Tuesday, October 23, 2007

Roosevel Island Raquet Club Follow Up





A reader sent in this copy of the Memorandum in support of the Third Lease Modification for the Roosevelt Island Racquet Club that was approved during the October 18, 2007 RIOC Board of Directors meeting. The memorandum was written by RIOC President Shane to the RIOC Board's Real Estate Committee. To read the memo, click on that portion of the page you wish to read and it will open to a larger page. A letter in support of the proposal by a Roosevelt Island resident that was included in this package to the Real Estate Committee is posted here.

Here is a link to the webcast of the Board meeting. The first item on the agenda, approximately the first 2 hours of the meeting, deal with the Roosevelt Island Tram. The next item focuses on the proposed Tennis club license. Note that there is virtually no discussion of any of the questions posed in this earlier post nor were they answered in response to the original inquiry:

How does the license fee for the Roosevelt Island Racquet Club compare to other similarly situated clubs in New York City? Is it comparable in terms of fees and term? Is it even a relevant question?

Since the current license term extends through 2031 why does it have to be extended for an additional 15 years? The waiver of any potential liability for tram discontinuance does not seem reason enough to justify such an extension. After all there have been previous occasions when the tram was out of service and to my knowledge no such liability occurred. The willingness of the Tennis club owner to spend additional sums on a market study to determine the potential of a business opportunity for themselves hardly seems reason for RIOC to extend the license term either. Please explain what benefit does RIOC receive in exchange for the additional 15 year term?

Why does the Public Authorities Act not apply to such a large space as the Tennis Club with a license term extending to the year 2048. These premises are not the small shops on Main Street where applying the Public Authorities Law makes no sense.
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How many Roosevelt Island residents are members of the club, either adult or children? What is the discount rate for Roosevelt Island residents and for how long has that been in effect?

Eventually, if an RFP is issued for the Sportspark facility and a bidder other than the current tennis club operator wins the RFP, under the terms of the proposed license modification, what exactly does that bidder have to pay the tennis club operator. I watched the webcast of the real estate committee meeting and am unclear in the event that another bidder wins the RFP what you meant by the winning bidder having to pay the tennis club for it's "going business value". Do you mean merely the value of the current tennis club or do you mean to include the potential value of a new "Chelsea Pier" type complex at the combined Sportspark/tennis facility. If you mean the potential value of the new facility that would put a competing bidder at a severe and unfair disadvantage in any bidding process.
One member of the Board did ask Mr. Shane about this 1991 NY Times article which said of the Roosevelt Island Racquet Club:
lease payments to the state will be set at a minimum of $100,000 a year and should increase after five years to over $400,000; the club will then pay a percentage of its revenues to the state.
Mr. Shane questioned the accuracy of this report and did not elaborate any further. As this reader points out:
In '91 rent should be $100.000, five years later over $400.000, and 16 years later it should be more, much more, than over $250.000
Something is fishy...
Perhaps subsequent modifications reduced the license fee. We don't know, but questions should still be asked. No other critical, much less challenging, questions were asked by the Board members as to whether the tennis facility is the only recreational, cultural or public use facility possible for this location or whether they are indeed good neighbors to the Roosevelt Island community.

I continue to ask, Why increase the License term for an additional 15 year term without Roosevelt Island receiving anything in return? All the increased license term does is increase the value of the Tennis facility and makes it more expensive for any other potential user. How does that help RIOC or the Roosevelt Island residents? It certainly helps the tennis facility. What a shame!

3 comments :

Anonymous said...

530 members of tennis club.
34 RI residents! Or about 6.415%.

Tonny said...

70,000 sf Tennis bubble - for $225.000? Good job!

Mario said...

What about Sports park +40.000 sqf?
Is this space (gym & pool) now included in that "licence"?