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May 13, 2000 |
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 To the Editor: I read with interest Patrick Stewart's letter in the last issue of The WIRE criticizing the position of Roosevelt Islanders for Responsible Southtown Development (RIRSD) vis-a-vis the proposed Southtown plan. Patrick says that he likes his "facts up front." I agree and would like to lay out some facts for everyone's consideration. To begin with, he is correct that the developers' pro forma documents "clearly state the ground rental rates are a concession made by the State for 'affordable' housing." So let's look at just how affordable this housing is, and what kind of "concession" is being made. Fact: The projected starting rents for the 400 units planned for phase I (which is the only part of the development the developers are firmly committed to) are:
Fact: Unlike Island House, Westview and Eastwood, there is no provision for approval of rent increases by DHCR or any other State agency or commitment by the developers to maintain these rents at these starting levels. These projections are starting rents only. The developers will be free to raise the rents as they wish, i.e. as the market bears. In fact, the document confirms this by specifying how RIOC will share in future increases. They will share "by the same percentage that the project's actual residential rental income increases." So, if they choose to raise the rents another 20% (not such a stretch since that is roughly the level of Manhattan Park, which has been fully occupied since 1994), then the developers can reap additional profits of $1.32 million. This is in addition to their original projected yearly profit of almost a half million. And how much more money would go to RIOC to help fund current and additional community needs created by the increased population? It's a meager $31,000 - 20% of the ground rents paid by the developers to RIOC and a mere pittance of what Manhattan Park is paying. Of course, Patrick can argue that it is not a "fact" that the developers will raise the rents. Perhaps they will be kind-hearted souls and not raise the rents so as to promote and maintain "middle income families." Fact: The document in question states the "developer [is] to build out Phase I as residential rental units for middle income families [emphasis added] on Roosevelt Island." The same document lays out a plan for Phase I for 154 studios, 209 one bedrooms, 37 two bedrooms and nothing larger. This means 91%+ are studios and one bedrooms. Apparently RIOC and the developers see these apartments as family units. This stretches my imagination past its capabilities. Obviously Patrick has a much better imagination than mine. Perhaps, one of the readers of this letter can come to the aid of my limited abilities and help explain how these apartments are "units for middle income families." Fact: The developers are free to raise rental costs even more. There is no provision or statement by the developers that utility costs, particularly electric, will be included in the rents. They may very well be passed on to the renters, and could be significant. I should know. When I first moved to the Island, I lived in Manhattan Park, and there were occasions, not infrequently, when our electric bills were above $300 per month. If they are allowed to do this, as Manhattan Park is, and the market will bear it, as it does, what do you think they will do? I simply lay out the facts: rents set at the discretion of the developer, virtually no housing for families, token payments for substantially-increased community needs. A good deal for the community or massive boondoggle? You be the judge.
Lee Edelman, Member
We don't want to argue; we never did. But, we must respond to the "facts" in Patrick Stewart's letter in the last WIRE because the Southtown project is just too important to the Island. People need to know the truth. He contends that "roughly half of Southtown is committed to be middle income housing, as the General Development Plan (GDP) requires it to be." This directly contradicts the position of the Residents Association, of which he is President. One of the two reasons RIRA is intervening (joining) in the lawsuit filed by Roosevelt Islanders for Responsible Southtown Development (RIRSD) is to challenge this project because "the plan does not require the ratio of market-rate housing to affordable housing set out in Paragraph 1, Section 3 of the GDP." Mr. Stewart's assertion that Southtown "ground rent rates are in fact about twice what middle income buildings pay" completely ignores a significant element - Payment in Lieu of Taxes (PILOT payments - paid to the State). We can simply compare Phase I of Southtown with Island House; both with 400 units. Although Southtown developers will receive over 40% more rent, they pay a paltry $195,000 per year in ground rents and PILOT fees combined vs. approximately $550,000 per year assessed to Island House. And let's not forget that RIOC will fund this project with $4.5 million dollars in infrastructure costs just to get it started. Mr. Stewart has said many times that Roosevelt Island is virtually bankrupt. If he truly believes that, how can he justify this giveaway to the developers of priceless resources for so little in return? We believe it is monumentally irresponsible and it is a fundamental basis of our objection. Mr. Stewart also says he likes his facts up front. The facts seem clear to RIRA, RIRSD and both sets of highly accomplished attorneys who represent our individual and combined interests. The only one this appears to be unclear to is Mr. Stewart, and we think it odd that he would take a position so diametrically opposed to RIRA on such an important topic. One last point: Some facts have been pretty hard to come by. RIOC and its Board (of which Mr. Stewart is a member) had many of the financial specifics in 1998, yet they repeatedly told the public in 1999 that "no specifics were available." Thanks to documents obtained through our legal efforts, we can publicize this information as it does become available. This letter addresses only a few of the many reasons why the current Southtown plan is a bad deal for Roosevelt Island and its residents - that's a fact, Pat! RIRSD Steering Committee
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