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Wednesday, January 9, 2013

Roosevelt Island Residents Meet With NY State Governor Cuomo's Secretary Larry Schwartz - Discuss Democracy, RIOC Board Elections And Appointment Of Non Residents To The Board

On the Friday before Christmas, December 21, I learned of a meeting scheduled that day between Larry Schwartz, Secretary to NY State Governor Andrew Cuomo, and certain residents of the Roosevelt Island community.  I asked to attend the meeting and was told it was closed to the press. Since that meeting, I have been seeking comment about what was discussed and was told a statement would be made available after the holidays.

Yesterday, I received the following statements from former Roosevelt Island Residents Association (RIRA) President Matt Katz who was one of the attendees at the meeting. From Mr. Katz:
This report to the community of the December 21 meeting with Lawrence Schwartz has waited a long time to be shared with you, and we apologize for that. A statement that would be inclusive of the material discussed but sensitive to the provisos stipulated by Mr. Schwartz and the other State officials attending the meeting took us some time to draft. In addition, and as a courtesy to the officials who agreed to meet with us, we offered the attached report to Schwartz’s office with today as a deadline for comments. Having received none, we are pleased to offer this account, which follows twenty months of work since the appointment of a non-resident to the RIOC Board of Directors and a year of work mounting two Board elections.
To the Community:

Since the February 2012 RIOC Board election, a small group of Islanders has been steadily following up about appointment of the nominees with Assembly Member Micah Kellner and State Senator Jose Serrano, and pressing for a meeting with Governor Andrew Cuomo or his staff in order to explain the importance and context of the elections. (The effort to engage with gubernatorial staff via these elected representatives dates from the June 2011 formation of The Democracy Team, following Cuomo’s appointment of unelected non-resident Salvatore Ferrera to the Board.)

As reported both on the Roosevelt Islander blog (October 26, 2012) and in The Main Street WIRE (November 3, 2012), there was a special meeting of the RIOC Board on October 25, 2012, with Lawrence Schwartz, Secretary to Governor Cuomo, at which Schwartz promised to work more closely with the Board and with residents. This small group of Islanders attended the public session of that meeting. Then-President of RIRA Matthew Katz gave Schwartz his card, and said that he would follow up to request a meeting with him. When contacted, Schwartz's office responded that he would meet with the group, and it was arranged for December 21, 2012, at New York State premises in Manhattan.

In order to provide background for the meeting -- whose purpose was to discuss the two elections that RIRA mounted in 2012 to fill seats on the RIOC Board of Directors -- we, the undersigned Island attendees, sent a two-page briefing document in advance (copy available from It consisted of an historical timeline of the Island’s efforts to attain representative local democracy, and an updated version of the related goals that had been provided to Kellner and Serrano by The Democracy Team in July 2011: restoration of the Island’s electoral precedent; documented agreement to the goals; regularization of the expiration dates of Board terms; and, ultimately, legislation providing that all seven public RIOC Board members be Roosevelt Island residents elected by the community.

At the December 21 meeting, attended by several other NYS staff, we were pleased to learn that the State recognizes the responsibility that residents were given in earlier administrations to act as a “search committee" for gubernatorial appointments to the Board. They also recognize that the June 2011 appointment of a non-resident to the Board was seen by the community as a setback to the objective of “a government .... deriving their just powers from the consent of the governed” (per the Declaration of Independence) that would give residents more inclusion in decision-making. Schwartz noted that Board appointees must satisfy the fiduciary responsibilities imposed upon them by statute, and we noted that the residents elected to serve on the Board are all professional people, all dedicated to serving this community to the best of their abilities, and all carefully vetted by the State prior to appointment. He agreed that the Island’s elected nominees would be considered when Board appointments are made.

The conversation was cordial, frank, and wide-ranging, including fundamental questions regarding the appropriateness of local government by Public Authority, and even whether New York State should be in the business of running a locality. We spent considerable time on a detailed discussion of the 1984 law that created RIOC, and current and historical personnel questions. We hope to sustain and build on the new relationship with these State officials who determine the Island’s future.

In alphabetical order by last name:

Ashton Barfield David Bauer Vicki Feinmel Linda Heimer Sherie Helstien Matthew Katz Ellen Polivy
Below is the briefing document submitted to Mr. Schwartz referenced above.


1984 - Legislation creates the Roosevelt Island Operating Corporation (RIOC), a public benefit corporation, to administer and further develop the residential community.

1984-97 (and beyond) -  Many decisions that adversely affect the community and residents are made by non-resident Board members and managers, who are ill-equipped to grasp and solve local problems and capitalize on local opportunities. In addition, patronage and/or conflicts of interest characterize most Board and executive appointments.

1997 - Fed-up residents begin seeking both better Island administration and representative democracy, with direct election of residents to all seven public Board seats. (In advisory referenda conducted during the ensuing years, large turnouts repeatedly indicate overwhelming community support, ranging from 80-96%.)

2002 - Governor George Pataki endorses legislation mandating that residents occupy five of the Boardʼs seven public seats. (There are two ex officio seats.)

2007 - Governor Eliot Spitzerʼs administration offers residents the opportunity to create an Island-wide election to nominate residents for his appointment to Board seats.

6/2008! & 5/2009 - Governor David Paterson appoints four of the top vote-getters from the first election (2/2008), and reappoints an unelected resident first appointed in 1994.

1/2010 - Governor Paterson appoints the top two vote-getters from the second election (5/2009), and reappoints a 2008 elected appointee whose term was only one year. Of the seven public Board members, all are residents and six are community nominees.

6/2011 - Governor Andrew Cuomo appoints an unelected non-resident to the just- expired seat of an elected resident. The other two resident Board members with expired appointments (one of them unelected) continue to serve.

2/2012 - Residents hold a third election, for three expired seats, and send Governor Cuomo the names of the three top vote-getters as the communityʼs nominees. The highest vote-getter is the former elected-resident member who was replaced in 6/2011 by the unelected non-resident; the other two are incumbents. There is no gubernatorial response.

11/2012 - Residents hold a fourth election, for the three seats whose appointments will expire in mid-2013, and send Governor Cuomo the names of the three top vote-getters as the communityʼs nominees for this separate group of seats. One nominee is an incumbent. The resumes of the two non-incumbents are requested by, and provided to, the Appointments Office.


In light of this history of Roosevelt Islanders striving for local democracy, and with knowledge of Governor Cuomoʼs commitment to "strong and vibrant urban communities," we are respectfully seeking the following:

Ultimate Goal

Legislation providing that all seven public RIOC Board members be

• Roosevelt Island residents

• elected by the Roosevelt Island community

• seated in order of election results (even if executive appointment and legislative approval must
be retained because Board members are State officers)

Intermediate Goals

Restoration of our recent electoral precedent

• by having the nominees from our February 2012 election be appointed to the three expired seats. (Two nominees are incumbents; the other, a former Board member, would replace an unelected resident. See related request below, in Regularization of Board term expirations.)

• by having the nominees from our November 2012 election be appointed in June-July 2013 to the three seats that will expire then. (One nominee is an incumbent.)

A Memorandum of Understanding

• documenting agreement to the Intermediate Goals.

• agreeing to honor our Ultimate Goal, while the legislation is sought, by continuing the process of recognizing our elections (which, in the future, will always precede expirations).

Regularization of Board term expirations (related to February 2012 election goal, above)

• Durations of Board terms are covered by the legislation governing RIOC, but expirations are not. They appear to have been set by the timings of the first appointments.

• The term expirations of two of the seats contested in the February 2012 election are out of synch with those of the other five public seats.

• If the nominees for those seats, who are incumbents, are reappointed, we hope that a simple administrative adjustment in term expirations can be accomplished at the same time.

• The two requested changes are illustrated by arrows and dashed-line boxes on the second page of the attached table (RIOC BOARD TERMS), which contains detailed information about elections, appointments, and term expirations for Board members and nominees since 2008.

• Further context will be provided when relevant.
Of course, this statement does not really tell us anything about what really happened in the meeting and what NY State's position is on, as Mr. Katz puts it:
... fundamental questions regarding the appropriateness of local government by Public Authority, and even whether New York State should be in the business of running a locality. We spent considerable time on a detailed discussion of the 1984 law that created RIOC, and current and historical personnel questions....
Hopefully, in the coming days, our fellow Roosevelt Island residents will be more forthcoming in what was said during the meeting with Mr. Schwartz and the other NY State officials.

Here's previous post on earlier meeting by RIOC Directors with Mr. Schwartz and background on the appointment of the non-resident to RIOC Board in June 2011.


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Frank Farance said...

