I don't think he believes that that kind of legislation is... with the debt outstanding, that's not going to happen.

Lee Edelman:  It's not going to happen or he doesn't want it to happen?

Kayser:  It's not him, I certainly wouldn't say he doesn't want it to happen.  It's just... if you just abstractly look at the question of responsibility and accountability and you have debt outstanding you're not going to... it's like putting the fox in with the chickens concept... it's not, I mean, the State is going to keep control of things as long as there's debt out there that's owed to the State.  It's not collateralized by any other thing but operations.  There's no specific lien on anything with respect to that debt.  It's a purely operational situation.

Joyce Mincheff:  Are you saying that the revenues generated on the Island are paying down that debt?

Kayser:  Some of them are, actually, but very little of it.  But there's other debt out there that is just sort of hanging over this operating that under the current situation is not going to...

Lee Edelman:  What other debt is there?

Kayser:  You know something, as I said to Dick, there's a [Revenue] Allocation Agreement which I've asked for and I don't have yet.

Edelman:  I have it.

Kayser:  The Allocation Agreement?

Edelman:  The Allocation Agreement, the first amendment, the second amendment.

Kayser:  And what does it say?

Edelman:  Well, basically it says that the main ones, the allocation agreement... if you want, I can fax it to you tomorrow.

Kayser:  I would appreciate it.  I've been trying to get my hands on it.

Edelman:  The revenue allocation agreement basically says that RIOC keeps all funds for operations.  After it meets operation needs, it pays down the debt.  And operations needs are defined very broadly including maintenance, and...

Kayser:  Does it define how much debt is outstanding? Is there a number...

Edelman:  Well, it did at that time.

Kayser:  OK, that's the number I'm trying to see.  What is that number?

Edelman:  Also there was interest accruing, I believe, at 5.5% a year.

Kayser:  What is the principal amount of the debt outstanding.

Edelman:  At that time I believe, just going from memory, $156 million.

Kayser:  OK, that's the number I've been trying to get my hands on.

Edelman:  Before you leave, give me your fax number.  I'll fax it to you.

Kayser:  Now that's debt that's owed to the State.

Edelman:  That's owed to UDC, well, Empire State [Development Corporation].

Kayser:  Yes, Empire State [Development Corporation].  Basically, the State.

Edelman:  But it's very clear...

Kayser:  I understand what they've done.  The debt's out there.  It hangs over you, from day-to-day operations you don't have to pay it.

Edelman:  But day-to-day operations is defined very broadly.

Kayser:  I understand.

Edelman:  And also it defines that any additional revenue coming from ground leases above where it is now will go to RIOC, not to Empire State.  And also any revenue from the minischools will go directly to RIOC and not to...

Kayser:  OK, and what does it says as to how eventually that debt, the $156 million, is to be treated?

Edelman:  It doesn't.

David Bauer:  It's an obligation of the State.

Mincheff:  Those are UDC bonds, not Roosevelt Island bonds.

Bauer:  It's not an obligation of this Island.

Edelman:  They were general revenue bonds that were...

Kayser:  I understand...  There's some...  I've got to look at the agreement and do an analysis.  I understand...

Edelman:  I understand...  I was told that they are general revenue bonds.

Bauer:  General obligation bonds.

Mincheff:  Well, which is it? There is a major difference.

Bauer:  OK.  We'll have to look.

Mincheff:  They are general obligation bonds, from what I understand.

Kayser:  What they are is they are revenue bonds but they're not specifically lined up on any property.  They are not general obligation bonds, they're general revenue bonds, I think would be a proper...

Mincheff:  there's no such thing.

Edelman:  the point is it's not...

Kayser:  I understand...  It's a hybrid concept...  Well, it's not a revenue bond that's lined on a specific...

Mincheff:  It's not a revenue bond, sir, it's a general obligation bond.  It's...

Kayser:  Of what?

Mincheff:  It's a general obligation bond, a UDC bond.

Kayser:  that's not a general obligation bond.  A general obligation bond is a general obligation of a...

Bauer:  Full faith and credit...

Kayser:  ...full faith and credit of the State...

Mincheff:  It was UDC.

Kayser:  Well, that's not a general obligation of the State.

Mincheff:  Excuse me, but it was issued by the State.

Kayser:  that's right.  Makes it a revenue bond.

Mincheff:  No, a revenue bond would be if it's paid off by the revenue generated on Roosevelt Island, which it's not.

Kayser:  We're talking past each other on these things here...

Edelman:  It's not an important issue.

Linda Heimer:  Let's continue...

Kayser:  Anyway, I've been trying to get my hands on it and I want to find out exactly what the debt.  What people on the State side feel is hanging over Roosevelt Island in terms of the principal amount of the debt.

Edelman:  I'll be happy to fax it to you.  As I've read it, and I've read it over several times as it becomes fuzzy...  It's very clear that the Island owes nothing to the State until all operations are taken care of, and operations are defined broadly.

Kayser:  that I understand.

Edelman:  And as I read...

