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05/23/08 Affairs and Appointments

05/23/08 Affairs and Appointments

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Related to the Rescue: MTA Inks New Agreement for Hudson Yards (This Time Getting a Deposit)

With roughly $1 billion in revenue at stake (and a $700 million shortfall in its capital budget), the Metropolitan Transportation Authority became increasingly willing to quicken its pace.

The MTA took over five months to decide among competing proposals for the right to develop and lease the 26-acre West Side known as the Hudson Rail Yards.  Having designated Tishman Speyer as the developer on March 26, it took less than two months for negotiations between Tishman and the MTA to collapse.  When the MTA refused Tishman’s request to defer lease payments until the western half of the size was rezoned (a process that could take up to three years), Tishman withdrew its $1 billion bid.

On the heels of Tishman’s exit, it took less than a week for the MTA to revive the Hudson Yards project by negotiating an agreement with The Related Companies – a runner-up to Tishman back in March.  Under the terms of the deal, Related will pay the MTA $1.045 billion for Hudson Yards development and leasing rites.

Making sure not to twice come up empty-handed (Tishman suffered no monetary loss for deciding to let Hudson Yards go), this time the MTA extracted an $11 million deposit from Related upon the signing of the contract.  A special meeting of the MTA Board approved the agreement with Related on Thursday morning.

With its financial partner Goldman Sachs, Related plans to build over the defunct rail yards a hotel, 5.5 million square feet of commercial space, 1 million square feet of retail, and 5.3 million square feet of residential space, including nearly 5,000 residences with approximately 2,000 units of rental housing.  Of the rental units to be built, 440 of them – over 20 percent – will be permanently affordable housing.

Other elements of Related’s mixed-use plan include:

  • Integration of the High Line, the lower West Side’s 1.45 mile elevated former freight railroad that is set to be transformed into a unique urban park
  • 15 acres of public space including a 9 acre park
  • Connectivity to the Hudson River park through a pedestrian bridge thatis elevated over the West Side Highway
  • A new civic plaza that will link three new intersecting parks – along the Hudson River waterfront, the Hudson Boulevard, and the High Line
  • A 120,000 square foot PS/ISschool on the High Line
  • A environmentalsustainability strategy that involves both LEED-designated buildings andother conservation strategies

Read here the MTA press release on its agreement with Related/Goldman Sachs

Read here Crain’s New York Business on Related’s plans for the Hudson Yards

Read here a New York Times profile of Gary J. Dellaverson, MTA’s chief financial officer and lead negotiator of the Hudson Yards agreement

St. Vincent’s and the Rudin Family Introduce Revised Design While St. Vincent’s Applies for Hardship Exemption on O’Toole Building

Saint Vincent Catholic Medical Center badly needs a new hospital – currently its medical facilities are inefficiently dispersed among eight separate buildings – but lacks sufficient funds for construction. 

To remedy this problem, it had sought to execute with the Rudin family what both sides regard as a mutually beneficial deal.  St. Vincent’s would sell to the Rudins eight buildings on the east side of Seventh Avenue between 12th and 13th streets, for $310 million.  The Rudins would demolish these buildings to clear space for a new residential tower and several town homes; St. Vincent’s would put the money it received from the Rudins toward construction of a new $835 million, 21-story hospital on the site where the O’Toole building currently stands.

As St. Vincent’s buildings sit within a historic district, the planned demolitions require the approval of the New York City Landmarks Preservation Commission (LPC).  Earlier this month LPC dashed the St. Vincent’s/Rudin proposal when the commissioners unanimously rejected demolition of the O’Toole building, citing it as an important example of modern architecture.  Some commissioners also objected to elements of the Rudin design plan for residential development.

Though the LPC ruling presents a major challenge, this week St. Vincent’s and the Rudin family took steps intended to keep their project moving forward.  St. Vincent’s filed with LPC a “hardship application” meant to show that demolition of the O’Toole building is critical to enabling St. Vincent’s to carry out its charitable mission of providing medical treatment. 