How typical: only those with privatization interests are at the meeting (4 from Rivercross, 2 from Westview). Ya think they would have toned down on Dr. Fererra, but they how that urks the Governor's office. They left out key points in their history, like:

- Margie Smith (while sitting as a RIOC Director) was lobbying for legislative changes to the RIOC Board that would take away the Governor's choices (legislation that the Governor vetoed)
- Ms. Smith and Jonathan Kalkin were asking for *postponement* of RIOC
2010 elections (along with Maple Tree Group) so they could keep their
people in place as directors
- Ms. Smith and others RIOC Directors with Rivercross Privatization interests fired RIOC President Steve Shane who was championing the State's interests
- Ms. Smith (while sitting as RIOC Director) holds a fundraiser for her Assemblymember who proposed legislation she lobbied for, and held the fundraiser in her apartment with other neighbors who would also enjoy half-million to million dollar profits in privatization and who would benefit from her recent actions (firing RIOC President) and the Assemblymember's legislation (would put the president in control by RIOC Board, rather than the Governor, and the board is dominated by one building, Rivercross, that has $200-400 million in privatization profits pending RIOC Board decisions)
- these MTG people were surprised when the Governor appointed a Director, and the residents had no nominees (because of postponement of elections)
- over half the present RIOC Board (4 of 7) has a financial interest in half-million to million dollar in profits and their profitability is based upon ground lease negotiations with RIOC whose Real Estate Committee is chaired by a Rivercross residents (Howard Polivy) and completely populated by Rivercross residents
- Mr. Polivy chairs the RIOC Audit Committee, who has not been forthcoming about RIOC liabilities (more liabilities, means more of a need for the RIOC Board to take money out of Rivercross privatization transaction, which the RIOC Board will decide)
- Ms. Smith chairs the RIOC Governance Committee, itself a conflict of interest since she is involved in the legislative side, too
- Simply put, for the past 15 years, the Island's politics have been driven by the strong pull of Rivercross privatization, but with different window dressings such as "Democracy" and the Maple Tree Group. The pretense of Democracy flew right out the window in 2010 when Mr. Katz, Ms. Smith, Mr. Kalkin, and MTG insisted on postponing elections. When the RIOC Board fired Mr. Shane over privatization, the RIOC Board's concerns were really over Rivercross' financial interests - Mr. Shane was also representing the State's interests in the Island House privatization, but that deal was making progress at the time and the firing of Mr. Shane caused a 1-2 year delay in completing the Island House deal (to preserve affordable housing for 400 families). While it might not have been as visible 15 years ago, since 2010 it is very visible that Rivercross privatization is a major force.

Anyway, I'll write to Mr. Schwartz and provide some of the missing perspective.

Joe Carbo said...

the nys ig office needs to get involed with the matter of privatization

Joe Carbo said...

the people in rioc will sellout their own mother for the right price

Joe Carbo said...

the people who run this island all live in rivercross

Romano Reid said...

Wow! with all that information provided by Frank F. Maybe there need to be another person considered for appointment to that board aside from Margie Smith. It almost seem as though she is the least qualified. Maybe the NYS appointments office need to thoroughly screen all candidates a bit more carefully.

RooseveltIslander said...

I think Ms. Smith does an excellent job as a RIOC Director representing the diverse interests of Roosevelt Island residents while maintaining her fiduciary duties to the Corporation. It is not an easy task balancing the various competing interests and in my opinion Ms. Smith makes a very valuable contribution to our community,

From my experience and observations, Ms Smith is very open to hearing any issue of concern to residents and working to resolve problems as best she can within the constraints of her position as a RIOC Director.

There may be times when I disagree with a specific decision but in my opinion Ms Smith is an excellent RIOC Director.

Romano Reid said...

Point well taken !

Joe Carbo said...

the nys i.g.s office needs to clean out rioc

YetAnotherRIer said...

Be careful with Frank's rants. Some of it makes a lot of sense, most of it is conjecture. You cannot have Frank as your sole source of information.

Frank Farance said...

YetAnotherRIer, your unsubstantiated "most of it is conjecture" is just empty. So "most" (meaning more than 50%) is conjecture, let's see your counterpoints.

Joe Carbo said...

Yea right .o.k. as long as her best interests are being taken case of

Joe Carbo said...

happy to see that matt katz is no longer rira pres. what a useless person

Frank Farance said...

Margie Smith used to dazzle us with budgetary analysis and COLA increases, all at her fingertips. Years ago prior to her RIOC position, I remember her questioning RIOC at a board meeting in the church, and I was VERY impressed. But now I no longer think so. Within three months of joining RIOC, she's lobbying and meeting with legislative staff (on the RIOC Board, yet outside their knowledge, and counter to the Governor's position). A month later (four months into her RIOC directorship), she's a leader in the charge to fire the RIOC president over privatization (something that affects her private personal finances directly, but impacts thousands of other residents negatively), and then a half-year or so in her RIOC directorship, she's advocating against RIOC elections (she's now on the board, don't need anyone else).

Look at her statement at the RIOC candidates debate: she wants a second tier of Public Safety officer to (paraphrase) help old ladies cross the street and rescue cats from trees. Meanwhile Public Safety is bloated and doesn't need more officers doing less, it has a $1.2 million overrun, it is managed poorly, it is inefficient, etc. and she's done little to make Public Safety or its Director accountable.

Ms. Smith, David Kraut, and Mike Shinozaki suffer from a dereliction of duty ("shameful failure to fulfill one's obligations") in their operations committee. The Governor's person says "[Schwartz noted] that Board appointees must satisfy the fiduciary responsibilities imposed upon them by statute". There are many requirements for being a RIOC Board member, yet he is singling out this one (likely) because he sees this area as a concern for the present RIOC Board, e.g., the Rivercross privatization (4 of 7 RIOC Directors) and its conflict with the fiduciary responsibilities towards RIOC.

Truly, if they weren't residents yet did the same job as Smith, Kraut, and Shinozaki do right now, y'all would be complaining about lousy RIOC board members and we should have some Residents on the board. But the board is mostly all Residents and most of the board does a lousy job ... lousy enough that it wouldn't pass muster at any paying executive job in the private sector.

Really, in light of the present Public Safety situation (over budget by millions for many years, bloated, inefficient, etc), wouldn't Ms. Smith's suggestion of a second tier of PS officer get laughed out elsewhere in the private sector executive suite?

As I've listened to residents, it seems some of their expectations are: "we'll they ARE a Resident, and they aren't completely incompetent [... pause, they're thinking, they need to have a qualifier to hedge this, pause ...] ALL the time". Right, "Not completely incompetent all the time" would describe some resident RIOC Board members, but that's not a very high bar of performance.

Romano Reid said...

I personally think ,although Salvatore Ferrera is a non resident he has demonstrated a suffice level of care & concern for this community. Most residents (not all) rant about a "non" resident being appointed by The Governors office. Sal has thus far been a real asset to this community. The level of Island residents who attend his school have skyrocketed ,He has worked with Erin Feely Nahem & Myself to implement more useful service for the island community at his school & at Sportspark ,Lastly ~ He has and continue to employ a good number of Islanders in all his schools as Teachers/Para professionals. In Comparison to what we have been getting from other so called RIOC board members at least the Island community has reaped substantive results from Sal's appointment to the Board. (My Opinion)~
Most may not agree on how Sal was appointed,but let's look at how the community has benefited .

Joe Carbo said...

as long as sal goes along with the privatization plans for rivercross. he can stay with rioc forever.romano just tell him to go along with the plan privatization plan for rivercross.

Joe Carbo said...

anyone who stands in the way of privatization for rivercross with be outed

CheshireKitty said...

But the Board cannot direct the RIOC Pres to do something the Gov opposes, and it's unclear if the Acting RIOC pres could sign off on the ground lease. Probably Cuomo is still weighing the pros and cons of the privatization. IMO, Rivercross might as well privatize. It's inevitable anyway. I don't see what the State of NY/RIOC stands to gain by not allowing Rivercross to privatize.

CheshireKitty said...

It's interesting that even as former RIRA pres, he still is very much involved in these RIRA-NYS talks.

CheshireKitty said...


CheshireKitty said...

Still, all the Mitchell-Lamas eventually privatize. Otherwise, they'd be middle-class projects. One notable exception is Manhattan Plaza, which managed to stay within Mitchell-Lama in perpetuity, but that is only the exception. Look at Island House. Any of the tenants that don't buy will be protected with rent increased limited by those worked out for rent stabilized tenants. But after these tenants leave, their apartments will either be sold or rented at market rate. It's a nice transitional plan so that the current tenants who can't buy don't immediately get priced out of their homes, but the future of IH is as a luxury/market-rate building. As far as Ferrera is concerned - he should have stayed out of the second floor of 504, and Kramer shouldn't have offered the space to him. But the deal is done. Otherwise, he's probably not that "terrible" an individual. Like everyone else, he was acting in the interests of his school in lobbying to get on the Board. It's understandable. If there was some outrageous deal struck with him on rents the school must pay, then he's taken advantage of his Board position and should be asked to resign or just fired by Cuomo. If he has done nothing wrong, I'd say let him stay. He does a good job at his school, and the school is a big asset to the community. I agree with Frank that Margie and her fellow Rivercross Board members have an interest in seeing Rivercross privatization implemented and that that will result in big profits for all the owners in Rivercross. So what can you do to ensure there are no conflicts? Exclude Rivercross residents, or IH or WV residents - because of pending privatization? Exclude Ferrera - because he runs the Child School? You really can't do that, you would be excluding too many people from possible Board membership. It would be nice if there were more of a cross-section of buildings represented on the board, e.g. if there were Southtowners on the Board, or someone from the Octagon. I don't know how the MTG or RIRA could do it, but maybe they could have proportional representation on the RIOC Board, or rather, for the RIOC Board nominees. This way, you could have a choice of voting for a nominee from the Landings, or from Southtown, as well as from Rivercross.

vickif104 said...