Kayser:  What we're thinking about doing here, and what I need to worry about and concern myself with, is we are selling subleases on different interests.  That's what that resolution was at the Board meeting.  We're planning rather than the way that this operation has worked on the past, which has worked I think to the detriment of everybody out here in terms of the economics.  In other words, what has happened in the past is they've put out Requests for Proposals, and then some developers come in with their particular plans, and then they select some developer based upon some subjective concern and then they negotiate with the developer for some base rent to be paid over time, and the Corporation has assumed the risk of whatever the project was, and whatever rent was negotiated, there's no benchmark against which really to determine whether or not you're getting fair market value.

So, rather than do what has been done in the past, the idea is to get money, the capitalized stream of value, over the next 68 years, [through a] 68-year sublease, up front.  And the plans have to be in conformity with the General Development Plan, the development, whatever's being put in the space that's being where the sublease is going to be sold, has to be in compliance with the General Development Plan and the Lease with the City, and it also subsequently when the plans are approved it has to pass the environmental review of the Board.

Matthew Katz:  But how would this plan enfranchise the residents more than the current system.

Kayser:  Well this particular thing doesn't, and I'm not claiming that it does.  There are different components.  Ultimately, the idea is to get rid of RIOC, and substitute in its stead the Island in control of itself through these institutions that would be developed and fashioned, tailored, the ones I had referred to before, the special relationship with the community planning board where you have a special sort of home rule arrangement within that community planning board.

Mincheff:  It was my impression that you had indicated that you would basically sell off the parcels and let the market determine, rather than the GDP...

Kayser:  Yes, I'm getting whiplashed intellectually here, you know, I'm talking about different things...  people are, I mean...  There are two separate components.  Home rule is one thing.

Mincheff:  No, I'm not speaking about that.

Kayser:  I know you're not.  But I can't respond to everybody at once.

Mincheff:  No, I thought [UNINT]...

Kayser:  No, I was asked what institutions I was referring to... The institution I'm referring to is a BID, Business Improvement District, or an RID, Residential Improvement District, or some hybrid thereof.  Were you here when I was saying that I had meeting with the Borough President's office on this.

Mincheff:  Plus the Community Board, or one or the other, or two...

Kayser:  You talking about the community planning board? I don't know what you're...

Mincheff:  Well...

Nurit Marcus: 

Why don't we let Mr. Kayser just go and say...

Kayser:  The idea is...  None of this stuff is...  Nothing is in concrete.  All this is being thrown out for purposes of debate, discussion, and feedback.  The idea...  I'm giving a...  These were some ideas that we had already discussed with Maple Tree Group initially, but the difference is that we now have had some discussions with the Borough President's office, so I can report back that they are sympathetic to this; they are receptive, and if we fashion some things together out here, I have every reason to believe that because there's agreement in principle, in the Borough President's level, which is the operations that...  That's the political operation of the City government, which would pass upon this in terms of BIDs and RIDs...  That's the Borough President's office where you negotiate to set up these things, and the planning board, because that's...  the Borough President appoints those people.

Bauer:  Mr. Kayser, what would be the advantage of...  I don't know quite what the right words are...  becoming part of the City again.  The City presently provides us with a number of services -- police, fire, sanitation, water, sewer, schools, library, some of the street lights.  We are a part of the City.

Kayser:  Right

Bauer:  The idea of the community as it was established at one point was that it would provide some additional service actually targeted toward the needs of the Island...

Kayser:  Which we can still do.

Bauer:  If we went back to the City wouldn't that special coding disappear?

Kayser:  No.  Maybe what I'm suggesting is, we're going to be substituting these other institutions which other neighborhoods in the City have, for their self-governance...  This Island is unique just by being an Island out here...  We're really just getting rid of a layer of political appointees who have taken away... this is on the self-governance issue... which has taken away your ability to govern yourselves, which is unresponsive to you, which has created a lot of friction.  It's to eliminate...  We're eliminating RIOC, so however, whatever semantics we're talking about... there's another aspect, too.  The Island is owned by the City.  The reversionary interest after 68 years is in the City.  We haven't discussed it yet with he City and the people we'd have to talk to, but it would be in the interest, while you're selling off these subleases, to also sell off the reversionary interest, too, and where there are already buildings out here, which might become co-ops later, or other buildings which are owned by operators -- what, Starrett has some operation out here and others...  They might be interested in buying... they would have a greater interest than others, in buying the reversionary interest after 68 years -- the fee -- which is in the City.  Now the City would have an interest in that, because whatever value that reversionary interest brought would go on the tax rolls at whatever value it sold at.  It wouldn't have a lot of value right now, because it's 68 years out, but it still would make it possible to take a leasehold interest and a fee interest underneath, you know what I mean by a fee interest, with the title interest underneath, and put them together.  If you put those interests together they have a lot more value than if they're severed, which is what the current arrangement is.  So by unifying these real estate interests you bring greater value to this Island.

Mincheff:  So you're going to sell those, and how are you going to...

Kayser:  Well, I'm not saying...  We have to negotiate with the City on that reversionary interest.

Mincheff:  How are you going to then create an ongoing fund for the running of the services of the Island?

Kayser:  Well, first of all, you still have the current Lease payments.  The current Lease payments...  You don't..  the current contractual arrangements...

Mincheff:  Eight million, five...

Kayser:  Whatever it is now doesn't change.

Mincheff:  But that's all...  In other words, if you sold the additional new buildings, you'd get...

Kayser:  Let me just take one thing at a time.  What you have right now doesn't change.  Whatever current streams of income, whatever current obligations...  you can't change that.  Under the law, under the contract provisions of the United States Constitution you cannot change contracts.  People are vested with those contract rights.

