RIOC Responds to Roosevelt Island Tennis Club Inquiry

RIOC President Steve Shane sends the following response to yesterday's post about the RIOC Board of Directors Real Estate Development Advisory subcommittee meeting today concerning the lease for the Roosevelt Island Racquet Club.

Mr Shane writes:

Your blog is misinformed. The present license arrangement extends until
April 30, 2031. Those arrangements were made in December, 1998.
HCK is the predecessor in interest of Roosevelt Island Racquet Club
Associates.
Why would you presuppose that the Board will act hastily?
Other uses than for public purposes(here recreation purposes) are not
on the table under the GDP, no matter how valuable a piece of property
this may be. RIOC and the community have already been down that road. If
the license were to be terminated other than for public purpose/park
like purposes, substantial "taking" compensation would be owed to the
operator to compensate for the very substantial investment made in the
present enterprise.
Island residents are entitled to a preferrential rate for utilization
of the courts.
Substantial income (more than $250,000 per year) is derived from this
source.
This License arrangement was executed first in 1989. While
theoretically a present disposition, as a terminable license, being
extended on a present facility, we take the position that it does not
require the Public Authorities disposition process. Similarly with the
existing stores on Main Street. Were any substantial modifications of
the use to take placeRFPs, appraisals, etc. would all be required.

Stephen H. Shane
President & CEO
Roosevelt Island Operating Corp.

My response:

Thanks for your response and the information provided. I am out of town and unable to post it today but will post your message in full tomorrow.

However, I do not think that this post or the "blog is misinformed". I did not make any factual statements other than the existence of the Real Estate committee meeting and my belief that HCK Recreation is the Roosevelt Island Racquet Club, which for purposes of the post, is clearly accurate since as you state they are the predecessor in interest to the current tennis club. Also, data provided here clearly indicate that HCK does business as Roosevelt Island Rackett Club.I do not think my use of the word "Racquet" rather than "Rackett" rises to the level of the blog being misinformed in this context though I admit it may fail the particularities of identifying the proper legal entity involved.

The use of the term "hastily" is not a matter of informed or uninformed but merely a hope that the board will at least consider other options and be fully informed themselves prior to making any decision. No disrespect was meant by the use of "hastily". Though I could be wrong, your message appears to suggest that other alternatives to the current tennis club occupants have not or cannot even be considered.

As to your point regarding termination of the license and a "substantial taking " compensation that would be owed in that event - I will leave it to the real estate lawyers to interpret the applicable law. I would question however, given today's commercial real estate market if $250,000 in annual revenue is indeed substantial or even market rate income.

Also, I seem to recall, but am not positive, being told by someone from a previous RIOC administration that the license was terminable under certain conditions. Is that now or was it ever true?

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The great think about blogs is that they are self correcting by their readers. I am happy to correct any error that I am responsible for.

Again, thank you for your openness and responses to these issues of concern to Roosevelt Islanders.
I would add that by doing some quick back of the envelope calculations, the Roosevelt Island Racquet Club must occupy (approximately) at least 10,000 sq. ft. If they are paying "more than $250,000 per year" for a license fee as Mr. Shane states, assume $300,000, (there may be some form of percentage fee as well) than they are paying approximately $25-30 per sq. ft. for their premises. That seems on the low end of the current commercial real estate spectrum. At the very least, exploring other potential alternatives seems to be a reasonable option and I fail to see what harm might occur if the RIOC Board takes a course of reasoned deliberation.
Also, as an aside, the "the preferential rate" provided to Roosevelt Islanders for use of the tennis courts is not such a great benefit to Island residents as to forego exploring the potential for other recreational, cultural or entertainment uses
Image is from the Tennis Channel.