It's so interesting that Frank has taken it upon himself to be the moral compass of the island. He seems to think that he has all the answers and that he knows best. He looks at certain incidents and comes to a conclusion that he insists is the answer, when in fact there can be many answers. For those who don't know Frank it all sounds so reasonable and right. For those who do know him know that he just makes up what he insists is the reality. Example, the reason Steve Shane is no longer here is because of the Privatization issue. Would the Governor get rid of Steve Shane if he didn't want to. Unfortunately, the RIOC board is just not that powerful. Frank insists that Sal Ferrera got on the RIOC board because Maple Tree delayed an election and there were no other candidates. Bullshit, RIRA voted against an election at that time. Sal Ferrera was appointed because of a political favor the Governor wanted to do. Frank constantly brings up that the board is made up of mostly greedy Rivercross residents. David Kraut, Mike Schinozaki and Sal Ferrera are not from Rivercross. Fay Christian was living in Westview when she was elected. If people from other buildings don't run and don't get appointed, whose fault is it. Let's get real. Frank does seem to forget to tell you that he ran for the RIOC board, got, I think, the most votes, but for some reason the Governor would not appoint him. I would be wondering why, so rather than blaming everyone else for everything Frank thinks is wrong with the island, maybe he should take a break, concentrate on introspection and stop criticizing everyone and everything.

If we don't like some of the decisions being made by the RIOC Board, don't forget, the last few years we were able to vote them off. A few years ago we couldn't even have elections for the RIOC Board. That is now in jeopardy and this is the MOST IMPORTANT issue on the island.

Vicki Feinmel

Sara said...

Vikki, you are so right. Frank lives in a glass house but casts many stones. Now, he's influencing Erin to act like him, drawing conclusions and turning the RIRA Public Safety Committee into an Anti Public Safety Department entity. It just doesn't make sense. But, all I know is when Frank doesn't like something or someone, he'll do whatever he can (even make stuff up) to influence people who just want to live their lives on the island in peace.

I just wish more people would try to create a peaceful environment around here instead of a tumultuous one.

CheshireKitty said...

And how many in IHTA stand to gain by IH going condop? Aren't you one of those who will eventually make big bucks by selling your apt one day, once you've had a chance to buy it at the insider price? From what I've heard, Katz isn't going to buy his place - so, if anyone has a vested interest in privatization, it's you, not Katz. The reader can decide who is indeed the "most conflicted" and so forth and so on. Frank talks a great game about retaining affordable housing; sure, keep IH apt prices affordable so he can buy his place once the building goes condop. That way, he can maximize his profits a few years down the line when he sells his price and takes the money to buy a spread -- who knows, maybe out West, or down South, or in the mountains -- wherever his money will go furthest and buy the most space. Because that's what Frank needs most: The maximum amount of space... where he can blow off the most steam...

CheshireKitty said...

All I said was Katz isn't buying his place but you most certainly are. Katz may want to eventually move to Florida - who knows - but you are still relatively young, so waiting 10 years before you make a nice profit on your apt is no problem. The money you make at that point would come in very handy as you approach retirement and may wish to take the money from the sale to seek greener pastures, perhaps in the West or South. So don't paint yourself as some kind of "saint" with no vested interests. If anyone has no vested interests/conflict in the privatization process, it's Katz - since he is not in the market for his apt and thus does not stand to make money on a conversion, whereas you do, even if it 10 years down the line. But, it's pointless arguing with you - as everybody who posts on this blog has found out. You are *always* right, *always* come up with some elaborate explanation as to why you are right, and so forth. I'm simply trying to rebut your never-ending complaints about Margie and the other Rivercross people on the RIOC Board. Rivercross was a coop from day 1 - so the owners there of course have an interest in maximizing the value of their units. Anyone would. Why exactly Rivercross apt ownership should disqualify someone from RIOC Board membership is beyond me - but for you, it *automatically* represents a conflict. Not to be repetitive, but in that case, anyone who may buy their apt in IH or WV, or even, people who already own their apt, such as in Southtown, would have to be disqualified. Oh - except you, of course, since you have the sacred mantle of the IH affordability plan in which to wrap your blameless self. May I suggest that if Margie should be disqualified from RIOC Board membership because of conflict, which is what you say, then you should too. Because when IH privatizes or converts, you are going to be the first person on the line to buy their apt, and the only reason you will be doing that is not to "help" ESDIC, or the State of NY, or RIOC, or any of the other nonsensical figleafs you list - it's exactly why Rivercross owners, and all other apt owers buy their apts: to make money.

Frank Farance said...

CheshireKitty, again you get it wrong: Rivercross residents on the RIOC board get to decide how much profitability they each make via the ground lease extension, i.e., the conflict of interest between the RIOC fiduciary responsibility (getting more money for RIOC) and their own personal financial interests (giving less money to RIOC) for Margie Smith, Howard Polivy, et al. Sure Island House tenants, including me, have an *interest* in RIOC budgets, BUT IT IS NOT A *CONFLICT* OF INTEREST because no one from Island House is on the RIOC Board making those decisions about how much Island House gives to RIOC. You confuse "interest" with "conflict of interest".

RIOC Real Estate Committee is completely comprised of Rivercross residents and is chaired by a Rivercross resident. The RIOC Board Chair should reconfigure the board committees so that the RIOC real estate committee is comprised of members who don't have conflicts (e.g., Shinozaki, Kraut, DOB person).

CheshireKitty said...

Well, it's a given I got it wrong - since only you are ever right, according to you. If your analysis of the situation - which ties in with the RIOC Board member nominee election postponement of '10 - is right, it represents a vast conspiracy, not just of the Board members, but of the MTG, even the Wire. In fact, anyone who doesn't think like you is part of this conspiracy to pull the wool over everyone's eyes, so as to get away with the "sin" of privatizing Rivercross in such a way that doesn't somehow include payments to RIOC or ESDIC. Have you ever tried to discuss this theory with Kraut, or Shinozaki? They aren't conflicted, according to what you say, so they should be more objective. Kraut and Shinozaki are their own men, they certainly aren't anybody's pawns. Why not ask them about the "maneuverings" of the RIOC Board, and if what Rivercross is doing isn't fair to RIOC. Get objective feedback on the subject from them, get it on the record, and then get back to us on it. If what Rivercross is doing wasn't kosher, you can be sure Kraut, Shinozaki, and the other non-Rivercross RIOC Board members would have been raising a ruckus about it from day 1. I trust Kraut, and Shinozaki. If you can get them to agree with your ideas, on record, then you have a chance of proving your conspiracy theory. Otherwise, it's just another conspiracy theory....

YetAnotherRIer said...

Did you read his latest rant in the Wire? Right on par.

gregseeth said...

What Frank Farance will never admit to and what Cheshire is right about is that Frank Farance is on the board of Island House and will gain a lot from privatization. Just like Eastwood the board of island house is more interested in buying their apartments and are not really interested in the people who are left to rent their apartments (the poor who are supposed to be protected). They want to cash out while the renters are put into the eastwood submeter electricity situation and risk being evicted because they can't afford their electric bill. Frank and the other greedy board members don't care about the low income people who can't buy in and so they were not concerned with the fact that the building would be submetered. How are the renters going to deal with the high electric bills from the inefficient heat systems that exist in island house. Frank Farance and the other island house board members don't care. They know that they can make 50 thousand or more on day one and they can sell their homes at market rate in about 7-10 years. Just like Eastwood the building committee at island house has stacked the deck in their favor. The RIOC board has two members from NY state and two members outside rivercross. So the board doesn't do anything Nystate doesn't want to do. Farance tries to say that things are approved by committee or the RIOC president, but the RIOC president doesn't even have a vote.

gregseeth said...

One point that Frank Farance won't point out is that he has a very large apartment in Island House which he will benefit from selling long term. There is a direct connection with women he attacks on this blog and the WIRe and people that have helped his ex wife get away from him. Frank lives in an apartment that he will financially benefit from when it is sold that should go to a family, but because he lives alone, he doesn't need. He hates anyone that helps his wife(mostly women) get away from him and helped her get control of the kids. I heard that he no longer has control or custody of the kids and that is why you see him get so mad at the people who helped his ex wife get free of his mess. If this is true he should disclose this information to the youth center, because as a parent I wouldn't want my kids around a person who the court doesn't want to make decisions about his own kids. He acts like the ethics god of the the town, but if this information is correct he needs to come clean.

