More Details On Roosevelt Island's Island House Privatization Exit From Mitchell Lama Program and Affordability Plan - Tenants Can Buy Apartment at 65% Market Discount Or Continue Under Rent Stabilization Like System - Unknown About Current Wait List

Image of Roosevelt Island's Island House Entrance

Reported last week on Roosevelt Island's Island House residents ongoing privatization efforts that are about to result in the building exiting the Mitchell Lama program.

... It looks like Roosevelt Island's Island House is about to exit the NY State Mitchell Lama program under an affordability plan agreed to by the Owner (David Hirschhorn), Residents and NY State....

Roosevelt Island's Assembly Member Micah Kellner provides some additional details on Island House Privatization with this Press Release:

“The Island House Affordability Plan signifies the next generation of affordable housing on Roosevelt Island and it should be used as a template for other Mitchell-Lama conversions throughout New York State,” said the Assembly Member. “This deal ensures affordability for all Island House residents and I am proud to have played a vital role in making it a reality. I will sleep well at night knowing that tenants will be able to keep their apartments – whether they own or rent – for years to come.”

“Our focus throughout this long process has been on maximizing affordability and protection for every tenant so that any tenant who wishes to stay in Island House, either as a buyer or renter, would be able do so,” said Graham Cannon, Chairman of the Island House Tenants Association. “We are delighted with this outcome. This is a very important breakthrough for the tenants of Island House. I especially recognize the efforts of our elected officials – especially Assembly Member Kellner and Councilmember Jessica Lappin – who played such a critical role in moving this forward.”

“The Affordability Plan is the culmination of many years of hard work among all of the stakeholders and was made possible only through the willingness of those involved to work cooperatively toward achieving a delicate balance among competing interests,” said David Hirschhorn, the General Partner of the ownership group.

The plan provides the following:

• Island House residents will be able to purchase their apartments at a discount of approximately 65% off of the market price.
• For those Island House residents who do not wish to purchase their apartments, they may remain as tenants for the next 30 years and will be protected under a rent stabilization- like program.
• The Division of Housing and Community Renewal (DHCR) will continue to supervise the property to insure that the terms of the Affordability Plan are adhered to.
• Owner contributes $9.6MM to building improvements and reserves
• Owner pays $4,500,000 in transfer fees to RIOC
• Tax Equivalency Payments for affordable units remain low during the 30 year affordability period and thereafter phase into a market level tax payment
• During the 30 year affordability period, Island House residents (and future owners) may resell their apartments but are limited to the amount they can charge and are required to pay a significant portion of their profit back to the building, as well as a 1% fee to RIOC
• Roosevelt Island Operating Corporation (RIOC) will receive substantial additional ground rents upon the expiration of the affordability period.

Under the Public Authorities Law, a 90 day notice letter was filed by RIOC on April 27, 2012. The closing of the Affordability Plan is scheduled for July 31, 2012.

The offering portion of the deal must still be submitted to the Office of the New York State Attorney General for acceptance of the cooperative offering plan.

More information on the Island House privatization as well as RIOC's 90 day notice letter available at prior post. I have asked RIOC to comment on the plan but have not received a response. Questions regarding the Island House privatization and  affordability plan remain including from this reader:

What will this mean for those not currently residents of Island House but interested in moving there?  Will the current wait list for rentals be converted to a waitlist to purchase, or will be there a new mechanism for filling future vacancies?