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Wednesday, December 11, 2013

RIOC To Receive $1.4 Million Annual Payment For 55 Years From NY State And Cornell For Roosevelt Island Tech Campus Land, Maybe - RIOC Board Of Directors Meeting Tomorrow For Vote To Approve Or Not

Image of Goldwater Hospital/Future Cornell NYC Tech Campus From Google Maps

Reported December 10:
The Roosevelt Island Operating Corp (RIOC) Real Estate Advisory Committee is meeting for the second time in less than a week for an update on the negotiations with Cornell for the land controlled by RIOC which is part of the planned Cornell NYC Tech campus....

... ... All reports are that the RIOC Directors and staff are battling hard to protect the interests of Roosevelt Island in these negotiations with Cornell...
and updated later that evening:
It looks like an agreement has been reached between Cornell and RIOC subject to approval of the RIOC Board at the December 12 Directors Meeting.

Just received this Amended Agenda for Thursday's RIOC Board Of Directors Meeting which includes this addition:
... 7. Authorization to Enter into an Amendment of the Master Lease with the City of New York and to Take Related Actions in Connection with the Cornell Tech Campus Development, Including Making Environmental Findings and Entering Into a Development Agreement and Other Related Agreements (Board Action Required)...

Yesterday, I sent this inquiry to RIOC President Charlene Indelicato and the RIOC Directors:
I understand that RIOC and Cornell have entered into an Agreement for the land controlled by RIOC that is part of the proposed Cornell NYC Tech Campus on the current site of Goldwater Hospital.

The agreement is subject to approval by the full RIOC Board at the December 12 meeting.

I understand that the proposed agreement between RIOC and Cornell includes annual payments to RIOC of approximately $1.5 million from NY State, NY City and Cornell.

Is the above accurate?

Does RIOC have any statement on this proposed Agreement with Cornell?

Is there a deal term sheet that can be released to the public?...
It is true. RIOC, Cornell and NY State have agreed upon terms for the transfer of the land controlled by RIOC that is part of the planned Cornell NYC Tech campus subject to approval by the RIOC Board of Directors tomorrow (December 12).

The terms of the deal are presented in this December 10, 2013 Memorandum (Memo) from the RIOC Staff to the RIOC Directors. According to the Memo (Page 3):
This Memorandum and the transactions described herein have been facilitated by the Empire State Development staff...
Here are excerpts from the Memo (Page 6-8):
... TERMS OF THE TRANSFER
A summary of terms set forth below have been agreed upon by RIOC, the State, Cornell, the City in exchange for RIOC surrendering the Parcel back to the City. Many of the non‐financial terms reference Cornell’s commitments made in its letters to David Karnovsky dated March 19, 2013 (the “Karnovsky Letter”) a copy which is attached hereto as Attachment C and Jessica S. Lappin dated May 2, 2013 (the “Lappin Letter”), a copy which is attached hereto as Attachment D:

RIOC CONTRIBUTION
  • Surrender of the 2.6 acre RIOC site surrounding the City Goldwater Site (the “Parcel”) under the Master Lease to the City to be incorporated with the City Goldwater Site to comprise the 12.4 acre Campus. The City will lease the Project Site to New York City Land Corporation for 99 years which will assign the lease to Cornell.
  • RIOC commissioned 2 appraisals for the Surrounding Site which valued such site at $24 million (“Haims Appraisal”) and $90 million (“KTR Appraisal). The Haims Appraisal has been assessed as more credible for several reasons.
STATE CONTRIBUTION
  • (i) $1,000,000 annually for 55 years payable to RIOC (escalating 2.5% every 10 years) in accordance with State budgetary procedure, or
    (ii) an equivalent amount to support capital infrastructure improvements on RIOC as determined in accordance with State budgetary procedure.
CORNELL CONTRIBUTION
  • $400,000 annually for 55 years payable to RIOC (escalating 2% every 10 years).
    Execution of a Development Agreement with RIOC evidencing this payment plus the following material commitments to be implemented by or on behalf of Cornell at Cornell’s sole cost:
    ‐Mitigation under SEQRA identified in RIOC findings statement and other materials2;
    ‐Mitigation under SHPA;
    ‐Infrastructure Improvements on, around, and under Loop Road (includes roadway work, sewers, relocation of electrical duct banks, and gas service);
    ‐Parking commitment3;
    ‐Red Bus commitment during construction4;
    ‐Barging where feasible5;
    ‐Access to the RIOC premises under permits and License Agreements providing work plans, bonding and insurance, and incorporating construction protocols, all approved by RIOC;
    ‐Construction and truck trips on and off Roosevelt Island may occur between 7 am to 6 pm to coincide with standard NYC Department of Buildings (“DOB”) hours; variances from such will be approved by RIOC in its reasonable discretion;
    ‐Air and Noise Pollution Mitigation;
    ‐Payment for RIOC Engineer and RIOC Consultant to review Work Plans for work to occur on the RIOC Premises and to monitor performance of work by Cornell or its agents pursuant to Work Plans;
    ‐Ensure Safe Pedestrian and Vehicular Access to areas south of the Cornell Site (RIOC’s request for in‐bound access was not agreed to);
    ‐Repair of damage on Roosevelt Island caused by Cornell or its agents;
    ‐General indemnification for work performed by Cornell or its agents;
    ‐Environmental indemnification for environmental liabilities caused by Cornell or its agents; and
    ‐Increased security by Cornell at southern end of Roosevelt
CITY CONTRIBUTION Via (NYC Economic Development Corporation (“EDC”)
  • Execution of a Side Letter between RIOC and EDC evidencing the following payment and commitments by the EDC:
    ‐$70,000 in payment for one‐time legal fees accrued by RIOC for SEQRA related issues in connection with the transaction.
    ‐NYCEDC, in its role as lease administrator, agrees to meet with the Roosevelt Island Operating Corporation (“RIOC”) on a quarterly basis, beginning on or about February 14, 2014 until completion of the Full Build as defined in the Cornell Lease, in order for RIOC to have the opportunity to brief NYCEDC on Cornell’s compliance (or lack thereof) in connection the commitments set forth in the Lappin Letter in Paragraph A (Construction Practices), Paragraph B (Security), Paragraph C (Parking), Paragraph G (Barging), Paragraph H (Red Bus Service), Exhibit A (Construction Noise Control and Air Quality), the “Construction Measures” portion of Exhibit B, and the “Parking” portion of Exhibit B.
    ‐Pursuant to such briefings, if RIOC disagrees with NYCEDC’s enforcement of a commitment that Cornell has made through the Lappin Letter, RIOC, in its sole discretion, has the right to commence mediation with the Governor’s Office and the Mayor’s Office to reach a resolution, which mediation shall promptly commence within five (5) business days from the receipt of the written request from RIOC.
    ‐If RIOC disagrees with NYCEDC’s enforcement of a commitment in the interim period between quarterly meetings with NYCEDC, RIOC, in its sole discretion, has the right to mediation with the Governor’s Office and the Mayor’s Office, which mediation shall promptly commence within five (5) business days from the receipt of the written request from RIOC.
ESD CONTRIBUTION
  • ESD is waiving its fees in connection with facilitating the transaction....
Also (Page 4-5)
...In accordance with the Public Authorities Accountability Act, as most recently amended (“PAAA”), two appraisals of the Parcel have been prepared. Jerome Haims Realty, Inc., an independent appraiser, appraised the fair market “as is” value at $24,000,000 as of March 8, 2013. KTR Real Estate Advisors LLC, an independent appraiser, appraised the fair market “as is” value at $90,000,000 as of May 22, 2013. The Haims appraisal has been assessed more credible than the KTR appraisal because the Haims’ appraisal is based on residential development that would have been allowed by zoning prior to the creation of the special zoning district for the Project. Moreover, the Haims appraisal discounted for the irregular shape of the Parcel, whereas the KTR appraisal did not.
A footnote adds (Page 5):
... Both appraisers use a Sales Comp approach, and although they use different comps, both conclude at a value of $125 per SF of developable area (“DA”). They also agree on total lot size at 113,912 SF. Therefore, the vast value difference is based on (1) Haims’ use of a residential zoning FAR, which is more credible given the prevailing development character of the Island and (2) Haims’ finding that the “highly irregular in shape [of the parcel, which] could not be developed to maximize all of its development potential independently”, and therefore, by analogy to TDRs, makes the 50% discount...
One area that may be of concern to RIOC is that the NY State contribution of $1 million over 55 years or equivalent contributions for capital infrastructure improvements appears conditioned upon being:
... in accordance with State budgetary procedure...
What does that mean? Can NY State decline to make payments to RIOC or are such payments guaranteed?  That provision needs to be better understood.

Also, shouldn't NY State be making capital infrastructure improvements on Roosevelt Island as needed whether or not Cornell builds its campus here? Why should Roosevelt Island capital improvement paid for by NY State be included as payment for the land to be used by Cornell NYC Tech?

There's much more in the Memo including issues related to construction, barging, trucking, air quality etc. Click here to read the whole Memo.

The RIOC Board of Directors will be voting on this proposed Agreement tomorrow during their scheduled December 12 meeting to be held at the Manhattan Park Community Center, 8 River Road starting at 5:30.

Should be a very interesting meeting.

Stay tuned.

UPDATE 12/12, 7:50 PM - The RIOC Board of Directors unanimously approved the Cornell NYC Tech project about an hour ago.

However, that approval was made contingent upon NY State signing a memorandum agreeing that the net present value of NY State's 55 annual $1 million payments to RIOC, as outlined in the December 10 Deal Sheet Memo, will instead by fully paid by December 31, 2018. The Memorandum is anticipated to be signed within the next few days.

More to follow.

UPDATE 12/18 -The funding memorandum was signed by both NY State (ESDC) and RIOC on December 16. More here.

17 comments :

CheshireKitty said...

Although it does seem strange that NYS mostly pays a NYS agency, instead of the City or Cornell, as long as the money (the million annually from NYS to RIOC for 55 years) is a sure thing, that's quite an accomplishment by Ms. Indelicato and her team! Ditto on the payment (.4 mil annually for 55 years) from Cornell! RIOC could certainly use the money!


