ESDC Approves $15M Grant to Modernize Tram

As expected the ESDC approved a $15 million grant to modernize the Roosevelt Island Tram. This grant was a formality as the funds were already budgeted for this purpose. The complete of the press release is as follows:

7/17/2008

ESDC BOARD APPROVES $17.6 MILLION IN DOWNSTATE GRANTS

Empire State Development Corporation's Board of Directors met today in Manhattan and approved downstate grants totaling $17.6 million. Among the grants approved was $15 million to help modernize the Roosevelt Islandtram. The tram will contribute to the economic impact of Roosevelt Islandby ensuring a reliable form of transportation for residents to travel backand forth to the city.

The Roosevelt Island tram began operating in 1976. There are 20 other trams operating in the U.S. and Canada but the Roosevelt Island tram is the only aerial commuter tram in the country. Originally built as a temporary means of transportation for island residents by New York State's Urban Development Corporation, it has become a permanent part of the lifeof the island and a treasure for New Yorkers and visitors throughout the world.

Empire State Devel Corp. Formally Votes to Postpone Roosevelt Island Tax Equiv. Bill Increases

The Empire State Development Corporation formally voted Thursday, February 21, 2008, to authorize postponement of Tax Equivalency Payment increases for North Town Phase II Houses, Inc. and North Town Phase III Houses, Inc. on Roosevelt Island, which currently have Ground Leases with the New York State Urban Development Corporation.

It's always comforting when you finally see this type of information formally voted and passed. Although I am unsure why the vote took so long to occur after the ESDC and the DHCR formally announced this same decision at the end of last month.

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.

Assembly Member Kellner Confirms ESDC FMV Real Estate Tax Bills Rescinded

In a press release issued today Assembly Member Micah Z. Kellner (65th AD) confirms that ESDC Chairman Patrick Foye has rescinded the FMV real estate tax equivalency bills issued to Island House, Rivercross and Westview.

ESDC's decision puts a greater burden now on the Rivercross Privatization Committee as that buildings anti-privatization tenants will claim that the state no longer has a loaded gun to their heads and other avenues might be worthy of exploration regarding securing financing for capital projects and other issues. Pro-privatization tenants will still argue that the building has a right to leave the Mitchell-Lama program and that they expect that their plan is worthy of exploration which is all the upcoming vote is really for next week. But even such exploration has a price and it is expected to cost a few hundred thousand dollars to go through such a process.

A few excerpts of the Assembly Member's press release are as follows:

"ESDC has decided to rescind the tax bills sent last September to Westview, Island House, and Rivercross and to continue to allow the buildings to receive their tax exemptions as long as they remain in the Mitchell-Lama program. I’m glad to see, after six months of playing keystones cops, that the administration has finally come to its senses and rescinded this unfair tax bill."

“I could never understand how the administration could argue that threatening to raise taxes was an appropriate tactic to bullying struggling tenants and shareholders into remaining in the Mitchell-Lama program. This was a dangerous game of chicken that could have gone horribly wrong, costing thousands of families their homes."

“Let’s not kid ourselves, this issue is far from settled and the devil is always in the details. As we go forward I will continue to monitor the situation to ensure that the ground lease amendments are negotiated in such a way such that retroactive, unfair taxes are never again a possibility that looms over the heads of Islanders.”

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.

State Senator Serrano Posts Roosevelt Island Office Hours

State Senator Serrano has posted office hours he or his staff will be available at the RIOC offices this week. According to the flyer posted on the kiosk along Main Street office hours will be between 2pm and 6pm at 591 Main Street on the ground floor. Double click the above image to enlarge.

Residents are encouraged to bring whatever paperwork they require that they want to discuss with the Senator. This is a great opportunity for residents concerned about the recent ESDC tax bills to ask the Senator and his office what the current status is of these bills and what he and our other elected officials are doing about this issue.

Could the City Reclaim or Threaten to Reclaim Roosevelt Island to Force the ESDC to Withdraw FMV Tax Bills?