RooseveltIslander said...

comment above was removed because it included personal and private information about a family matter (whether accurate or not) that is not relevant to privatization issue or belong on this blog.

Frank Farance said...

Gregseeth, you got all the facts wrong. Unlike Eastwood, the present Island House tenants are all paying their electric bills as part of their *present* rent, i.e., the electricity is part of the *present* rent bill, so all residents presently afford their electric bill. So submetering is a Good Thing for Island House because it allows people to conserve energy and pay lower individual electric bills, Assemblymember Micah Kellner (who is an expert at this) said so at the IHTA tenants meeting with the DHCR Assistant Commissioner present.

While it might be possible to make money on day 1, it will be very little because of the high flip tax (transfer fee in the early years) and the profits would be treated as ordinary income, not capital gains (as reported by Geof Kerr, our Treasurer). Although it might make sense for millionaires to spend a couple hundred thousand to make twenty thousand, the Island House tenancy aren't millionaires (for Rivercross, that might be a different story because of the low penalty for not filing an annual income review in Rivercross). Last time we checked, 85% of the Island House tenancy was within 150% of Area Median Income, which means we're pretty much the middle income tenancy the M-L program was designed for.

As for "low income" people, I'm unaware of any Section 8 apartments out in Island House, which is very different from Eastwood.

As for being greedy, over time it will be the buyers who will be subsidizing the renters. Not exactly perfect, but it was the kind of compromise the tenancy wanted so that everyone could stay in the building and no one would be evicted by the conversion.

Lastly, I point out that no one in Island House is cashing out because none of us own the apartments. Buyers would have to FIRST plunk down several hundred thousands of dollars. Meanwhile, Rivercross is different because they already own their apartments: it's a straight cash out with no requirement for Rivercross tenants to put in more money.

Gregseeth, you should get the facts right next time.

CheshireKitty said...

If submetering is so great, why did Rivercross never implement it? Answer: Because submetering isn't so great! In IH, just as in RL, if sub-metering is implemented, it's gonna be a way for mgt to get rid of the "marginal" tenants on rent stabilization, so as to rent their apts at market rate! The picture is gonna be vacancy decontrol Frank! And you know what that means - landlords virtually salivate at the prospect of getting those newly decontrolled vacant apts, and long to find a reasonable, responsible way of getting the tenants to leave. In fact, there are some Sec 8 tenants in IH - the developmentally challenged folks in one of the wings across from the Security Desk. They will no doubt receive additional monies/stipend to pay for the exorbitant amount heating will cost under submetering - but what about the rest of the tenants, especially those that are just hanging on, such as the many single, senior tenants who really have no place to go and essentially no other option but to try to live on a fixed income? They get shafted under submetering, they are forced by the math to seek other housing, and bingo - Mr Hirshhorn scores another apt to either sell or rent at market rate!! So why is submetering such a good thing, Frank? Rivercross owners don't seem to think it's a good thing - otherwise, they would have implemented it long ago!! It's only a good thing if you feel it's a good thing to get rid of moderate income tenants, which, for all your bloviating about how great the affordability plan is, maybe you, after all a yuppie yearning to buy your apt, aren't exactly happy to have the moderate income folks who will remain tenants, in IH after all! It's a good thing for Mr. Hirshhorn, since it will effectively eliminate more tenants once they find out they can't afford the ridiculous electrical bills. Oh yes, it'll be great for Mr. Hirshhorn - finally turned loose in the open market, commanding at least double the ML or rent-stabilized rents! And you, Frank, and your cohorts on the IHTA, you were responsible for agreeably playing right into Mr. Hirschhorn's hands on submetering, blandly repeating what a good thing it'll be for IH tenants. Don't be surprised if a counter-organization springs up within IH once those electrical bills start rolling in - even if the windows are changed and thermostats installed. You can bet on Micah getting involved to "save" the apts - along with an alternative/counter RA, since the doormats on the IHTA didn't have the cojones to stand up to mgt on submetering.

seegreen901 said...

Exactly You will see the same submeter issues in Island House and Westview, especially for the renters. Just like in Eastwood the poor will get ignored. Micah Kellner gave an interest in stopping submetering in eastwood for this reason, but recently the owner of the Island house building Hirschorn has donated to him a large amount of money.

What happens when these people can't afford their submeter electric bills and have to move out?Do their homes go to market rate? Is this a tactic to get renter's out. Is it ok for a politiican to take money from a building owner he is currently helping his constituents with?

Frank Farance said...

seegreen901: Your math is wrong. Let's say the rent+utilities is $1600, which is $400 electricity and $1200 actual rent. After submetering the tenant will get two bills: $400 for electricity, and a rent reduction to $1200. The point you miss is: all tenants in Island House already are paying the full cost of electricity in their rents, we see this in the M-L budget-rent determination disclosures. Island House, Westview, and Rivercross have this open visibility on their electric, Manhattan Park, Octagon, and Roosevelt Landings (Eastwood) do not. The Southtown buildings probably have a mix.

The "poor" are a problem for submetering in Roosevelt Landings (Eastwood) because they aren't paying their full electric costs, and Urban American wants to break out those costs to either (1) capture more profits, or (2) force evictions (which will allow them to rent the apartment at market-rate and make more profits). In other words, it would be possible to continue without submetering, but the profits would be lower for UA ... really, the Section 8 vouchers already cover the electricity included in the rent, this is just about profits.

Frank Farance said...

To RIOC Board: Tips on Filling Vacancies at RIOC

Here is some unsolicited advice on filling the vacancies.

1. Get your General Counsel to do some work on your behalf. Ask your GC to offer opinions, in writing, on what you board members are permitted to do and not permitted to do. Truly, it would be irresponsible not to ask your GC about this ... because he is the one you should be listening to for authoritative legal advice. Ask your GC if you are able to hire someone for any of these executive positions (President, VP of Operations). Ask your GC if you are permitted to disagree with the Governor. Get the legal backup for that opinion, e.g., if the head of HR says you can't hire anyone who is non-union, then get your GC to provide authoritative legal interpretation why that is so (or not). You need to really understand from your GC, (say) when hiring a President, the distinction between a "bad idea" (not recommended, but permitted) and something improper (not permitted). Mr. Lewis is the Governor's surrogate, but his higher priority is his legal obligation to give you, the directors of the corporation, good legal advice. Resident members (for your own benefit), let the community know his opinions ... at least we'll understand the legal constraints (yes, there are political constraints, too, but we already know them). Maybe you need a new head of Human Resources for RIOC (really).

2. Use a standard negotiating tactic with executives who force their own people upon you. Simply, if they choose the person, they take all the responsibility of that employee, which is why, when filling lower positions, high executives don't just skip over their managers in large corporations. Now the RIOC President isn't as much of a problem because they interact with the Governor and, really, RIOC needs to have a good relationship with the Governor. But the VP of Operations is a really important position that the Board should carry strong weight: you'll be interacting with this person every week, they really need to be a good person, and the RIOC Board truly understands better than the Governor the needs of that VP of Operations. Really, does the Governor want to force a person when the RIOC Board has a much better understanding about the VP of Operations? Ditto for the Director of Public Safety (which we hope you'll be replacing soon).

In short, you'll have to accept the Governor's recommendation on RIOC President. But for the VP of Operations (and a new Director of Public Safety), stick to your guns ... that's a battle worth fighting for, and a reasonable compromise with the Governor.

Now this doesn't mean you're free from political pressure, but it means you've done responsibly what you can do within your scope. Good Luck!

[E-mailed to RIOC Board and RIOC's legal department yesterday.]

Frank Farance said...

ChesireKitty, again you got most of the facts wrong. Island House is not the same as Eastwood because Island House tenants are already paying their full electric bill and submetering is truly a conservation issue and cost reduction issue *for bills we already pay*. Whether Mr. Hirschhorn has donated money to Kellner or not is irrelevant because the tenants of Island House want submetering, too: it helps reduce electric usage.

FYI, an extra A/C in Island House (for your so-called vulnerable-mothers-who-want-cool) is charged right now at a flat-rate of $13/month, so the extra energy usage (purportedly, according to you) for some families is less than 1% of their rent, i.e., not significant for Island House tenants and a reasonable deal for tenants.

And your thoughts on income/etc. have no bearing on the issue: either we pay the bill collectively and split it (approximately) 400 ways (based upon apartment size, etc.), or we pay the bill individually. We don't get out of paying for electricity in Island House regardless of our incomes (but not the case for Section 8 Eastwood tenants who don't have to pay for electricity). You really are clueless about building finances.

If a Section 8 tenant is paying (say) $300/month, but their electric costs are (say) $600/month, then breaking out the electricity just won't work no matter how efficient they are. The problem for Eastwood isn't submetering per se, the problem is Section 8 vouchers provide most of the rent+utilities and the tenant's portion doesn't cover the utilities.

