Roosevelt Island Mitchell Lama Island House Residents Urge NY State Governor Andrew Cuomo and RIOC To Support Affordable Housing and Preservation Privatization Plan - $20 Million To RIOC, $15 Million More For NY State, RIOC Board Meeting In Executive Session This Afternoon To Discuss
Image of Roosevelt Island's Island House EntranceAmong the items on the Agenda for today's 5:30 PM Roosevelt Island Operating Corp (RIOC) Board of Directors Real Estate committee meeting is:
... 3. Chair’s Motion for Executive Session to Review and Discuss the Status of Privatization/Affordability Plan and Ground Lease Extension for Island House.As reported in post earlier this week:
... Not much is known publicly about the Island House privatization because these discussions are held in Executive Session meaning that that they are secret. More information on RIOC and NY State Executive Session policies from previous posts....We now know a bit more about what is happening with Roosevelt Island's Mitchell Lama Island House privatization. An Island House resident describes their privatization plan as:
The Island House affordability plan preserves 400 units of housing, allows existing tenants to choose to buy or continue to rent at affordable rentals with NYC Rent Guidelines Board increases. No one would be kicked out. Furthermore, it involves paying the State (DHCR and ESDC) $35 million, which is a substantial payment for an affordable housing development. Compare the $11 million payment for Octagon in its 500 units of market-rate housing, or the zero dollars proposed by the Rivercross privatization.Below is:
- letter dated December 19, 2011 from the Island House Tenants Association to NY State Governor Andrew Cuomo urging support of affordable housing and Preservation Privatization Plan,
- January 3, 2012 Island House Tenants Association Newsletter updating residents on the plan,
- December 8, 2011 Notice of Intent To DHCR withdrawing from Mitchell Lama Program by Island House owner David Hirschorn of North Town Phase 11 Houses and
- January 10, 2012 DHCR's Notice of Owner's Filing of Notice of Intent to Dissolve.
Island House Tenants Association letter to Governor Cuomo:
Re: Affordable Housing & Preservation PlanJanuary 3, 2012 Island House Tenants Association Newsletter:
Island House – Roosevelt Island
Dear Governor Cuomo:
I write to thank you and your staff, especially Leecia Eve and Tony Giardina, for the hard work they have done in moving forward the Island House Affordable Housing and Preservation Plan to a point where few, if any, substantial issues remain. Now we need your help to bring to closure the multi-year negotiations that will if consummated, protect our interests and those of future generations of Island House residents, but if left to languish, would expose the tenants to significant jeopardy despite many years of hard work and cooperation among the landlord, tenants, DHCR and other NYS agencies.
Working under the auspices of DHCR for several years, the tenants and owner have crafted a groundbreaking Plan that, first and foremost, secures aggressive rent protections and affordability for tenants who wish to stay and not purchase their apartments while allowing tenants who wish to buy their apartments the opportunity to do so at a 65% discount below market pricing, with additional provisions to ensure affordability for future generations of purchasers. This Plan was overwhelmingly endorsed by the tenancy in a building-wide vote in September 2009.
Through the efforts of your Office for Economic Development, which has been engaged for nearly a year, the tenants and owner have recently agreed to substantially modify the previously agreed upon Affordability Plan in a way that is projected to result in payments to RIOC of over $20,000,000. This is in addition to the $15,000,000 or more that will be paid to ESDC from increased real estate tax payments under the Plan. In addition to these payments aggregating in excess of $35,000,000, ESDC will also be promptly repaid the full outstanding mortgage of $20,000,000.
But all of this is in jeopardy; having waited for many years, the owner has just filed its notice of proposed dissolution with DHCR, the first step in converting the building to a market rate rental. While he has made it clear that his intention is to proceed with the Affordability Plan -- should the Plan fail, he does have the right to withdraw in favor of a market rate plan. This would be a disaster for the tenants.
Accordingly, we implore you to direct the State agencies necessary for the implementation of the Affordability Plan (RIOC, ESDC and DHCR) to take immediate action to complete the approval process and immediately enter into the requisite lease modification agreement (a draft of which has been in State hands for nearly a year).
The revised Plan, as most recently negotiated by your staff, strikes a proper balance and provides New York State with substantial revenues while also preserving the State’s dwindling affordable housing stock and allowing low and middle income families a once in a lifetime opportunity for home ownership. There is just no reason that this deal should not be implemented now.
We look forward to joining you in announcing the State’s success in preventing the loss of middle income housing through this creative and pro-active public private partnership.
Please do not hesitate to contact me if you require anything further.
Very truly yours,
Island House Tenants Association, Inc.
Update on Island HouseIsland House owner North Town Phase 11 Houses Notice of Intent to withdraw Island House from Mitchell Lama program:
First of all, Happy New Year to you and your families.
We wanted to update you on where things stand with our affordable housing and preservation plan. Over the last couple of years, since winning the overwhelming support of the tenancy for the Island House Affordable Housing and Preservation Plan, we have been working to resolve what revenues the state will receive under the plan prior to getting final RIOC Board approval on the ground lease extension required by the Roosevelt Island Operating Corporation. We have reached a critical point in this process.
The good news is that, overall, the process is moving but we are concerned that we are at point where it may be stalled in this last stage. The owner has spent the last few months negotiating additional payments the State is seeking from the plan directly with Governor Cuomo's office. Attached is our recent letter to the Governor urging his support and we deeply appreciate the efforts of his office, as well as our local elected officials.
It is now critical that we keep the momentum going. Over the last few weeks, together with the Governor's office and the Dept. of Housing and Community Renewal (DHCR), the owner has been working directly with RIOC's CFO Steve Chironis to move ahead with a ground lease vote as soon as possible. We are concerned that RIOC may unduly delay the process of presenting the plan to the RIOC board to get an expeditious vote and allow an offering plan to be submitted to the Attorney General's office for his review.
There is an added urgency, as the owner has officially notified DHCR his intent to file to begin the process of removing the building from Mitchell Lama, per the attached letter. In itself, this is an expected part of the process required for the transition out of Mitchell-Lama to the Affordability Plan and in his letter to DHCR the owner makes clear this is his preference.
That said, if the ground lease process fails, the ownership also makes clear that they reserve the right to option B, which is proceeding with a plan to turn the building into a market rate rental. That would be a disaster for us. While obviously we and DHCR would fight any attempt to implement option B, the reality is that we may not succeed in ultimately preventing that scenario in a worst case situation.
We have spent four years negotiating and getting an unprecedented level of support and approval from every key state agency that recognizes the unprecedented protections and affordability our plan represents for current and future tenants of Island House. We are doing all we can to ensure that RIOC understands the ramifications of not acting swiftly — especially at a point where interest rates remain low providing additional affordability for buyers — including mobilizing the tenancy to express our collective frustrations in the next few days and weeks if the process stalls. We are closer than we have ever been to finalizing a process that has already taken too long, and it is time to ensure that the hope and promise of affordably protecting our homes becomes a reality.
and DHCR's Notice of Owner's Filing of Notice of Intent to Dissolve.
More on the privatization of Roosevelt Island Mitchell Lama building from previous posts here and here. Also here is letter dated February 26, 2010 from Roosevelt Island's Rivercross Mitchell Lama Coop Board to Empire State Development Corp explaining the proposed Rivercross privatization plan. There does not appear to be any similar payment to RIOC in the proposed Rivercross Privatization as the $20 million dollar payment described in the Island House Privatization.