Though LPC has not granted a hardship exemption since 1986, at a public meeting Monday night with members of Community Board 2 representatives of St. Vincent’s expressed confidence that they could demonstrate why a new hospital building was essential for St. Vincent’s, why the O’Toole building site is the only reasonable location for such a facility, and why preservation of the O’Toole building is incompatible with construction of a modern hospital.

On another front, the St. Vincent’s and the Rudin family released new design plans that respond to comments from LPC.  The new proposal would preserve four buildings within the historic district that had been slated for demolition; it would also significantly decrease the height and bulk of the planned residential tower.  Specific of the revised St.Vincent’s/Rudin design plan include:

  • The preservation, renovation and adaptive reuse of four buildings East of Seventh Avenue and within the existing St. Vincent’s campus (Nurses, Raskob, Smith, Spellman)
  • A reduction of 30 feet in height and 60 feet in width of the main residential building slated for 7th Avenue between 11th and 12th Streets; these changes will diminish the width of the building by nearly a third
  • A reduction of 9 percent on the height of the proposed hospital, bringing the total height (including mechanical installations) below 300 feet; also a reduction in the width of the tower by 53 feet

Public discussion of St. Vincent’s hardship application and of the Rudin family’s revised design will begin at an LPC meeting on June 3.

Read New York Sun coverage of the new design plan here

Read Crain’s New York Business coverage of the St. Vincent’s hardship application here

IBO Sunnier than Administration on New York City’s Near-Term Fiscal Health

This week New York City’s Independent Budget Office (IBO) released a Fiscal Brief on the Mayor’s Executive Budget for 2009.  The report contained plenty of bad news – IBO predicts that a local recession is imminent or already here (sparked by $11.3 billion in losses for the financial services sector), that New York City’s economy will contract for longer than the rest of the country (with recovery not occurring until the second half of 2009), and that the City will lose 59,400 jobs and nearly $2 billion over the coming fiscal year.

All this notwithstanding, the core conclusion of the report was optimistic: contrary to the Mayor’s Executive Budget, IBO forecasts no budget shortfalls in 2009 and 2010.

As to the reasons why the City will sustain fiscal health throughout a local economic downturn, IBO listed four:

  • A projected current year fiscal surplus of $4.6 billion, which will be sufficient to help cover underlying shortfalls in 2009, as well as in 2010 and 2011
  • Mayor Bloomberg’s proposed annual spending reductions of more than $1 billion
  • Early retirement of debt, specially the decision to devote a portion of resources – over and above reported surpluses – from last year and this year to reduce the City’s debt burden
  • IBO’s projection of tax revenues for 2010 exceeds the Mayor’s projection by $1.2 billion

Tallying all this up, IBO expects the City budget to remain in balance throughout 2010.  The period after 2010, however, is more precarious.  Despite expecting by then “a moderate local economic recovery and modest growth in tax revenues,” IBO warns that post-2010 spending will rise much faster than revenues, with no sizable surplus to close the gap.  IBO expects the divergence between expenditures and revenues to produce a budget shortfall of $3.3 billion in 2011 and nearly $4.3 billion in 2012.  The 2011 shortfall would equal 6.9 percent of City-funded revenues; the 2012 shortfall, 8.7 percent.

Being responsible economists, IBO lists a number of developments that could scuttle its projection of balanced budgets in 2009 and 2010.  Among those mentioned are:

  • A local recession whose depth and duration exceed IBO forecasts, causing tax revenues to dip below projections
  • Municipal wage growth: labor settlements whose wage increases exceed the 4 percent increases budgeted for the current round of contract negotiations
  • Extension of the property tax rate cut: if the Mayor and City Council choose to keep all or part of the 2006 property tax rate cut in place for 2010 or beyond, this would cost the City as much as $1.3 billion annually

Read here IBO’s Fiscal Brief on Mayor Bloomberg’s Executive Budget for 2009

Read here the IBO report’s supplementary budget projection tables

Speaker Christine Quinn Discusses Education and Mayoral Control of Schools

Read City Council Speaker Christine Quinn’s speech to a Crain’s Breakfast Forum here

Read the Council’s press release here

Read Crain’s New York Business coverage of the event here

Food Charities Facing Trouble as Donations Plummet

Supermarkets, food manufacturers and wholesalers are giving less to the Food Bank for New York City. Donations are expected to decline 44% in fiscal year 2008.