By the way, that was the main motivation for Eastwood moving out of M-L: if the M-L rents were (say) $1600 and the tenants were paying (say) $300, then the Section 8 vouchers had a value of $1300 per apartment. The M-L program kept rents pretty much at cost (plus allowed profits for the owner). When exiting the M-L program, the apartment rents could increase to (say) $4000/month as so-called market rate. But with (at the time) 90% of the apartments in Section 8, the exit for M-L would suddenly boost the profitability of Eastwood by ($4000-1600) * 12 months * 900 apartments, i.e., an extra $26 million in profit every year, free and clear, simply by exiting M-L (of which RIOC took very little).

As for Rivercross, they have central cooling/heating (I've heard), so they have taken a different approach, e.g., at that point, the separate electricity cost might not be worth the $600K-ish cost for adding submetering. Island House has and most likely will still have different cooling/heating (non centralized) than Rivercross. Island House plans on a complete window replacement, and heating/electrical system upgrade. As per our engineers, our main heat/cooling loss is through the windows and window seals (different than the other WIRE buildings), so our solution addresses our particular needs.

In summary, submetering isn't always Good or always Bad. It's bad in Eastwood because Section 8 tenants' rents are not enough the cover the bill. It might be bad in Rivercross for a different reason: the cost of installing submetering ($600K-ish) does not provide enough benefit because the cooling/heating is centralized, which is the main electricity cost, and what's left over (lights, computers, dishwasher) aren't worth the breakout because conservation isn't really significant (or at least that's what Rivercross tenants might believe; maybe someone from Rivercross can comment on their decision-making). For Island House, since the tenants already pay the full amount for electricity, there isn't the Eastwood-like Section 8 issue, and submetering, along with window/heating/electric replacement, is intended to save us all money, something the tenants support, i.e., Good for Island House.

Mark Lyon said...

When pursuing submetering, it would be interesting if any of the hardware providers offer an option that allows residents to either see a display of their kWh usage in the apartment (or other accessible location) or on some sort of web portal.

In MP, my submetered usage has varied wildly without a clear connection to changes in the energy usage in my apartment. While I would like to trust that management is accurately representing my share of the bill, I really have no effective way to do that. Coupled with not getting rent statements until after they are due, there's precious little time to actually do anything about verifying my bills.

Frank Farance said...

CheshireKitty: The reason why you're usually wrong is: (1) you're facts are wrong, (2) you're intellectually lazy, and (3) you lack mental discipline. A great losing strategy.

You're wrong on the facts. The two apartments you cite, which you
believe are Section 8, are not Section 8. They are "corporate" tenants
(PSCH), there are only two such apartments in Island House, and the
occupants those apartments are not the leaseholders. Regardless, those
apartments already pay full electricity, so it is a non-issue, and they
are not threatened by submetering.

You're lazy because you don't research your statements (you wanted us to read 400 words of your post, but were unwilling to expend 15 seconds of interest research on why copper turns green).

You're lazy because, when someone provides you more information, you don't give them the courtesy of Trying It On, e.g., how would there be a problem if $1600 were split into two bills of $1200 and $400?

You're lazy because you can't seem to grok that the budgeting of a building like Eastwood with 85-90% Section 8 apartments with many tenants' rent NOT covering electric costs is VERY DIFFERENT than Island House where the tenants are already paying their electric costs (just bundled with their rents) and submetering is breaking out a cost THEY ALREADY PAY.

You're lazy because, regardless of your decades here in WIRE buildings, you know zip about the budget-rent determination process, which is how our buildings actual expenses, including electricity, are disclosed. So your concern about some "deficit" simply can not be true.

You cite Joyce Mincheff and IHTA not letting her speak at the IHTA meeting (are you actually Joyce Mincheff?). Ms. Mincheff is not a tenant, our meeting was called by DHCR for our tenants but, as a courtesy, we let others listen. I recall Assemblymember Kellner explaining the difference between Eastwood and Island House, it's a factual difference that you refuse to accept. Right, Eastwood people coming to an Island House tenants meeting to object to Island House's submetering.

You lack mental discipline in that your focus is based upon some bigoted, predetermined line of thinking, regardless of the facts at hand.

As for Rivercross, I did give you an plausible explanation (with a request for a Rivercross tenant to explain their decision-making): Rivercross has a different system than Island House, Westview, and Eastwood, as explained to me by their Super. The costs of submetering are about $600K for Island House, which means they'd be about the same for Rivercross (give or take). Given the remaining utility bills (low) and the cost of submetering ($600K-ish), in Rivercross it seems like an additional expense with little added benefit (because of the centralized system).

I don't need to talk to Ms. Smith, I spoke to the Super who explained how their system works. I spoke to him (us building people do) to exchange ideas on what works (or not) in looking into future plans for Island House.

In summary, you lose the arguments because your facts are wrong, you're intellectually lazy, and you lack mental discipline ... an ongoing strategy for losing arguments, keep it up! :-)

theohiostate said...

Yep. Every time he opens his mouth he loses more and more credibility. He subscribes to the motto, "If you can't dazzle them with brilliance, baffle them with bullshit".

CheshireKitty said...

Now Frank has resorted to outright lies. For example, he's saying that Urban American has to pay for the Sec 8 tenants electricity - lie! The electrical bill at RL is paid for out of all the tenants' rents - whether they are market rate, Sec 8, or LAP. So that's a complete lie. Second, Frank offers "gossip" from a super as to the reason why Rivercross never instituted sub metering. "Gossip" is not the Gospel truth - often far from it - as anybody knows. Frank, having alienated Ms. Smith for years, can't bring himself to call her, or any of the other many visible and active Rivercross owners such as the Polivys, to ask a simple question, which is - why wasn't sub metering ever implemented in Rivercross? Frank lies again - or hasn't the guts to ask the perfectly nice people of Rivercross the details of their decision to not implement sub metering. The meeting that you kicked Joyce out of was an open, public meeting - you took it upon yourself to shoo her away because she had tried to inform the assembled IH tenants about the excessive cost and problems with sub metering. She has a great deal of experience with sub metering issues - which you, since you consider yourself a know-it-all on sub metering (among the myriad other topics you feel you're expert at) can't bring yourself to accept. Joyce could have told IH tenants alot about sub metering if you would only have only let her speak to the assembled audience; instead, you acted like an enforcer of the owner, almost in a Gestapo-like manner - as if you were providing security for the meeting, which of course you were not - in preventing her from speaking. Joyce, a long time Island activist who has helped countless residents and who only has the interests of the residents in mind. Frank, someone who evidently has more in common with the owner, than the residents if he felt it necessary to suppress information that would have helped the IH tenants. What were you afraid of, Frank? Afraid she'd reveal the truth about sub metering to the IH tenants and spoil your little show, with McCurnan, the IHTA Board, Hirshhorn and his wing man the "cute" attorney, sitting right there in front of everybody at the front of the church? Evidently. Hirshhorn will put in the new windows, the energy-star appliances, the thermostats, and so forth, as he's promised. Of course, he obviously could have done this a long time ago without sub metering being implemented, but he didn't because he wanted to keep these improvements as a bargaining chip when the time came to convert. The ounce of flesh he demands in exchange for the upgrades is the sub metering plan. We'll see how far he gets with that ultimately. The affordability plan will go through; sub metering in IH will just be attacked later, and, like Eastwood, sub metering will be blocked. And, by the way, when you say IH tenants "want" sub metering - you're lying! IH tenants know sub metering will just make their apts that much less affordable, and will make it that much more likely they'll have to leave. But maybe that's what you and Hirshhorn want.. Have you perhaps cut your own special deal with Hirshhorn, keeping the tenants quiet and the conversion smooth in return for a special discount? You seemed awfully friendly with him..

CheshireKitty said...

Seegreen is right: The only reason the landlord is going to invest millions in installing the sub metering system in IH is because of the return on investment - an opportunity for an *immense* return at the expense of the average, middle-class tenant. Hirshhorn could care less if those tenants are socked with sky-high electrical bills because the heating system is so inefficient. He could care less if his tenants have to either freeze or eat. Or kids shiver when there's frost on the windows because parents can't foot the steep electrical bills - all because the building was constructed in an energy-inefficient manner, with a totally energy-inefficient heating system. The situation in IH is exactly the same as in Eastwood! Frank wont admit it because he's so anxious for the affordability plan to go through so he can buy his apt. Frank is lying when he says Eastwood Sec 8 tenants rent doesn't go toward paying the electrical bill. The rents in both IH & Eastwood pay the electrical bill in those buildings, and he knows it. Don't believe Frank's lies - he is talking as if he's a paid representative of Hirshhorn, trying to make us all think the rent reduction will "cover" the electric bill. They tried that lie at Eastwood - it didn't work, Frank. And that was what Joyce was trying to alert IH tenants to at the meeting at Good Shepherd, when you prevented her from speaking. Frank acts like he's the double of Hirschhorn, as if he's Hirschhorn's mindless parrot, endlessly repeated the mantras "sub metering will be good for IH tenants" or "IH tenants want sub metering". Is Frank actually in Hirschhorn's pocket, i.e. being "fed" a discounted rent? Is he in on some sort of private deal, payment in the form of a rental discount, in return for keeping the tenancy quiet while Hirschorn moves forward with his ultimate goal of sub metering and either extracting every last penny from tenants or forcing those that are bled dry to leave?