This afternoon it was announced that New York City has reclaimed South Brother Island and that it will probably be left untouched as a sanctuary for birds and other wildlife that live there. Could New York City reclaim its title to another island in the East River and remove the fears of its residents that Empire State Developement Corporation FMV tax equivalency bills will destroy their homes?

With the issuance of full value bills for tax equivalency payments issued to three of Roosevelt Island’s four Mitchell-Lama properties could New York City reclaim Roosevelt Island citing the destruction of affordable housing as a reason to break its lease of the Island to New York State?

Certainly there are too many other factors involved which would prevent this from happening including the transition of services currently provided by RIOC to the equivalent City agencies.

But if the Island was no longer under State control than perhaps the 2005 City Council Resolution (#388) extending Mitchell-Lama tax benefits 50 years would apply as then the buildings would owe actual taxes and not “payments in lieu of taxes” which seems to be part of the current controversy whether the state intended to give the City Council the ability to affect taxes other than payments intended to go to City coffers.

Eventually when the current State-City lease runs out the fact is the Island will revert to City control and by that time it is expected each Mitchell-Lama property will have successfully exited the program. In the mean time can the City put a little pressure on Albany and remind them that the landlord does not like it when its tenant, NYS, is scarring its subtenants. Can NYC as landlord remind NYS that ultimately it holds jurisdiction over the Island and that to impose the FMV ESDC tax bills in some form violates that jurisdiction when their issuance is contrary to the well being of those residents?

In The Paper – The Main Street WIRE – 11/17/2007

> NYS Threatens Huge Tax Hikes for Island’s Mitchell Lamas
> Student, Pushed Hard, and Teacher Find Rapport in Chords on Steel Strings

Saturday’s WIRE is already available on-line and worth downloading immediately. The WIRE article regarding the full value tax bills issued by the Empire State Development Corporation is required reading as Roosevelt Island residents are not going to learn what is going on in any other forum in such depth. Until residents start understanding the issues and know all the facts and making noise the Spitzer administration will do what it wants with us. Read the article even if its length scares you.

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.

Roosevelt Island Mitchell-Lama Buildings Receive FMV Tax Equivalency Bills from State Despite City Resolution Extending Exemptions

This week just prior to its 30th anniversary the Rivercross Building on Roosevelt Island received a tax equivalency bill from the Empire State Development Corporation which could potentially increase monthly costs to each tenant by 45%. In addition to the Rivercross building both the Island House and the Westview buildings received similar tax equivalency bills. Such increases would destroy the affordability of these buildings to many of their tenants especially those on fixed incomes.

According to a flyer posted in its lobby, the Rivercross Board of Directors announced that if the tax bill stands it could force maintenance charges to increase by approximately 45% to cover this added cost to their building. Of the four original Mitchell-Lama buildings Rivercross is the only co-op building.

The ground lease issued to the Rivercross building provided that payments in lieu of real estate taxes would extend through 2007 the thirtieth anniversary of the issuance of the building’s certificate of occupancy. The ESDC is the successor in interest to the NYS Urban Development Corporation.

The tax bill received by Rivercross this week stated that the 30 year period had ended and that effective September 15, 2007, the buildings tax equivalency payments were increased to approximately $3.6 million per year.

The New York City Council in 2005 had passed Resolution 388-A granting real property tax exemptions for an additional 50 year period to private housing companies, including Mitchell-Lama buildings. According to the Rivercross flyer the list of applicable housing companies attached to the resolution included Rivercross. The resolution linked to here does not include that list. There had been some concern whether the City resolution applied to the Roosevelt Island buildings but in each building’s case local politician assured the buildings that as long as they stayed in the Mitchell-Lama program the resolution would be applicable to them and protect their tax status.

As reported in the most recent issue of the Main Street Wire, the Rivercross building announced its intent to formally notify the DHCR that it intended to leave the Mitchell-Lama program but no such filings have been made to date. As of today Rivercross still exists as a Mitchell-Lama property.