Mincheff:  How are you going to support all the rest of the buildings you have out here?

Kayser:  I don't know what you mean by "the rest..." Let me just take you through as to...  Let me make my presentation, as to what my thinking in, and then you can just come in and tell me why... you know, what else there is that we need to focus on.  It's the sale of these additional subleases which would be different, which would bring in, I think, somewhere between...  I hate to be held to this, because we haven't begun the marketing yet, but maybe thirty to forty million dollars, maybe more, but... cash, up front, over the next, coming in over the next... as soon as we can sell off these interests.  We go out with competitive bids, now we're talking about things like Southpoint, talking about things like Octagon Park, and like the...  the power plant, and I understand that the deal on the sports center has probably fallen through, whatever they were doing there... whatever they were, and that would be put out for bid again...

Mincheff:  What's the power plant, you're referring to Keyspan?

Kayser:  Is that the power plant?

Margie Smith:  No, the steam plant...

Bauer:  The steam plant...

Dick Lutz:  What about the Tram? Would the Tram fall in this...

Kayser:  No, the Tram...  Well, it could, except it's operating at a loss, and therefore... as long as it's operating at a loss there's not a lot of interest there.  That's something that we're going to have to talk about.  The Tram is a problem.  One of the things that we didn't discuss in the interview [with The WIRE] but which we're beginning to discuss is the question of advertising...  I think I mentioned that before, have I? We'd like to use advertising as an additional way to supplement the revenue out there, and maybe that could be capitalized.  Any streams of income that can be generated through lease arrangements on an annualized basis can potentially be capitalized to bring in more money up front.  But we have major capital improvements, and for safety reasons if nothing else as I've been told on the Tram... you know...  When I come out here I see all the things that need to be done... not all... I mean, I get a general gestalt view that there's a lot that needs to be done out here in terms of capital improvement.  Now, if we bring in this money, successfully, it comes into RIOC, cash, and some of it gets allocated as to capital improvements, and I certainly think we need input from, and I take it, from RIRA, and whatever the other groups are out here, as to priorities, in terms of capital improvements.  But I do not anticipate that the capital improvements that need to be made out here are going to take all the money that we are going to be raising through sales,a nd that there's also going to be at the end of this there will be a capital fund that will be a trust fund for the Island, that initially comes into RIOC.  Now we're going to get... which brings us back to the question of debt hanging over the Island.  You see, one of the things that allocation agreement and operations, if you start selling off essentially what can be deemed capital as opposed to...  You see, I don't want to construe this to be... but I don't want the State coming in and scooping up the capital that we get from the sale of these assets... which are not operations, perhaps...  It's of a capital nature.

Edelman:  I understand under the current agreement that's exactly what they would do.

Mincheff:  Exactly.

Edelman:  Unless that money came in, in a stream that was allocated every year in the budget.

Kayser:  OK...  Which is why I've been interested in the total debt, and I believe that it would be possible to negotiate with the State for some small payment, and I don't know what it might be but it would be modest, to get rid of this debt that's out there.  You'd have forgiveness, and get this debt out from under... get the Island out from under the debt, and if we can do that, that really frees this Island up for self- governing issues, because as long as you're in debt, no matter how remote it may be and it may be insulated by the Allocation Agreement, you're still... that's what's depriving you of your desire for self-governing, is that debt out there.  That's what's keeping that bill from going through.  That's the reason why it's a fantasy right now, illusory, until that debt can be wiped out, but this is to wipe the debt out, get rid of RIOC for all practical purposes, and then we've got to decide what's going to happen with this residual amount of capital funds... who's going to...  The idea is to get the State out of the picture, so you don't have the State government in the picture at all any longer.  So when I'm talking about integrating the Island back into the City that may not be the best way of expressing it.  Maybe a better way of expressing it is getting rid of RIOC.  But whatever it is, we want to end up with...

Mincheff:  And who would control that money?

Kayser:  Well, I don't know.  [But] I'm telling you that's one of the things that...  That's not an unpleasant problem.  And...

Mincheff:  Well, it is if the community isn't in control, because then we'll just become pawns of the...

Kayser:  You don't read me very well.  I'm trying to say that we're here to talk about what's going to happen with that.  I don't have a clue except that obviously it's going to be for the benefit of the Island.  If RIOC's not going to be around we're going to have to figure out...  I don't know how to structure it, but it's not an unpleasant problem.

Mincheff:  As long as it doesn't...  [UNINT]

Kayser:  [UNINT]...  not going to be the City.  It's going to be a trust fund for the Island.  It's going to be a capital trust fund of some type, only you're going to need trustees, or some kind of arrangement to take care of this thing.

Mincheff:  Like RIOC2.

Kayser:  What?

Mincheff:  Like RIOC2.

Kayser:  Well, RIOC is a State corporation and I think we want to get the State out of the picture.

Mincheff:  Well, a Board.

Kayser:  Well, you're going to need some kind of structure to do it, whether it's a board, whether it's a trust, or... what the legal structure is.  But first of all, we've got to get rid of the debt, the State, got to work out a deal for debt forgiveness... needs to get other substitute, truly self- governing institutions in here, as I mentioned, the Community Board, BIDs, RIDs, but, and we are going to need some folks to assist in the negotiations, for example with the Borough President's office, to do that, and I don't think those negotiations should be solely RIOC's negotiations.  I think the negotiations ought to have input from people who are interested int he future of self-governing...  We need input, and people actively involved in those negotiations, because...