CheshireKitty said...

Such a lie - sub metering is a Good Thing for Island House because it allows tenants to pay lower electrical bills. How can it possibly allow tenants to pay a "lower" electrical bill if they are not currently receiving an electrical bill (and thank God for that) to cover the absurd heating system cost? The electrical bills will be sky high - and Frank knows it. He is as usual lying when he says sub metering will be a Good Thing for Island House. In your dreams, Frank. Or rather, in Hirschhorn's fond dreams of masses of money - a windfall really - once he can keep more of the rental income and doesn't have to pay the heating costs anymore. It isn't the fault of IH tenants that the building was constructed with an inefficient heating system and they shouldn't have to pay the wildly inflated cost if sub metering is implemented. If anything, it was the State of NY's fault that the building was constructed with an electrical heating system. If anything, less money should go to the State in exchange for the ground lease to make up for the extra money Hirshhorn has paid to heat the building. The progressives will fight for the tenants of moderate income in IH - to make it possible for them to remain in their apartments, something that will not be possible under sub metering. Frank will be off tooting his horn about the "benefits" of the sky-high electrical bills, possibly in the pay of the landlord, in the form of a reduced rent deal, who knows? It's hard to explain why Frank insists on repeating the lies that sub metering will be a Good Thing for Island House tenants when the facts clearly prove that it won't. It certainly sounds like Frank has been paid off by Hirschhorn to do his bidding - be compliant on sub metering and maybe later be cut an even better deal on buying his apt. Keep the truth about sub metering under wraps and then be rewarded with an extra-cheap price on his apt.

CheshireKitty said...

The tenants at IH will undoubtedly find many "discrepancies" - just as you describe - in their electrical bills. Management can't lay off making sub metering another lucrative source of income. And the poorer IH tenants will have no choice but to remain tenants - at the mercy of a management who would just leave to see them leave. Management will use sub metering to get the marginal tenants to leave - the dream of vacancy decontrol! Frank is in a position to buy his large, corner, terraced apt. He could care less about what the more moderate-income tenants who will not be in a position to buy theirs. He repeatedly lies when he says sub metering will "help" IH rent stabilized tenants - yeah, "help" them leave, which is exactly what management wants.

CheshireKitty said...

So you really expect IH residents to buy the line that their electric bill will be covered by the rent reduction? And what if it doesn't? What if, after the "improvements" it's way over the reduction that will be decided on by the PSC? Then what? You'll go around wringing your hands - saying, oh, I'm sorry, I was wrong - it seems to cost *much* more to heat these apartments! Oh me, oh my! As you happily usher the "marginal" i.e. less well-off-than-you IH tenants out the door, to make way for the kind you and Hirschhorn would prefer, the yuppies. There was a cute female atty with Hirschhorn - not a guy. Evidently she didn't make an impression on you - wonder why. You still won't call Margie or Howard about Rivercross - why, for over 30 years, that building, a coop, never went down the road to sub metering, if, as you explain, sub metering is so great. And there were *many* non-IH residents at the so-called private meeting at the Community Center. Do you really think Hirschhorn can identify all his tenants by sight? What makes you think all of the questioners after the presentation were actually from IH? You picked on Joyce at that meeting because you were simply afraid to let her speak the truth - what's the expression, speaking truth to power. If anyone has experience and knowledge of sub metering on this Island, it's Joyce, Frank - not you. You were afraid of her overturning the nicely-balanced apple-cart you and your fellow traitors in IHTA have worked out with Hirschhorn on sub metering. Oh, and your *great* help with the Eastwood anti sub metering struggle - bs. I remember you suppressing the Eastwood "multitudes" that showed up at a RIRA meeting to protest the sub metering plans. You were RIRA Pres then - but you aren't now. It's likely when IH tenants start showing up at RIRA meetings to protest sub metering, they won't be thrown out by the current RIRA Pres. Along with the sub metering component of the "affordability plan" the current IHTA Board should be thrown out - for selling out the tenancy. And Graham? What exactly is his status lately? Is he still IHTA Pres? There was word he took a powder shortly after that meeting... was he getting a little apprehensive about the approaching s--t storm regarding sub metering and decided it was time to depart? Or was he thrown out of his apt for some reason? If he's no longer in IH, then who is the Acting IHTA Pres?

Frank Farance said...

CheshireKitty, it seems pointless to respond to you if you don't acknowledge the facts, as I've done in several posts. In your mind, tenants associations can not support submetering, which is just not true.

As best summarized in a single sentence, the tenants don't want to be paying for others' electricity, especially when they feel they conserve energy themselves (a position of both renters and buyers).

As I mentioned Rivercross has plans for submetering (confirmed by David Bauer and Dick Lutz), but CK you don't hear that. Really, why would anyone contact someone (for me, Ms. Smith or Mr. Polivy) if they didn't feel they would get a honest/complete answer? Not to mention, it's your topic, but you're intellectually lazy and haven't researched it.

IHTA paid for an engineering study of all building systems, which was done by Rand Engineering, a reputable firm. The engineers used thermographic cameras and studied several kinds of apartment configurations. Contrary to some initial tenant impressions, the main heat/cooling loss comes from the windows and window seals, which will be replaced with the new window systems. Rivercross has a similar skin (panels) and a similar solution. Eastwood has a different skin (bricks), so the concerns of Eastwood (and I've seen the images) don't apply to Island House.

As for the IHTA directors, we are required to complete disclosure statements, none of us have relationships with owners or the managing agent. I initiated the disclosure process for IHTA directors because we've had problems in the past with former directors. The tenants are satisfied with the disclosure process.

IHTA calls meetings when they are necessary (tenants' needs, conversion issues, etc.). We've provided newsletters and flyers as doordrops when news comes along. We tried monthly meetings, but the attendance tapered off. The tenants trust us and, when there is someone worthy of a big meeting, they trust us to call The Big Meeting. Tenants regularly communicate with the IHTA Board about maintenance issues and such (stuff unrelated to conversion), and we follow up. If the tenants wanted a monthly meeting, we would call them, but that's not what they want.

You mention how much money Hirschhorn will make but, really, the tenants don't care. Given the choice between a consistent/solid focus on affordability for *all* Island House tenants versus a greediness that is rationalized with "the owner is making too much money", the tenants have chosen with a lopsided majority (76%) to focus on the affordability (a moral issue) rather than greediness (worry about the owners' profits, or the desire to own the pool).

Frank Farance said...

CheshireKitty, Island House has been talking about submetering for many years, well before Eastwood. Simply, people don't want to pay for extra energy use by their neighbors, and flat rate electric cost doesn't motivate conservation. The reason why it hasn't been done previously (and Rivercross is probably the same rationale), is that it costs money for the submetering system, and the windows, heating, and electrical systems. Island House will take on those major capital improvements post-conversion. Rivercross has its $50 million loan to accomplish similar improvements.

As for 76% of Island House supporting the affordability plan, there was an alternative as explained by and led by Lee Edelman, but the tenants soundly rejected it.

CheshireKitty said...

The current system doesn't mean we are paying for the electrical usage of others, nor are others paying for our electrical usage. It means the landlord pays the total electrical bill out of the total rents he collects. The cost of energy, which has increased since the 70s, may one day go back down, especially if fracking is permitted - which will drive down the cost of natural gas. You still can't explain why Rivercross, which has been a coop for 30 years, did not implement sub metering many years ago. Of course, exactly like you silenced Joyce, you won't even give a minute to describe the Edelman plan because you do not want IH tenants or readers of this blog to be "contaminated" with any ideas that are not in the "affordability plan".

Frank Farance said...

Mr. Edelman's alternative was to disagree with the owner, reject the plan, ask for the pool (which he lived above), and hold out for more money (because he thought the owner was making too much money). With the owner having filed for Intent to dissolve the M-L program (and a right to do so, which we could not prevent), there really wasn't any implementable alternative that Mr. Edelman was proposing, i.e., just staying in M-L was not an option.

Also, the tenants knew DHCR and RIOC (via Mr. Shane) had been supportive of getting a workable affordable plan, but at that decision point (September 2009), it seemed like we'd lose support of DHCR and RIOC if we became greedy (e.g., the tenants insisting upon taking ownership of the pool is not about satisfying the moral need for affordable housing).

For Island House tenants, this was all discussed via several building-wide door drops (including Mr. Edelman's materials), and Mr. Edelman had an opportunity to present his points directly to the tenancy. His arguments were unconvincing (as reflected in the 76% vote against his position).

