth than I can here and I encourage any reader to go the WIRE website to read the indepth coverage provided.

What I find interesting is the timing of the vote in light of DHCR Commissioner Van Amerongen's January 17th promise to get back to the Board within the week with information regarding the FMV ESDC tax bill which is in part pushing the Rivercross privatization process along. If the DHCR wants to be taken seriously the Commissioner better get back to Rivercross before the January 30th vote if the news is to have any impact on this rescheduled initial vote.

ESDC Update: DHCR’s VanAmerongen Promises Response Within Week

As previously reported the New York State Empire State Development Corporation issued FMV tax equivalency bills to the Westview, Island House and Rivercross buildings during the closing months of 2007.

On January 17, 2008 NYS Division of Housing and Community Renewal Commissioner Deborah VanAmerongen met with members of the Rivercross Board of Directors. Subsequent to that meeting, the Rivercross Board issued an update memo (under its resident apartment doors) to its shareholders stating that “the DHCR Commissioner has been “charged with resolving” the ESDC tax bill program”.

As per the Rivercross Board memo,VanAmerongen stated she would be in contact with the ESDC and was committed to getting Rivercross a response by next week. Presumably her efforts would also impact the bills issued also to Westview and Island House.

Roosevelt Island Residents: Spitzer Administration Screws Mitchell Lama Residents

Updated to remove photograph.

Printed in time for the Rivercross Tenants Association 30th Anniversary Party the Main Street WIRE published a one page special previewing this coming week’s issue (Saturday November 17, 2007) regarding the issuance of full value real estate tax equivalency bills to three of the four original Roosevelt Island Mitchell-Lama buildings. The poster was not an official editorial as the situation is fluid and the WIRE's official editorial will not be set until it is is formally published. See my previous two posts for more background.

The below image is of the poster taken late Sunday night as it dominates the internal Rivercross message board.



Most residents expect the politicians to work this out as the issuance of these bills does seem to run counter to the stated goals of ensuring affordable housing but it certainly does seem that the Spitzer administration does not have control of the state agencies charged with ensuring this goal is kept by sending out FMV tax bills. Not exactly a friendly way to gather support for buildings to stay in the Mitchell-Lama program. Expect this issue to dominate island news for a few weeks at a minimum.

In The Paper – Main Street Wire – Sat. Oct. 6, 2007

The headlines of tomorrow’s paper, available now online, linked HERE on line, are as follows:

> RIOC Has Four Tram Options, From $6 million to $21 million
> Inspector General Slams DHCR Work Under Pataki
> 15 Years On, Icla da Silva Foundation Looks Back to RI’s Love Thy Neighbor
> Lappin Gets City’s $1.5 Million for Southpoint Park

This issue also includes articles on Housing Trends by Robert Chira; a story about islander Leandra Ramm; and a recap of his past weekend’s Run for Congo Women.

RIOC / DHCR : "An Oasis in the Middle of the East River"

Click HERE to be taken to the RIOC video.