We had one other meeting with Gifford Miller.  And Gifford is the one person who was not very enthusiastic about what we're trying to do.  He was...

Nurit Marcus:  Why was...

Bauer:  I think Gifford Miller is paying very close attention to the sentiment on the Island.

Kayser:  And that's where I was headed.  He was...  Basically, Gifford was not in my opinion a free thinker, and what he really is, is going to reflect the will of.. that seems to be the expression these days, the will of the people.  He basically is going to...  I think that assessment is absolutely right.  He's going to assess the desire of folks out here and if you all are on board, he'll be on board, and if you're not on board, he'll reflect whatever you all want.

Bauer:  He's been very sympathetic and helpful with a number of problems.  Let me raise a question in terms of the enfranchisement that was brought up before.  Approximately a year and half ago the State and RIOC, as its instrumentality, established two committees which included a number of people living on the Island.  One had to do with current development going on, the other had to do with strategic planning.  Those committees met at the most three times.

Kayser:  They've probably been dormant, right?

Bauer:  And then they stopped.

Kayser:  Yeah.

Bauer:  And that kind of thing could be an instrument whereby these ideas that you're developing... they're excellent, I mean they deserve a lot of consideration, could be examined in some further detail...  It's very hard to do in a half-hour conversation around the circle [here]...

Kayser:  No, no, I know.

Bauer:  A lot of ideas are stimulated by that kind of thinking.  Is it possible to get those committees functioning again as a way of enfranchising the...

Kayser:  Were these subcommittees of the Board, or what were they?

Bauer:  They were subcommittees of the RIOC Board, and they included on each of them three or four Board members and perhaps a half a dozen citizens from the Island.

Kayser:  Yeah, well, that's the kind of structure that I...  Yeah, either those committees would be revitalized or some other arrangements.  Something like that, yes.  That's what I think.  I'm just speaking for myself, though...

Katz:  The only difficulty with them is that they were specifically and solely advisory.  They had no power to...

Mary Camper-Titsingh:  Well, it's better than nothing...

Kayser:  Well, keep in mind right now that what we're involved in are negotiations...  What I anticipate is that we're going to be involved in certain negotiations with the City.

Katz:  Are there specific criteria that you're aware of that would prompt the State to forgive the debt of the Island, because that's an interesting idea...

Kayser:  Well, it's...  I think that...  Yeah, I think if it were part of a plan to extricate the State altogether from this situation, and to repose accountability and responsibility in the citizenry out here and it were done where we have executed our original charter under the lease and General Development Plan, and have left you so you're not going to flounder, financially, so we leave you in a strong financial position as opposed to this... let's face it, right now the financial situation out here is marginal, and...\

Lutz:  That's a kind word.

Kayser:  Well, I'm trying to be tactful.

Edelman:  I disagree with that assessment.

Kayser:  OK.  What do you think it is?

Byron Gaspard:  I think that when you...

Kayser:  No, I'm interested.  What do you think the financial situation is.

Edelman:  Well, there are a number of things I'd like to comment on.  To begin with, I don't trust RIOC, and I think that's very obvious that we cannot trust RIOC from some of the things you've said tonight.  You specifically mentioned two things that are absolutely contradictory.  One thing you said is that any selling off of the Island, for want of a better term, would follow the General Development Plan.

Kayser:  It would have to.

Edelman:  You also mentioned about the development of Southpoint.

Kayser:  Yes

Edelman:  The General Development Plan very specifically States that all land South of Goldwater Hospital would be open space.

Kayser:  It's true.  It says that.  Yes.

Edelman:  It absolutely says that.  So any development that contemplates anything like the Marriott or anything other than open space is contrary to the development plan.

Kayser:  I don't agree with your construction at all.

Edelman:  Would you like to see what it says in the document?

Kayser:  I know what it says in the document.

Edelman:  The point being...

Kayser:  It says...

Edelman:  I don't trust...

Kayser:  Let's not let this slide by.

Mincheff:  It says what?

Kayser:  It describes the area as open space, and that open space is defined as to what RIOC is supposed to do with it.  We're supposed to develop open space...

[SEVERAL VOICES UNINT]

Kayser:  ...for the benefit of the City and/or RIOC.

Mincheff:  Can you quote from it?

Edelman:  May I finish...

Kayser:  If I had it in front of me, I would, because, as Dick knows, there's specific language.

Lutz:  You quoted this in the interview.

Smith:  It says, "to be developed as parks." The part that you're talking about is on the next page.

Mincheff:  [PORTION UNINT]...  to be developed as parks.  That's on page 46.

Smith:  I think what you're talking about is on the next page...  It talks more about those parks... that open space to serve the residents of the City as a whole, but our interpretation is [that] they'll be developed as parks [UNINT]... than those parks.

Kayser:  Let me read this...

[PAUSE] ... [UNINT]

Smith:  I don't want it to seem like we're ganging up on you.  We live this thing, so...

Kayser:  No, that's... glad to read it.

[PAUSE]

Smith:  And I think if you look at this real fast... where it specifically says the ten acres down at Southpoint.