Indelicato drove a hard bargain and did extract some hard-hitting and meaningful concessions from Cornell, in addition to the money, in return for the land Cornell wanted. The highlights cited in the blog article look fantastic albeit IMO it might have been preferable to force Cornell to barge 100% and have more air pollution monitoring.


Gov. Cuomo's decision to appoint Indelicato, who has a lot experience in development issues, paid off, as she did not give in and was able to satisfactorily and expertly direct the course of the complex negotiations to the island's advantage! Bravo Indelicato!

wtlong said...

This agreement, as presented, is a win for the Island. Congratulations to Ms. Indelicato and RIOC staff as well as to the RIOC Board. Congratulations as well to RICC. To read most of the coverage and commentary until now, it seemed as if RICC was ineffective. This agreement, however, addresses the major concerns that the community raised. Furthermore, this agreement confirms the benefits of resident RIOC Board members. I doubt a Board composed entirely of non-residents would have gotten this agreement.

Bill Blass said...

Kitty when you walk the streets of new york how offend do you see white people socializing with black people. How about when you walk into a restaurant. GO to see a movie. Be honest

RooseveltIslander said...

The RIOC Board of Directors unanimously approved the Cornell NYC Tech project about an hour ago.



However, that approval was made contingent upon NY State signing a
memorandum agreeing that the net present value of NY State's 55 annual
$1 million payments to RIOC, as outlined in the Memo, will instead by
fully paid by December 31, 2018. The Memorandum is anticipated to be
signed within the next few days.

OldRossie said...

I guess you don't get out much, Bill.

CheshireKitty said...

They hang out together - the world you grew up in has vanished.

The better question might be, how many immigrants from S. Asian, Asian, or Latin America do you see hanging out with non-immigrants of any ethnic background? The answer is, like all immigrant groups, given the language barrier/possible cultural/religious differences and so forth, of course members of each incoming group initially cling to one another. That tendency usually evaporates soon enough even within the immigrant population; descendants are then absorbed into the mainstream of the pre-existing population, be it black, Latino, Asian, or white.

Incidentally, the rather artificial "divisions" always work in favor of the 1%, to keep the 99% mistrustful and divided: To keep the "game" of playing "groups" off each other, "differences" must be maintained or even emphasized. The more "differences" the greater the chance of "misunderstandings" and consequent "resentments". The "groups" can then be manipulated to the advantage of the 1% - as in "divide and conquer". Did you ever consider that what you are suggesting is exactly what the powers-that-be want, so as to deflect the population's attention away from the real issues of income inequality, lack of affordable housing, how the global system of free trade tends to favor profits over people, and so forth? The population that blames each other - irrationally - for society's problems, is not blaming the real culprit: The 1%.

As far as my direct experience with restaurants and movies, please keep in mind that, in general, kitties do not usually walk into restaurants or go see movies.

Bill Blass said...

Kitty do you watch the veiw on a b c when that fat woman sherry got married Elizabeth was the only while woman in the bride s pary.all the others were black.thats because the only reason they are friends is because their job brings them together. See most blacks and white are brought together because the job brings them together.you know I know what i am saying is true.

OldRossie said...

Again, what on earth are you babbling about!?! First, this is a post about a fruit stand. Second, now I take personal offense to your nonsense about Asians, immigrants, and any relationship you try to draw to income. Your ridiculousness has no basis, and knows no bounds. Please, for the benefit of anyone bored enough to read your crap, take it elsewhere, or keep it to yourself.

CheshireKitty said...

OR: It doesn't matter what the post is, or rather, was about, originally: On the post, Bill has commented as follows:
"The people living in south town and octagon are hicks" and "when you walk the streets of new york how offend do you see white people socializing with black people?"


First, I disagree that internal migrants - folks migrating to NYC from the South or Midwest - are that "different"; both they and immigrants to NYC from around the world are soon absorbed into mainstream NYC, the pre-existing population that consists of all ethnic groups.


The point is, "differences" are "emphasized" or "played on" by the 1% - to foment mistrust, misunderstandings, and resentment - according to the well-known doctrine of "divide and conquer." As long as "groups" eye each other with suspicion, they do not eye the 1% and justly try to correct the unequal balance of political/economic power, right?

OldRossie said...

Wrong. Or rather, right, in your crazy little world.

CheshireKitty said...

Wrong? You don't think the 99% is weaker when it's divided?

Mickgirl said...

You are the reason New Yorkers get a bad rap. Shame on you!

"Us and Them" said...

Exactly. And the Korean deli is amazing, they should come and check it out. Their pizza is great, brick oven and made out of high quality ingredients. It's delicious!

"Us and Them" said...

The wait time on sandwhiches and cam cheese bagles was always a problem at Riverwalk.

"Us and Them" said...

The pizza at Wholesome Market is pretty great! Beats the only pizzeria on Roosevelt Island. Ha!

"Us and Them" said...

Love them!

"Us and Them" said...

Sac's place is also great! Great pizza.

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