RIOC Proposed Fiscal Year 2010 -11 Budget For Roosevelt Island - What Happens If Southtown Riverwalk Buildings 7 -9 Don't Get Built Or On Time?

Proposed RIOC Budget FY 2011

Above is RIOC's proposed fiscal year 2010-11 budget for Roosevelt Island. It is also posted on RIOC's web site.

Among the assumptions are:

• Projected Cash Flow has been extended out to year 2025 (15 years) as opposed to 5 years in past budgets.
• Salaries Budgeted for 2011 included a 3% COLA increase for non-union employees but is highly unlikely to be paid due to the State's financial condition.
• Budget Risks (page 8) addresses the financial effect on Projected Cash Flow if Southtown 7,8 & 9 does not go forward.

Regarding Southtown Buildings 7 - 9, RIOC's proposed FY 2010-11 states (Page 9):

Southtown 7, 8, and 9:
In 2006, the Southtown developers exersized an option at a cost of $2,000,000 to extend the Construction Commencement Date for all buildings of Southtown 5–9 from no later than December 31, 2010 to December 31, 2012. Management believes that given current market conditions there is a possibility that the development of Southtown 7, 8, and 9 may not happen, negatively affecting projected cash reserves. Below is the effect on projected cash reserves, if the development of Southtown 7, 8, and 9 were not to go forward. It is management's belief that if Southtown 7, 8, and 9 were to not proceed in the time period, there would be other subsequent development opportunities after the economic downturn cycle reverses its course.

For further information on RIOC's Proposed Budget, take a look at the webcast of RIOC's December 3 Audit Committee meeting in which RIOC CFO Steve Chironis briefed the Directors on subject. RIOC webcasts generally remain available on their site for only a month after taking place.

Let me know if you see anything interesting in budget.

UPDATE 1/1/10-From RIOC:

The Proposed Budget FY 2011 was modified to reflect an increase in actual percentage rent from Manhattan Park, which is greater than the estimates made in the original Proposed Budget FY 2011. Manhattan Park provided the actual percentage rent information subsequent to the distribution of the original Proposed Budget FY 2011.

The modified budget is here.