Read the rest of the Crain’s New York Business article on food charity shortages here

Governor Paterson Hospitalized, Diagnosed with Acute Glaucoma in Left Eye, Released Same Day

Suffering from migraine-like symptoms, early Tuesday morning Governor David Paterson asked to be brought to The Mount Sinai Medical Center for an evaluation.  A battery of tests eventually revealed the Governor to have acute glaucoma in his left eye.  Governor Paterson then underwent an iridotomy – a routine laser procedure to reduce pressure in the eye. 

The procedure went smoothly and Governor Paterson left Mount Sinai late Tuesday afternoon.  The iridotomy is not expected to have any long-term impact on the Governor’s health.

Read Governor Paterson’s press releases on his visit here and here

Read a New York Times account of Governor Paterson’s hospital visit here

It Takes a Village to…. Pay for College: Governor Paterson Signs Bill Enabling Third Parties to Contribute to College Savings Funds

Rising college tuition costs over the past decade have prompted many states to offer tax incentives designed to help parents save for their children’s higher education.  The New York State College Choice Tuition Savings Program, for example, enables New York State residents to make tax-deductible contributions to special savings accounts (called 529s); withdrawals from 529s for qualified education expenses are tax-free.   Since the program’s inception in 1998, the number of 529s has expanded to 600,000; tax benefits from these accounts have helped New Yorkers save $8.3 billion in tuition expenses.

In the initial law, however, 529s had one provision which seriously limited their potential use in boosting savings for college: only the person who opened the account – usually a parent – could make tax-deductible contributions.  The narrowness of the tax-benefit meant that in the past five years, 529 college savings accounts have had to reject over $57 million in potential contributions because they were submitted by someone other than the account owner.

This week Governor Paterson signed legislation to change this provision, enabling any third party – be they a relative, employer, or other – to contribute to State-sponsored college savings accounts.  Updating New York’s law to more closely resemble that in other states, the removal of the ban on third-party contributions will presumably greatly increase the amounts put into 529s.

Read Governor Paterson’s press release on the college-savings legislation here

Bill Goldstein has resigned as Deputy Executive Director of the Port Authority

Bill Goldstein has resigned as Deputy Executive Director of the Port Authority. As Deputy Executive Director, Mr. Goldstein had overseen all of the Port’s capital projects. He had been in the post since 2003.

Schedule of Hearings in the New York City Council for the Week of May 23

Finance; Education David I. Weprin, Robert Jackson, Chairs
Tuesday, May 27, 9:30 AM
Council Chambers – City Hall
Details: 9:30 – 11:30 Education (Expense)

Finance; Health Joel Rivera, David I. Weprin, Chairs
Tuesday, May 27, 11:30 AM
Council Chambers – City Hall
Details: 11:30 – 12:30 Health and Hospitals Corporation (Capital) 12:30 – 2:30 Health & Mental Hygiene

Finance; Mental Health, Mental Retardation, Alcoholism, Drug Abuse & Disability Services G. Oliver Koppell, David I. Weprin, Chairs
Tuesday, May 27, 2:30 PM
Council Chambers – City Hall
Details: 2:30 – 4:00 Health & Mental Hygiene and Health & Hospitals (Mental Health, Mental Retardation & Alcoholism Services Issues) 4:00 Public

