New York State Public Authorities Reform Act Passes Assembly - How Will It Impact Roosevelt Island?

Image of NY State Capital From Lehman.cuny

According to The Gov Monitor:

... Governor David A. Paterson and Legislative Leaders today announced an agreement on legislation to reform New York’s public authorities. The measures include the creation of an independent Authorities Budget Office with expanded regulatory responsibilities and subpoena power to improve the oversight of authority operations.

The New York State Comptroller will also be empowered to review certain noncompetitively procured contracts for more than $1 million. The reforms, while raising transparency standards, will maintain the authorities’ ability to promote economic development.

“For too long, public authorities have operated in the dark, under little or no public scrutiny. Today, we turn the lights on,” Governor Paterson said. “The reforms will ensure that authorities have an independent auditor to examine how they operate and that they best serve the interest of the public....

CBS 6 adds:

... There are more than 700 public authorities operating in New York State generating more than $140 billion dollars in debt and the State Senate is expected to soon consider legislation that would reign in and reform these authorities to protect the taxpayer.

Brodsky said the legislation "creates a new cop" when it comes to public authorities....

The Roosevelt Island Operating Corp. (RIOC) is one of those NY State Public Authorities and I asked Assemblymember Micah Kellner how this legislation will impact Roosevelt Island. Mr. Kellner replied:

Yesterday the Assembly passed the Public Authorities Reform Act of 2009. This bill included several major reforms that will have significant impact on RIOC.

• Subject board members to oath of office or acknowledgement of fiduciary duty to the authority;
• Dramatically expand the powers of the independent Authorities Budget Office (ABO) within the Department of State and make all ABO information available to the public;
• Require authority boards to establish finance committees to review proposals for debt issuance by an authority and its subsidiaries and make recommendations;
• Subject state and local authorities to additional reporting requirements, such as authority board performance evaluations
• Give the State Comptroller the power to pre-approve state authority contracts valued at over $1 million that are not competitively bid and contracts that are paid with the state funds appropriated to the authority;
• Establish rules governing and limiting the creation of subsidiary public corporations and authorities;
• Authorize the disposition of property below market value when the transfer is to a government or public entity and the purpose of the transfer is within the mission of the authority;
• Require state authority contracts to comply with the minority and women-owned business enterprise (MWBE) statute;
• Provide whistle-blower protection for employees of public authorities, to protect those individuals who report wrongdoing

I later asked Mr. Kellner:

how this legislation specifically impacts disposition of Roosevelt Island real estate? For instance the current ability of RIOC to lease Main Street Retail shops or the possible selection of private sector Master Leaseholder for Main Street retail shops.

Mr. Kellner replied:

The Public Authorities Reform Act of 2009 clarifies the 2006 law when it comes to the disposition of property. The 2006 law allowed for the disposition of property below fair market value when it was determined to be for the public good. The 2009 law allows for the disposition of property below fair market value when the reason for such disposition was within the mission of the authority. What had been previously been at issue with the retail spaces was how to determine their fair market value, that has been resolved and RIOC has an appraisal. Now that there is an appraisal for the retail spaces RIOC should have no issue in leasing them under the old or new law.

Globe Street has more on Public Authorities Reform Act's impact on sale of real estate by Public Authorities:

The state Assembly’s passage of a modified bill to reform as many as 1,098 public authorities throughout New York State drew plaudits from Mayor Michael Bloomberg, who expressed relief Wednesday afternoon that the revised legislation no longer prohibits the authorities from making any land sales at below-market rates, as an earlier version of the measure did...

What are the chance's of this legislation passing? According to CBS 6:

It is unclear how the bill will fare in the Senate and whether Democrats will have enought votes in the Chamber to push the legislation to Governor Paterson's desk.

UPDATE - 12/3 - According to the NY Times the legislature finally passed the Public Authorities Reform Act:

... “This is the most fundamental reform of state government in decades, and it’s a blueprint for further reform of state government,” said Assemblyman Richard L. Brodsky, a Westchester Democrat who championed the legislation. Senator Bill Perkins, a Harlem Democrat who sponsored the legislation in the Senate, said, “For too long public authorities have operated as a ‘shadow government,’ ” adding that the legislation would “make them more responsive to the needs of the public.”

Elizabeth Lynam, deputy research director of the Citizens Budget Commission, a nonprofit organization, was less moved, calling it “a middle-of-the-road package.”

“It will marginally improve transparency and reporting requirements without tying the hands of authorities too much,” she added....