Monday, February 8, 2010

RIOC Real Estate Committee Meeting Today On Roosevelt Island Main Street Retail & Ground Lease Extension For Mitchell Lama Buildings Privatization

Main Street Image Of Roosevelt Island Is The Village From Glark

A reader of this post on the good bread sold at the Roosevelt Island Farmers Market commented:
BTW, I liked the bread and think we should have a bakery here. maybe sometime soon.
and another asked:
I thought getting new stores here was now in the laps of the RIOC Board Members.... Can someone ask them what's being done to fill the storefronts?
We may be getting some answers soon regarding the deploring condition of Roosevelt Island's Main Street retail situation. Later today, the Roosevelt Island Board of Directors Real Estate Development committee will be meeting and one of the items on the Agenda is an update on the Main Street Master Leaseholder status..
PLEASE TAKE NOTICE that a meeting of the Real Estate Development Advisory Committee of the RIOC Board of Directors will be held on Monday, February 8, 2010 at 6:00 p.m. at the RIOC administrative office, 591 Main Street, Roosevelt Island, New York. The Committee will meet to:

discuss ground lease extensions for the Mitchell-Lama projects in the context of privatization plans; and

receive an update on the Main Street master lease RFP initiative.
During the December 2009 RIOC Board Meeting, the Real Estate Development Committee reported (From the Minutes of RIOC's December Meeting Page 9):

...Mr. Kalkin noted that the Committee met on November 20, 2009 to discuss the draft of the appraisal of the Main Street commercial spaces that was prepared by Liberty Appraisal Services. Mr. Kalkin stated that the Committee agreed to go ahead with an RFP for the retail master lease, and today the Board voted to hire Jones Lang to provide necessary consulting services and draft the RFP. Mr. Kalkin also noted that the Committee decided not to extend the hardware store lease, but rather to offer the current tenant a month-to-month tenancy, so as to allow it to pay its arrears and continue operating the business until an alternative arrangement is set in place....
More Roosevelt Island Main Street retail real estate news from the minutes of December 2009 board meeting (page 10):
... Mr. Shane noted that the hardware store’s lease had expired as of November 30, 2009. Per the Real Estate Development Advisory Committee’s directive, RIOC will seek to offer the tenant Liberty of Roosevelt Island Corp. a month-to-month tenancy with a requirement to vacate the premises upon the expiration of a 30-day period after appropriate notice is given by RIOC. For the time being, the tenant will pay $3,400 per month, along with the additional $100 per month as amortization of its arrears until the entire sum of $2,400 is paid...
Here's some additional information on Main Street Master Leaseholder concept and the Roosevelt Island Main Street Retail Study.

On the Ground Lease extension for Roosevelt Island's Mitchell Lama Buildings, the December 2009 minutes also reveal (Page 4)
...The second item of new business was the authorization to enter into an amendment of the real estate consulting services contract with Jones Lang LaSalle Americas, Inc.

Mr. Shane reminded the Board that RIOC has an agreement with Jones Lang LaSalle Americas, Inc. (“Jones Lang”) with respect to real estate consulting on Roosevelt Island. He provided a brief history of Jones Lang’s consulting services for the Corporation. Mr. Shane mentioned that according to the agreement, Jones Lang’s compensation was comprised of a monthly stipend and commission. He then noted that the Jones Lang agreement has been tolled for the last two-and-a-half years.

Mr. Shane stated that the Island House, Rivercross and Westview projects are currently seeking to extend their ground leases and withdraw from the State’s Mitchell-Lama program. Mr. Shane further noted that DHCR worked out a formula for building conversion, which meets DHCR standards for long-term affordability. However, according to Mr. Shane, given the complexity of the Mitchell-Lama withdrawal process and the diverse scenarios that may ensue, RIOC would need a consultant to provide economic modeling and formulas to make appropriate assessments of the financial consequences of such withdrawal. Given the intricacy of these transactions, the assessments would be crucial in several matters, including RIOC’s negotiations with the ESDC regarding tax equivalent payments, the City of New York regarding diminution of tax abatement, as well as in ensuring that the conversions do not create a windfall for the project owners...
The resolution authorizing the hiring of Jones Lang as a real estatae consultant passed (Page 6):
... RIOC is hereby authorized to negotiate and enter into an amendment of the Contract with Jones Lang to eliminate the prior brokerage arrangement and to engage Jones Lang to furnish financial and leasing advisory services on an hourly basis in connection with the Rivercross, Island House and Westview negotiations, the Main Street retail/commercial space master lease initiative and such other related matters on as needed basis, upon such terms and conditions substantially similar to those outlined in the Memorandum from Stephen H. Shane to RIOC Board of Directors dated November 24, 2009, attached hereto;
A webcast of the February 8 Real Estate Development Committee will be available a few days later. Audio Cast of the meeting is now available.