Rules, Privileges & Elections Diana Reyna, Chair
Wednesday, May 28, 10:30 AM
Council Chambers – City Hall
Details: M 991 – Communication from the Mayor – Submitting the name of Glenn Newman to the Council for its advice and consent regarding his reappointment as President of the New York City Tax Commission, Pursuant to Sections 31 and 153 of the City Charter. M 992 – Communication from the Mayor – Submitting the name of Aladar Gyimesi to the Council for its advice and consent regarding his reappointment to the New York City Tax Commission, Pursuant to Sections 31 and 153 of the City Charter. M 993 – Communication from the Mayor – Submitting the name of Alice Olick to the Council for its advice and consent regarding her reappointment to the New York City Tax Commission, Pursuant to Sections 31 and 153 of the City Charter. Preconsidered M____, Dennis deLeon, a candidate for re-designation by the Council to the Civilian Complaint Review Board, pursuant to § 440(b)(1) of the New York City Charter. Preconsidered Res____ – Resolution approving membership changes to certain committees and a subcommittee, the addition of a new committee, Chair and membership and allowance. AND SUCH OTHER BUSINESS AS MAY BE NECESSARY

Fire & Criminal Justice Services * Addition Miguel Martinez, Chair
Wednesday, May 28, 10:30 AM
Committee Room – City Hall
Details: Proposed Int 732-A – By Council Members Martinez, Stewart and Dickens (by request of the Mayor) – A Local Law to amend the New York city charter and administrative code of the city of New York, in relation to enacting the New York city fire code, and repealing subdivisions (7) through (19) of section 15-232 and chapter 4 of title 27 of the administrative code, relating to the New York city fire prevention code. Preconsidered Res____ – By Council Member Martinez – Resolution finding that the enactment of Proposed Int. No. 732-A does not have a significant adverse impact on the environment and is consistent with the state environmental quality review act.

Finance David I. Weprin, Chair
Wednesday, May 28, 11:00 AM
Committee Room – City Hall
Details: Int 724 – By Council Members Weprin, Gonzalez, James, de Blasio and Yassky (by request of the Mayor) – A Local Law to amend the administrative code of the city of New York, in relation to the establishment of the Park Slope Fifth Avenue business improvement district. L.U. 755 – By Council Member Weprin – Article XI tax Exemption, Lafayette Morrison Apartments, 820 & 880 Boynton Avenue, 825 & 875 Morrison Avenue, Block 3627, Lots 40, 50, 30 and 20, Bronx, Council District No. 18 AND SUCH OTHER BUSINESS AS MAY BE NECESSARY

Stated Council Meeting
Wednesday, May 28, 1:30 PM
Committee Room – City Hall

Housing & Buildings; Task Force on Operations and Improvement of the Department of Buildings; Finance David I. Weprin, Erik Martin Dilan, James S. Oddo, Chairs
Thursday, May 29, 10:00 AM
Council Chambers – City Hall
Details: 10:00 – 10:45 NYCHA 10:45 – 11:15 Housing Preservation & Development (Expense) 11:15 – 12:15 Housing Preservation & Development (Capital) 12:15 – 1:15 Buildings

Finance; Cultural Affairs, Libraries & International Intergroup Relations; Libraries David I. Weprin, Domenic M. Recchia, Jr., Vincent J. Gentile, Chairs
Thursday, May 29, 1:15 PM
Council Chambers – City Hall
Details: 1:15 – 2:45 Libraries 2:45 – 4:00 Cultural Affairs 4:00 Public

Contracts; Finance David I. Weprin, Letitia James, Chairs
Friday, May 30, 11:30 AM
Council Chambers – City Hall
Details: 11:30 – 1:15 Office of Management & Budget – Overview of Budgets – Revenue, Expense, Capital & Miscellaneous Budgets, including Debt Service & Pension appropriations 1:15 – 1:45 OMB – Contracts Budget 1:45 – 2:45 Design & Construction 2:45 – 3:15 Comptroller 3:15 – 3:45 Independent Budget Office 3:45 Public

Capalino+Company is hiring!Executive Assistant – Land Use, Housing and Real Estate