[PAUSE]

Kayser:  Now how about the map with respect to Southpoint, because aren't there some footprints with respect to the previous construction that existed out there?

Smith:  The problem is there are a lot of maps, and...

Kayser:  Because I saw a map...

Smith:  For every one you can show us we can show you three more that have it in a different place.  And also the deal about Northtown being overbuilt and all that so the GDP doesn't apply to that six acre area...

Kayser:  Let me...  You're talking...  Can't keep up...

[PAUSE]

Kayser:  Well, let me ask you...  What do you do with construction when it says something like this: An additional open space area, approximately seven acres, under the Queensboro Bridge, will be developed as a sports park for residents with areas for games.  How does that...  I mean...

Micheff & N. Marcus:  That's Uvea.

N. Marcus:  That's another park.

Kayser:  But that's a building, right?

N. Marcus:  It's a building and the areas around it.

Kayser:  Well, I'm trying to suggest.  My suggest...  Yeah, how can you have...

N. Marcus:  It's a recreation building...

Mincheff:  Because the land that they designated that you're referring to was under the 59th Street Bridge and the debris was falling off of it and would have killed someone had they not changed the designation for that particular area that you're referring to.

Smith:  It's as close to parkland as you can get.

Steve Marcus:  It was in 1990, that was reduced, the size of that.  The GDP was modified.  There are a number of places...

Kayser:  Well, the GDP can be modified, right.  Has it been modified for Southpoint yet?

S. Marcus:  No, it was not modified for Southpoint or for Southtown...

N. Marcus:  No, that was not accepted.

S. Marcus:  They also asked if it could be modified for Southtown, three acres,from the original six, but the authorities did not modify the GDP at the time.  On that specific occasion...

Mincheff:  And they didn't modify Octagon Park either even though they built Manhattan Park on Octagon Park.

Kayser:  Well, it talks about open spaces to be developed as parks...

Edelman:  That certainly is not a Marriott Hotel.

N. Marcus:  It also talks about the Island being a very special place in New York City, which...  That could be a real resource for the whole City.

Kayser:  OK.

N. Marcus:  As recreation, as parkland, as entertainment...

Kayser:  Well, here's where you come out on what we're planning to do...  at least what I'm planning to do... is we were not going to pre-approve whatever the use was with respect to what the sale is, and the sublease, and it's got to be subject to the General Development Plan, whatever that is, unless it's modified.

Mincheff:  But you can't sell anything at this point.  There's nothing left to sell.

Kayser:  Well, no.  Anything we have title to can be sold.

Mincheff:  No, not in accordance with the GDP.  You just got finished saying...

Kayser:  You can sublease anything.

Mincheff:  You said that you would only sell off land in accordance with the GDP.

Mincheff:  Now the GDP specifies that the only developable land that you have here is Southtown.  That's it.

Kayser:  You can sell off anything you have title to subject to the GDP.

Mincheff:  Subject to the GDP...

Kayser:  Yes.

Mincheff:  ...which means that the parkland must remain park...

Kayser:  Whatever the construction is that's appropriate here, whatever is... whoever buys it, buys the sublease, is restricted by the terms of the GDP.

Mincheff:  Right.  And the only developable land here for construction, according to the GDP, is Southtown.

Kayser:  Well, again, what I'm trying to do is avoid getting into what the proper construction is, but whoever buys it is going to have to be subject to the terms of the GDP.

Mincheff:  But there's no construction allowed on the rest of the land...

Smith:  ...whoever buys it...

Kayser:  Well, when I say "construction" I'm talking about construction of language.

Lutz:  He means how you construe the language...

Kayser:  How you construe language.

Lutz:  ...as opposed to construction of buildings.

Mincheff:  Is what you're saying that you can build on the parkland?

Kayser:  I'm not saying what you can do with it.  Whoever buys it is going to have their chances as to the way they read this language, as to what they can do with it.  And whatever the market places on it will be subject to whatever the restrictions are that people read in this.

Mincheff:  Is what you're saying, the State will sell it...  The State will sell Southpoint...

Kayser:  We're talking about RIOC right now.  The sublease.

Mincheff:  RIOC.  That RIOC will... Let me just see if I can... I think I must be missing something.  I just can't tell what.  Is what you're saying, that RIOC can sell Southpoint even though...

Kayser:  We can sublease it...

Mincheff:  Sublease it even though in that document it indicates that it can't be built upon -- it's parkland.

Kayser:  I don't know what it means.  What [do you] say it means?

Katz:  [Consulting attorney] Barbara Espejo of RIOC tells us that the GDP is only a general guideline and doesn't need to be adhered to, so who will decide that?

Kayser:  Well...

Katz:  Does it go to the courts in every instance?

Kayser:  Well, ultimately that seems to be what goes on in this country.  Haven't we noticed this lately?

Lutz:  I think...

Mincheff:  It appears that the only developable land...

Edelman:  This whole conversation started with what I had to say.  I would like an opportunity to finish what I was saying.

Kayser:  Yes.

Edelman:  And that was kind of split off of what I said and it...

Kayser:  You were saying you didn't trust RIOC.

