For Southtown Buildings 5-9,
RIOC Board Gives OK to a $1.6 Billion Deal

Southtown buildings 5 through 9 will be up and occupied in four to six years, based on a major step taken Thursday evening at RIOC’s Board of Directors meeting.

The Board agreed to a deal, prepared by its real-estate committee with consultant Paul Mas and presented by Mas, that he characterized as being worth $1.9 billion. The project involves 40 percent "affordable" housing, based on specific government guidelines. Some ten percent with go to families whose annual income is below 80 percent of the area median income (AMI); other components of the affordable segment would go to higher-income families still qualifying under specific guidelines.

The contract will go to the two-firm consortium that bid on and won the overall Southtown contract, consisting of the Hudson Companies and the Related Companies, commonly known here as "Hudson-Related."

Under a trust-fund plan for the income, RIOC would realize about $10 million a year by 2014.

Resident Board member David Kraut characterized the $10 million in annual income as a replacement for the $6 million State subsidy that was removed from the RIOC budget by the administration of Governor George Pataki almost a decade ago. He said that, for years, he has been pondering what income stream might replace the subsidy and said that this stream, with another stream from the Octagon Apartments project, would satisfy his concern.

Kraut and other Board members, as well as Mas, favorably compared the new deal with the strongly criticized deal on Southtown buildings 1 through 4. "There are people who write letters to the newspaper saying I’m the guy who made the bad deal," Kraut said. He seemed pleased that the new deal contains features that will allow an escalation of income if real-estate values climb.

The WIRE plans a more detailed report on the deal, which was voted on just short of the newspaper’s Thursday night press deadline.