As for paying for the electricity of others, Island House is not like Eastwood. Collectively, we pay our full electric bill via our rents (that's the way M-L works). If you're blasting the A/C 24/7 and keeping the windows open, while I turn reduce my A/C usage, compared to before submetering where we're paying the same portion of our rent (apples-to-apples comparison) for electricity, after submetering you will be paying more for electricity and I will be paying less, i.e., prior to submetering I was paying for your extra usage and there was no financial incentive to reduce electricity. It's intuitive (and mathematically provable), and Island House tenants understand the arithmetic, but you don't.

westviewgirl said...

so many have their hands out in this city, and always have...that is one of the huge problems about NYC. Each and every single renter, home owner even those in section 8 and the housing projects should have a con ed bill to pay each month. Maybe some with discounts, but all those that live in NY should have to pay their way. All the free hand outs in housing and utilities in NY need to stop. Everyone should have to pay their way here. Handing down an apartment to another in the family needs to stop as well, low income families have no incentive to do better in life if they rewarded for not working and are given such cheap housing and free utilities. How much longer will this go on in this city and state?

Frank Farance said...

CheshireKitty, I didn't say Eastwood tenants don't pay their electricity. I said: some of them (I've heard) pay rent below their electric cost, so a rent reduction to zero would not make up for their electricity cost. Also, I've explained the finances and history of Island House, I don't need to do it an Nth time, you just need to stop being intellectually lazy and read what has been written.

The Island House tenants support submetering because (1) they are already paying the full electric amount (no hardship like Eastwood), and (2) they want to benefit from the savings that come from conservation (and not pay for others' non-conservation), including new window, heating, and electric systems (just like Rivercross).

CheshireKitty said...

The person you should verify your information on Eastwood with is Joyce, but I doubt if you will ever call her to find out if some Eastwood tenants "pay rent below their electric cost" as you say. Oh sure, IH sub metering is a done deal - until the tenancy rises up in arms once the electric bills start rolling in during cold snaps or heatwaves. With the current system, the landlord is paying the electric bill out of the pooled rents - paying the electric bill for the entire building. The only person who is going to benefit by switching to sub metering is the landlord, who in this way gets out of paying the excessive cost of heating. Anyone who supports the landlord in transferring these excessive costs unevenly to tenants, as opposed to the present system, where the electrical bill is paid out of the collective rents, is heartless since the excessive cost of heating apartments is going to unfairly hit the most vulnerable tenants.

Mark Lyon said...

There are non-landlord benefits to the grid and the globe by ensuring each user of electrical power knows that electrical power isn't a limitless resource. The State has made a strong push for submetering to encourage conservation With your current system, no apartment has any incentive to conserve power.

RIOC made a huge mistake by allowing the buildings on this island to adopt electrical heating, particularly since they already had district heating available from the steam plant! Our apartments would be far more comfortable and environmentally friendly if they'd have simply used the steam plant to provide heating and cooling to the buildings.

One nice thing for submetering, though, is that the PSC last month adopted new submetering rules. Landlords must now offer a levelized payment plan, so hopefully it will be possible to make submetered bills more predictable.

Frank Farance said...

CheshireKitty, laughably, you make an argument FOR submetering in Eastwood: "[call Ms. Mincheff] to find out if some Eastwood tenants "pay rent below their electric cost" as you say.". If all the tenants in Eastwood pay rent higher than their electric cost, then (in fact) their rent could be reduced to some positive dollar amount, i.e., subtract the electric cost. And, as another benefit of such a conversion, if (say) rent were $450 and electricity were (say) $400, then their rent could be reduced to $50/month, which could be a great tenant benefit: only have to pay $50/month to not get evicted, i.e., the likelihood of eviction for Section 8 tenants is reduced, which means less potential profit for Eastwood (I agree that Eastwood has been aggressive about evictions).

In other words, submetering, for tenants who already pay rent higher than their electric cost (e.g., Island House) is not an eviction tool because you can't evict someone for not paying electricity and reducing the rent makes it easier for the tenant to stay.

However, if the rent is lower than electricity costs, then submetering represents a significant increase in out-of-pocket costs combined with the poor building infrastructure (a problem for Eastwood, but not for Island House and Rivercross with their window/etc. systems replacements).

Yes, I have spoken to Ms. Mincheff, she's given me information about Eastwood and its tenancy; and I've spoken to tenants directly about their rents: some tenants pay rent below their electric cost.

Regardless, here is the reporting from the February 21, 2009 issue of the WIRE (I supported this cause during my RIRA Presidency):

[WIRE:] Assemblymember Micah Kellner, Rep. Carolyn Maloney, Borough President Scott Stringer, City Councilmember Jessica Lappin, and State Senator Jose Serrano reacted quickly when the sample bills became available. For the subsidy tenants - the majority by far in the building now called Roosevelt Landings - the rent reductions that were prescribed to compensate for a switch to submetering were well under the likely cost of power. ...

[WIRE:] The proposed increase presented the possibility that some Section 8 tenants could spend all or most of their income on housing. A tenant receiving $1,200 in disability or Social Security benefits who has no other income would pay 30% of that amount, or $360, toward rent, with the federal Department of Housing and Urban Development (HUD) picking up the balance under its Section 8 program. A switch to submetering would trigger a rent reduction of $100-200, depending on apartment size, for a two-bedroom unit, producing a base out-of-pocket rent cost of $160 to $260. But an electric charge of $700, added to the tenant's share of rent, would effectively triple the out-of-pocket cost of a dwelling unit. The disruptive effect in the 1,003 apartments, over 700 of which are occupied by subsidized tenants, would be considerable.

As for cold snaps, the present regulation provides for a "levelized" billing approach, which gets rid of spikes in usage. See 16 NYCRR Part 96, Submetering Regulations, section 96.5, paragraph (c) (see "$FILE/16%20NYCRR%20Part%2096%20-%20Submetering%20Regulations.pdf").

CheshireKitty, as usual, you have the facts wrong.

CheshireKitty said...

I await Frank's response to your excellent points - which will have an impact on the way sub metering is implemented in IH.

Frank Farance said...

Yes, Island House is aware of the PSC regulation. Since electricity is already part of our rent and we will have window, electric, heating systems replaced/upgraded, we expect to meet those requirements of submetering regulation.

Frank Farance said...

CheshireKitty, you need to check yourself: you're so anti-submetering that you can't acknowledge the ongoing rebuttal of your points, the main one is that Island House is not Eastwood. You keep ignoring significant differences:

(1) the skin of Eastwood is very different from the skin of Island House. You say: "The WIRE buildings are cheaply-built projects", but that is not so. Rivercross and Westview were built with the intent to be co-ops, Island House was built to be a middle-income building. However, Eastwood was built cheaply. Really, only Eastwood has cinderblock walls, it was built for low-income housing.

(2) unlike Eastwood, Island House tenants already pay the full electric bills, so it is possible to reduce the rent for Island House tenants for the full electric bill amount, i.e., assuming the same amount of electric usage, the submetering is intended to be revenue neutral. Of course, using less electricity will (post submetering) reduce one's electric bill.

(3) the tenants want it, both renters and buyers see the long-term benefits (lower energy consumption)

You point to a flyer, which involved one apartment blowing a fuse. I've seen handymen doing winterization, which really helps block the cold. The tenants have heard the engineering firm's explanation of the heating loss (including a Q&A), the explanation was supported by thermographic imaging and probes, and the new systems (windows, electric, heating) will address those problems.

As per the affordability plan, renters will continue with strong rent protections, including *lower increases* for *lower income* tenants.

As for your remaining points, I've already addressed them, you just ignore my responses.

Frank Farance said...

CheshireKitty, I'm always impressed with lack of intelligence, regardless of your elite academic credentials.

The regulation provides a minimum requirement for financial benefit (or, better stated, a minimum requirement of lack of financial harm). Somehow you believe that if the requirements are not met, submetering will continue in Island House, but it cannot be acceptable because it doesn't meet the PSC requirements. Those requirements are good for the tenants, so we're in support of them.

It is a simple mathematical optimization problem to find a sweet spot that meets those requirements.

What's clear is: you don't spend much time thinking about how to solve problems. You're lazy and rigid in your thinking. If you were a resident of Island House, the tenants wouldn't tolerate you more than ten seconds. You remind me of a prior resident who was wrapped in emotion and conspiracy theories, but ultimately resigned from the board because (everyone figured out) she was tough talk and all (intellectual) bluff ... for all her talk, she really couldn't construct a solution to a problem that (in theory) she was expert at. The tenants would not allow her ten seconds with her baloney, and you would suffer the same fate.

CheshireKitty said...

All I'm saying is that if IHTA does not require verifiable evidence that 60% of tenants will either benefit or not be affected one way or another (remain neutral) by sub metering, and instead just "trust" the landlord's assurances that will be so, then IHTA should be replaced by building representatives who will make this demand. I am not the person you are referring to (whoever that was) - not is it germane to the discussion to bring up references to people that may have irritated you at some point. Who cares?

Frank Farance said...

CheshireKitty, wrong on facts. The naked tenant kept overriding the tripped circuit breaker, which broke the breaker, only 1 apartment affected. The tenant, ONLY WEARING BOXERS, had several space heaters running (rather than put on clothing). When the circuit breaker tripped, he forced it back on, and kept forcing it back on (overriding it) until the circuit breaker itself overheated and wouldn't work any more.