Edelman:  ...only reaffirms that because what's happening here are the people who are sitting on the RIOC Board have a particular way of looking at this.  As Sartre so beautifully pointed out, logic is always post-decision.  When a decision is made as to what one believes in, one develops the logic.  Hence, as a result -- I'm not saying that the people on the RIOC Board do not intend well.  But they have a different agenda, they have a different perception, they're coming from a different place than the residents.  And they intend well and their perception, their interpretation of the GDP is going to be vastly different than ours.

Kayser:  Could be.

Edelman:  And as a result the way they're going to guide this development will leave us no alternative, if we can somehow raise the money to fight every step of the way.  As a result the whole plan that RIOC, the current people on RIOC have, I do not trust, and I do not believe them.

Further, to go from that, I believe that the Island, operationally, and to some degree, capital-wise, is solvent, can remain solvent.  They have... RIOC has two lawyers on staff besides a special counsel, two lawyers who make $140,000 a year.

Kayser:  I'm not going to defend the RIOC staffing.

Edelman:  No, I'm just pointing out some of the efficiencies that obviously can be made... Plus they have a special counsel on retainer, and then when they get sued they have to go out and hire separate attorneys.  And the Island has basically, for the last few years, been self-sufficient.  We can argue back and forth as to what the capital needs are, yet the only way to factually support capital needs is with engineering studies.  The only engineering studies I know of that are extant about the capital needs of the Island are the one concerning this building, the one concerning Blackwell House, and the Army Corps of Engineers study [of the seawall], which has been held up so we can't look at it for I don't know how long.  It's $6 million total, most of which, I will wager 2 to 1 right now, a good portion of that has to be building a new seawall around Southpoint.

Now there are many efficiencies.  If we're self-sufficient in operations now, with professional management and with some good thinking in terms of how to raise some additional revenues, bit by bit, we can be self-sufficient, and if we have control of the Island where we can go look for those funds, and search out those funds from private sources, from State sources, we can solve the problems.  And even if we can't solve all the problems, any municipality, any organization, when they're faced with dire times, can make the choice, but the people who run that organization make those choices.

The Island has made a choice.  We had a referendum, where it was debated in the community, the financial risks of taking control of the Island.  Patrick Stewart pushed against that.  Many people... it was debated.  Yet the referendum won with 80% of the vote.  It's clear that the democratic choice is control of this Island now.  And anyone who sits on the RIOC Board and considers himself a democrat, with a small d, should heed that and should push for it.  And if they don't, if they follow their own agenda, then obviously they're not a democrat, but rather an autocrat.  That's how I see it.

And further, your argument that legislation is not possible at this point, I disagree with you.  It's yet to be proven.  We've had, as I understand it through our contacts, agreement a year ago for a bill with the Governor that would give us self-governance, that is through a RIOC Board elected by the residents.  And I see it's clear from the Revenue Allocation Agreement that any funds that are due Empire State [Development Corporation] are due after the maintenance, repair and improvements that are necessary on the Island.  So that's kind of a bogus argument to say that we have $100 million, $200 million hanging over us.  It's $200 million that's owed if we start showing some kind of profit.  Otherwise, they're not going to come in, they're not going to bother us at all.

And I see no reason why it's not possible if Pete Grannis would agree.  We had agreement, from our understandings, from the Governor's office, from Peter Borden through the Governor, to an elected RIOC.  So I see that's where we should be going.  And if you consider yourself a democrat with a small d you should heed what the community wants.  This is our community.  You don't live here.  The other members of the Board, except for Patrick Stewart, who in my opinion, if he's a democrat should, at this point, announce his resignation.  He lost the election two to one, he lost, he couldn't even hold onto a seat in his own building.  He came in second to last against a slate that supported self-governance, so it's clear what the community wants, and what you should do, is you should step back, abandon these plans, and get behind our effort for a RIOC Board elected by the people... if you're a small-d-democrat.  If you're not, then you're an autocrat, trying to oppose outside will upon these people.

Lutz:  Can I ask Leo a question at this point? You feel that there is a formula under which State government would be willing to forgive or negotiate a reduction of the debt.

Kayser:  I think we can get out from under it altogether if we do it right.

Lutz:  Now the question that I'm wondering here is whether these two ideas fit together, in the following way.

Kayser:  Which two ideas?

Lutz:  The idea of reduction of the debt, combined with the idea of pre-capitalization of some of the value on the Island, with local rule.

Kayser:  That's exactly what I'm trying to do.  That's exactly what I'm trying to mesh here.  And if we're going to be fought tooth and nail, so that whatever monies we're going to be realizing from what we are doing are going to be consumed in legal fees and litigation... that is going to be a lose-lose situation for everybody and we aren't going to achieve either the objective of self-governance or the net capital that we are going to be generating through the proceeds.

Lutz:  But the thrust of my question is whether creative ideas, like pre-capitalization of a revenue stream, can be combined with professional management on Roosevelt Island, with local home rule and forgiveness of that debt...

Kayser:  Yeah, ultimately we're going to end up there.  But you're going to have to end up there by generating the capital first.  You're going to have to create...  There's a sequence of events, as long as...  That's why I'm putting everything on the table at once, as to where we want to go, which includes all those elements.

Lutz:  Would there be something that would prevent an elected RIOC Board from...

Kayser:  During this process?

Lutz: 

...from undertaking that process?

Kayser:  From undertaking that process? Yes, because the debt's still going to be there until we can generate the...

Lutz:  Unless the debt's forgiven.

Kayser:  Yeah.

Lutz:  Yeah.

Kayser:  We have to generate the money first in order to negotiate...  In other words, what I would like to try to do is negotiate with the State on debt forgiveness conditioned upon certain events taking place in terms of what we can pay which would be a relatively modest amount relative to what we raise.  I think that we're going to have to take a flexible view as to land use and capital being raised in order to do that, and to the extent that there is going to be some inflexibility, that... you know, it's like people who are...  it's like the Sierra club who want pristine forest land and don't want any use of forest.  That's kind of...  If there's that kind of...  On the other hand if you have mixed use, you know, I think there's a recognition that you need to retain certain park space and so forth.  As I understand what they were looking at Southpoint, is that they were limiting the whatever's going to be constructed on Southpoint, to what had been the footprints of previous construction work out there, and the rest had been open space, park space historically, was going to be left there.

Lutz:  But if I may...  What I think you're hearing here, and I'm...

Kayser:  By the way, and I regret this, too.  I've got to leave in about 7 minutes.

Lutz:  OK, just as you don't presume to speak for the Governor I'm not going to presume to speak for this group, but I'm going to try to interpret what I think I'm hearing and what I think you might want to carry away is the notion that if you proceed with a plan that is controlled by non-elected RIOC Board members, the fear in the community and around this group is that so much will be done by the time your approach to self-governance reaches fruition, that would be disagreeable to those who live here which could never be done if in fact there were local powers...

Kayser:  Yeah, I recognize that.  And my only response to that is that we're going to proceed in accordance with the... you know, right now, we have to... we have a duty.  Our responsibilities are with us right now, and we have to...

Sherie Helstien:  The responsibility is with RIOC.

Kayser:  Yeah, I mean we have political responsibility, we have financial responsibility, we have personal legal exposure and that's where it resides at this present time.

Katz:  Let's hear from some people we haven't heard from.  Byron.

Byron Gaspard:  [PARTLY UNINT DUE TO DISTANCE FROM MICROPHONE] Right now it appears that our open spaces and parks are really being sold to the highest bidder, and our community is being sold to the highest bidder, and I'm [UNINT]...  Joe Lynch, Commissioner of DHCR, put together two committees, the Capital [Planning and Development] Committee and the Strategic Planning Committee.  Those committees were supposed to be the community's and RIOC's input on the developments that were taking place on Roosevelt Island, and those decisions were supposed to be taken seriously as part of the decision-making on the developments that affected our community.  I was on the Capital [Planning and Development] Committee.  What ultimately happened was that when the decisions were made by the ...committee, on the development, especially the minischools and Southtown [UNINT]... set against, RIOC chose to disband the committees once we did not follow the script that they wanted us to follow.  And that was a committee that was put together by Joseph Lynch.  We were appointed to do a specific job and RIOC chose to ignore the specific recommendations of the committee that was put together by the commissioner of DHCR.  That doesn't really show a good example, in my opinion, of RIOC really meeting the needs of the community.  You know you have, with the exception of one, that don't even live on the Island.  So in a lot of ways one could assume that they could care less in terms of what has taken place here on Roosevelt Island, and how it affects the residents of Roosevelt Island, and I think that is why we need self-governance.  We need people who are elected, who live on the Island who, if they don't do their job, they are not elected for another term, and we need these people to step up and really deal with the needs of the community...

Kayser:  There's no disagreement from me with respect to that, except that I think Dick is pointing something out, which is a dilemma, which is that there's a transitional period here to get from here to there, and there are going to be some things occurring that really some people aren't going to agree with.  But on the other hand, everything is open...  We put things up for bid to the highest bidder, subject to whatever the law is and whatever the Lease agreements are and the General Development Plan is, and taking into account the risk factors involved, everybody's free to bid.  And put their own syndicates together and go and get their own financing for it...  and I suppose if you can insure yourself a certain amount of peace and tranquility with respect to smoothing the way for what your plans are for a given tract of property, it gives you a little better, you know, you're in a stronger position when it comes to bidding, than other people who might end up facing a hornet's nest of opposition, and...

Frank Farance [REFERRING TO DIAGRAMS]:  This is what most communities look like, which is you've got the community here and they pay taxes and you go to a variety of local City and State, to a variety of sources; they come back down into the community via services.

Then this is what Roosevelt Island looks like, which is it goes up, and not only that, we pay ground rents, so in addition to normal taxes, we pay to RIOC, and we don't have this funding line which we used to have.  So I think one of the interesting approaches... so like, for example, you probably remember 20 years ago the 59th Street Bridge was one of the ten worst bridges in the country, and the reason was because it had a maintenance problem because the City didn't spend money on maintenance.  So the solution was not to build apartments under the 59th Bridge so we could tax them and somehow funnel the money through to repair the bridge.  The solution was to go back to the obvious problem which is people pay taxes for services and right now the problem is really at the State level.  So I would suggest that if you're an open thinker, you might think that another solution is looking at the State funding line and saying we should be getting the same kind of return that all the other communities get because we don't get that right now and that's measurably the case.  It's not a handout.  It's just getting a fair share.

Kayser:  We're going to...  The idea is to give you back your accountability, responsibility as quickly as possible so that these kind of arguments...  You know, it's always easy to argue that you should have money coming back from some other place.