The contractor was called because, even though Island House staff could have replaced the breaker themselves, it would require turning off electricity and inconveniencing several apartments. So they called a contractor who would work on a "live" electrical system and replaced the breaker and, thus, only one apartment was affected.

The super suggested that the tenant wear clothes. The tenant improperly operated the circuit breaker, causing it to break. The super repaired the system in a way that was least disruptive to the tenancy.

You suggested that Island House was built cheaply with cinderblock, but that is not the case (no cinderblock according to super). Unlike Eastwood with halls of cinderblock and paint, Island House has double sheet rock attached to studs (a third sheet of sheet rock is on the inside of the apartment) and the halls have wallpaper, i.e., not cheap construction as you claim.

As for bathroom sliding doors with so-called heat loss, in those apartments the bathroom has all interior walls, there is no heating/cooling loss.

As for the venting, the tenant's engineers looked into this, it is the window seals that are the main problem, and will be fixed with the new window, heating, and electric systems.

Yes, lower rent increases for lower income tenants. Apparently, you didn't read the Affordability Plan.

You just don't seem to get that you're intellectually lazy, so you didn't look into the facts any further. For the tenants you spoke to, at least you could have asked more questions (e.g., Are all the walls interior walls?), but you're intellectually lazy.

I don't mind continuing this dialog (maybe no one is reading at this point), because I get to inform people and my foil (that would be you) continually looks like an idiot (which you seem to enjoy). Maybe we were meant for each other. :-)

Frank Farance said...

CheshireKitty, you're not a Solver, just a
Complainer. Hiring a Contractor is the cost-effective solution for a low amount of electric work. Sure, landlord-tenant relations can have all Complainers. But when you have the responsibility to find solutions, then you become a Solver. Your gripe shows you have little business understanding. Every business strikes a balance between
employees and contractors, either extreme (all employees, all contractors) doesn't work.

I'm not going to defend a person doing something dangerous, such as force overriding a safety device (a circuit breaker) until the safety device broke, i.e., Darwin Award behavior. The circuits were not fried, only the circuit breaker needed replacing, no wiring was replaced.

As for one apartment affecting other, that's the way it works in high rises: many of the systems are shared across multiple apartments. If the water needs to be off in apartment 301, then it will be off in all the x01 apartments.

You say "the designers of IH could not figure out a way to provide a regular door on bathrooms because the units are small in size and resorted to putting these sliding, or pocket doors on bathrooms instead", which is ridiculous. So an architect makes better use of space (more usable floor space) by using a different kind of door ... and there is something wrong with that? Obviously, you don't have an engineering/scientific mind. It's just emotional blather from you.

You say "You, OTOH, have become no more than a phony shill for Hirschorn. Just like Hirschorn you repeat how "great" the building is despite evidence to the contrary", but that is not true. The tenants have had several engineering studies, we advocated for a variety of improvements (some are already done, such as replacing the elevator). Eastwood was built cheaply, and upgraded cheaply (the *new* windows have problems), Island House was built for a middle income rental. Island House is not a new building, but a 35 year old building with its pros and cons. Collectively, we (the tenants) have plan to make the necessary improvements while maintain affordability.

It's not that I blindly support the owners in their positions, however the tenants do have common interests with the owner, and that has been the basis for a successful collaboration, and our 76% vote shows an overwhelming support for renters and buyers in that collaboration.

It seems to me, essentially, you can't imagine a relationship where the tenants and the owners have some common interests, so everything must be adversarial. Westview has taken that approach, and it has greatly detracted from their progress.

As I've stated many times, the tenancy is overwhelmingly supportive of the Affordability Plan and the process, i.e., it's not just my point of view, it's the view of the tenancy.

Frank Farance said...

CheshireKitty, you misunderstand the nature of the conversion and the nature of M-L itself. M-L, from a tenant perspective, is a formula for distributing costs fairly among tenants. For new buildings, the costs are low (along with low-rate mortgages and tax abatements) that has the important side effect: low rents, which support the societal goal of affordable housing.

As the building ages (say, 25-35 years), those costs become significantly higher has major subsystems need repair, upgrading, or replacement. Those subsystems can include: roof, skin, elevators, plumbing, electrical, HVAC, and so on. At some point, the cost of those repairs (which are distributed fairly among the tenants) start pushing the rents out of the affordable range for the tenants in their program. I've heard Westview tenants believe that approximately $25 million in repair/upgrade work needs to be done, which, spread over 5 years and 400 apartments, would be a rent increase of $1000/month. My point is: for middle-aged buildings, the M-L cost distribution method might raise rents significantly and actually reduce the amount of affordable housing .

Typically, M-L's exit and go market rate, which increases the cash flow of the building (paying for more costs), but significantly decreasing the housing stock.

The Island House Affordability Plan is different: (thumbnail sketch:) some of the apartments will be sold, which raises cash to fund the maintenance reserve, but some will remain rentals in a program similar to rent stabilization. One can argue (and it has been argued) that buyers will support the renters, but Island House tenants have strongly supported the idea that all tenants should be able to stay, either as a renter or as a buyer. Yes, there are imperfections in the Affordability Plan, but for most tenants: "Good Enough is, well, Good Enough".

So assuming a 70% subscription rate (note: I don't know what the actual rate will be), that will raise approximately $55 million. You speak of the owner with all sorts of theories, but you have it wrong: the tenants will be the owners and will have the primary say in how the building is operated. You really don't understand the conversion process.

You say, "Some residents resort to stuffing window insulation into the open wall within the door pockets - to no avail. That is how desperate they get to block up this open
space, which draws away air (heated or cooled) into the open wall.", but of course it doesn't have any effect because it's a stupid idea. The so-called open wall is actually sealed (just like a closet), and it is an interior wall. Really, it's that lack of scientific thinking that produces really dumb ideas you describe.

CheshireKitty said...

The tenants that do not buy their apts will remain tenants - continuing to pay rent to the owner. So not all current tenants become owners, and Hirschorn is not out of the picture unless he manages to sell all the apts. Maybe there will be a 70% subscription rate - that remains to be seen. Whatever the rate is in the end, the interests of the landlord (and he will remain the landlord as far as the non-buying tenants are concerned) remain as always - to make money off the property. It's not a philanthropic exercise - it's a money-making enterprise. IH residents will have to wait until sub metering is implemented to see its effects on the tenancy. Hopefully, by then, there will be an IHTA board in place to better represent the entire spectrum of IH residents.

CheshireKitty said...

I doubt you would say this if you didn't live in Westview and instead lived in the "cheap" housing projects you decry.

There is no "incentive" to have to live in most City projects. They aren't "great". Ever hear of the unemployment rate among project residents? Projects are more a last resort than a "preference".

You can blame the inferior public school system in NYC for the reason why there is an outsize unemployment rate among project dwellers. That school system has been cheated out of millions of dollars of aid they should have received and didn't. The results are directly translated into low graduation rates, and few graduates ready to go to college.

Don't blame the poor for living in the projects. They don't have a choice, if they have no jobs or money. Blame the public school system which continually fails the project kids, inevitably leaving another generation with no options other than to accept housing.

westviewgirl said...

I know so many that live in the projects, have good jobs and drive nice cars and dress better than I do..have an Iphone and ride the system and live very cheap here and are proud of it. In fact, some young girls will tell you they will have another baby so they can keep their apartment? What is wrong with this picture? A lot of the masses have learned how to work this city. They live with their parents till they are 30 and take over their parents cheap apartment rents and will live there and have children and teach them how to work the system. Anyone that works hard, can have what they need in life, maybe not everything they want, but they can have what they need. All the stuff this state gives out is bleeding those of us that work hard and pay taxes. Being poor is not a sin or wrong, but being lazy and a freeloader is just sad and a horrible life to live. That is all I am saying. Every apartment that is section 8 or affordable housing should be screened and monitored as to who is living there and who is earning a should be given to those that can should be given to those that cannot, or that are ill or sick and worked all their life and cannot now. Children should be fed, loved and well taught. I see so many young kids out during the day and I wonder why are they not in school? Why are they not working? This state of mind I notice in the youth of today is a sad thing. I am saying that living in the projects should be something to rise up out of, not teach the youth how to continue to accept living there and think that is a way of life.

CheshireKitty said...

This is neither here nor there. Many middle-class youth also return home after college, if they cannot find work or make a go of it living on a paltry, entry-level wage. It should be the dream of all to have a decent life, not have to live in subsidized housing and so forth - but that depends on turning out graduates that can compete with those from rich suburbs. And the competition among those in the suburbs is intense as it is. The City school must be brought up to the level of the schools in the suburbs meaning the education aid has to be more fairly divided. The project kids have the disadvantage of no enrichment - no context. What TV started for the previous generations, the internet and video games may complete: Turn kids into passive, obese, consumers of never-ending stimulation via a screen, or a smartphone.