Farance:  It's a negative cash flow situation, and that's why you start deferring our maintenance.

Kayser:  You know, some people...  That's why I don't want to get into...  I don't know the equations that are involved here.  I don't...  I know that there are other equations and other people who can argue from a different perspective, and the best thing is to get the State out of the picture and get RIOC out of the picture so that you don't have this debate which will be interminable because it's not going to go anywhere.

Heimer:  A few things, Leo.  First of all, it's not 68 years, there are only 38 years left, which makes it... on the lease...

Kayser:  Maybe it's 38 years and not 68 years...

Heimer:  Which makes it less desirable...  I just wanted you to keep that in mind...

Kayser:  38 years is what it is.

Heimer:  OK.  So, and secondly, it took so long for us to get someone interested in Southtown, I'm wondering how these other parcels of land are going to be so desirable that they are going to be sold up front except in a sweetheart deal, and yet it took a long while to get them.  And my third and most important point is there's no reason why we can't do both.  As Dick pointed out, it's going to take so long for this to happen, if it happens, years, by then it will be all subleased and gone and we will have no say in it.  We would like to have self governance now so we have some say and, if it's a viable financial approach in the long run, fine, and if the Governor can forgive the debt on a long-term plan, for your plan, why can't he forgive the debt on our plan for self-governance, which the community has shown by an 80% vote...

Kayser:  How much are you offering?

Heimer:  Well, I not saying not to do your plan.  I'm saying both.  One doesn't preclude the other.  We need some say.  You see the disenfranchisement going on.  You've admitted to it.  You see how upset...  Do you think we wanted to sue? That's the last thing we wanted to do.  We put time and our own money into this and yet we see no other recourse, and so we need to have some say here, and so your plan, which sounds interesting financially, we still don't have a say until all the subleasing is done.  And that's not what we want.  We live here.  It's our community.

Kayser:  Well, listen, I'm going to have to apologize because I'm going to have to...

Lutz:  Can we get you back in a week or so, or something like that?

Kayser:  Yeah, I'm willing to come back...

Helstien:  What would be the benefit to the residents of this Island to follow your plan and not have self- governance and not have any controls.

Kayser:  I'm sorry.  What was the question?

Helstien:  What is the benefit to your plan alone... leaving out...

Kayser:  You mean what...

Helstien:  I want to ask the whole question.  What is the benefit of what you're talking about...

Kayser:  To whom?

Helstien:  To the residents on the Island, without including some form of control from, by the residents, on any of this.

Kayser:  I'm sorry.  You keep losing me here...

Helstien:  If we don't have self-governance, why is your plan going to benefit us?

Kayser:  What do you mean, if you're not going to have self-governance.

Mincheff:  If you're going to parcel off all of the land...

Mincheff & Helstien:  ...before we have a chance to make any decisions...

Mincheff:  ...You see, our issue, under self- governance...

Kayser:  I think it's fairly easy to see that by putting it out for bid where it goes to the highest bidder, you all can bid on it.

Helstien:  We are not going to be bidding on it, you know that very well.

Kayser:  You have a right to bid on it.

Helstien:  We have a right, but you know... let's talk realistically...

Kayser:  I'm not talking down to you...

Mincheff:  But you're selling our parks.  The only thing you have left to sell in order to pay off a debt that is not really our debt -- they are general obligation bonds, we are not in debt to the State of New York, RIOC is not in debt to the State of New York, but you are interested in coming up with a parcel of money that can pay off the non-debt but in the process you're going to sell off our parks to pay off a non-debt to make us free and clear.

Helstien:  What would we have in the way of decision-making.

Kayser:  I think that's a total misrepresentation of what's really involved here, because...

Lutz:  Let's continue another time...

Kayser:  ...because what you're going to end up with is hopefully... and the emphasis is on a large trust fund of some type...

Mincheff:  We won't have any parks.  It won't be worth...

Kayser:  But let me...  But at least characterize correctly what the benefit is.  You're going to end up with capital, which you don't have now.

Mincheff:  We won't have any parks.

Kayser:  That's not...  What you're going to end up with is...

Mincheff:  We won't have any quality of life, Leo.

Kayser:  I understand.  There are two sides to this equation.  And what I'm trying to say is there are trade-offs in this world, and there are some people who don't want to recognize that fact...  They happen to be socialists, and have points of view which are detached from economic reality, and so...

N. Marcus:  So, Leo, how do you see this group helping you? How do you see us helping you?

Kayser:  I think that the help that we're look... that I would be looking for... is to help in the negotiations for the institutions to structure the institutions which will be your self-governing institutions, which will be your BIDs, your RIDs, special relationship with community planning board, the places where you're going to be able to have your self-governance.  And, also, input as to... input and control over the trust funds that will be there.  So if you look at the benefit side of things, rather than having everything in a way that... a preconceived notion which freezes the... makes it impossible to make this transition, then you're going to be stuck with the unsatisfactory situation that you have now.

N. Marcus:  You're telling us that the work goes on.

S. Marcus:  Mr. Kayser, we may not agree with everything you say, but thank you very very much for coming.

Lutz:  And for being interested.  Why don't we continue another week.

Katz:  Let's do that.  Why don't I give you a call...

Kayser:  OK.