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March 21, 2005

An Agency to Answer a City's Prayers, but Not All Its Questions

The NY Times
By MICHAEL SLACKMAN

Forest City Ratner's Ridge Hill Village proposal in Yonkers is not only getting its fair share of critics fearful of overdevelopment and traffic congestions.

Criticism is raining down on the agency that was created to make the miracle happen: the Ridge Hill Development Corporation, a private, nonprofit group that opponents say appears to have been set up as a haven where friends of current and former politicians can find high-paying jobs and wield huge sums of money.

Here are some particular gems from this article:

"Some state officials said, and a lawyer for Ridge Hill confirmed, that the corporation could have been set up to be accountable to elected officials, and covered by the state's open meetings laws. But Ridge Hill officials said that initially they wanted to keep everything secret to protect their negotiations with the developer, or talks between the developer and the project's potential tenants."
Read: We could've made it transparent, but then it wouldn't have been secret.

"Tax documents show that in 2003, [former Yonker's Mayor] Spencer's [20-something-year-old] brother-in-law, Chris Spring, had a $100,000-a-year job with the corporation, but a storm of protest followed and by 2004 he was on the developer's [Bruce Ratner] payroll instead.
No worries, they moved the gravy train from the quasi-public sector to the private sector where it belongs.

ridgehill.jpg NoLandGrab: So many questions have arisen out of the Ridge Hill Development Corporation that a lawsuit is in the works and it is attracting scrutiny from the State Comptroller's Office and Legislature. This may all ultimately have bearing on the Local Development Corporations that Mayor Bloomberg favors for handling big projects in the City like the West Side Stadium and Atlantic Yards.

Oh, and The NY Times once again failed to disclose their existing business relationship with Forest City Ratner.

article
Also, The Journal News,Ridge Hill records to be open in Yonkers


An Agency to Answer a City's Prayers, but Not All Its Questions
By MICHAEL SLACKMAN

For three years, it has been recommended as just the shot in the arm Yonkers needs: a plan to develop 84 acres of state-owned land along the New York State Thruway into a complex of offices, apartments, shops and a hotel that backers say will create thousands of jobs and produce more than $50 million in tax revenue for that beleaguered city.

But now the project is taking shots, not giving them. Criticism is raining down on the agency that was created to make the miracle happen: the Ridge Hill Development Corporation, a private, nonprofit group that opponents say appears to have been set up as a haven where friends of current and former politicians can find high-paying jobs and wield huge sums of money.

Some local officials and community leaders complain that the agency, a local development corporation, would have legal control of the tract and hundreds of millions of dollars in rent that the land will generate, yet is not answerable to voters or elected officials.

The corporation appoints its own board of directors and can keep many of its deliberations and activities secret, and while it is required to pursue economic development activities in Yonkers, it will have near-total say over how it spends the more than $6.5 million in rent it is expected to receive annually over 70 years if the project is completed.

The agency has come under so much pressure that on Friday its board of directors voted to make its records available to the public and to give quarterly reports to the mayor - though it could rescind that decision at any time.

Critics say the situation is a local version of a phenomenon playing out across the state: the creation of more than a hundred similar quasi-governmental agencies that engineer lucrative deals, often without the oversight or accountability required of most government bodies.

Many communities work with such agencies as a way to lure developers through tax or financing advantages, and to provide liability protection. In recent months several of these agencies have come under fire - from the local development corporation that Mayor Michael R. Bloomberg has proposed using to help build a stadium on the West Side of Manhattan, to state authorities like the Canal Corporation, which sold valuable development rights along the Erie Canal for $30,000.

The state comptroller's office has said it plans a review of other, similar types of agencies that conduct economic development activities around the state, called industrial development agencies. (One of them, in fact, set up the Ridge Hill corporation.) And one state lawmaker, Assemblyman Richard L. Brodsky, said he plans to introduce legislation to make these economic development agencies more accountable.

"The Yonkers deal is the poster child for what is wrong" with the agencies, said Mr. Brodsky, a Westchester Democrat who is chairman of the Assembly Committee on Corporations, Authorities and Commissions. "They are being used to systematically avoid scrutiny, legislative and budgetary checks and balances and to evade worker protections, environmental and other social legislation."

The Ridge Hill corporation was created in 2000 by the Yonkers Industrial Development Agency to develop a site that has been the focus of the city's hopes and disappointments since the state granted a 99-year lease to a manufacturer in 1979, hoping to create thousands of jobs. When the jobs did not come, the corporation bought the remainder of the lease and signed a developer, Forest City Ratner, to build the complex, the Ridge Hill Village Center.

By creating the Ridge Hill corporation, the development agency said it sought to protect itself and the city from any liability in case the project fell through. "The board felt that we should be isolated from any litigation that might prevent us from doing our work," said Ed Sheeran, the agency's executive director.

Some state officials said, and a lawyer for Ridge Hill confirmed, that the corporation could have been set up to be accountable to elected officials, and covered by the state's open meetings laws. But Ridge Hill officials said that initially they wanted to keep everything secret to protect their negotiations with the developer, or talks between the developer and the project's potential tenants.

Another major reason for creating the corporation was ensuring the very independence that Ridge Hill's critics find so disturbing, the corporation's lawyer said.

"The business people were allowed to do what was good for the city, and politicians were kept out of the process," said the lawyer, Dennis Lynch. The Yonkers project, he said, stands to be successful because it is being guided by "experienced business people" rather than "politicians who are worried about one thing: the next elections." He said that if politicians were more involved, Ridge Hill would be run by "the usual hacks."

Yet the project's critics say that is exactly what has happened.

Some of the corporation's directors are allies of Mayor Philip A. Amicone and former Mayor John R. Spencer, and sit on the boards of at least two other local development corporations in Yonkers. Tax documents show that in 2003, Mr. Spencer's brother-in-law, Chris Spring, had a $100,000-a-year job with the corporation, but a storm of protest followed and by 2004 he was on the developer's payroll instead.

The corporation's role has created an unusual dynamic in Yonkers, where the Chamber of Commerce has emerged as an unlikely foe. The Chamber's charges of cronyism gained currency when it was disclosed that the corporation had paid a $10,000 bonus to Mr. Sheeran, director of the industrial development agency that created Ridge Hill, for helping to negotiate the purchase of the lease.

"Our concern is, is this a fiefdom being set up down the road for former politicians and their friends to enjoy, or is this really a great thing for the city?" said the Chamber's president, Kevin T. Cacace. "If this is a great thing for the city, they should have no objection to sunset the corporation and let all the money flow to the city." Mr. Lynch, the corporation's lawyer, said it is governed by federal and state laws, and must spend the rent money received on economic development in the city.

But one city councilman, John M. Murtagh, said that while that is true, the company is still not accountable to the public, and can decide for itself what constitutes economic development. When he asked last month for a copy of a lease between Ridge Hill and the developer, he said, the corporation did not comply, saying it assumed he would get to see it at some later point.

"I am a city councilman in Yonkers and a co-chairman of the Real Estate Committee, and it seems fairly outrageous to me they want me to vote on this and not show me the lease," Mr. Murtagh said.

The council, in fact, has obtained most of its information about the project from the developer, an official said. On Friday, the corporation's board approved the resolution that opened its records, though it did not provide details of how that would work.

"This is exactly what we were after," said Mayor Amicone, a key supporter of the project. "To open up the process, to eliminate all the misinformation out there."

The mayor tried to calm public concern last month by announcing that the corporation's board had promised $5 million a year for city schools. A lawyer for Ridge Hill acknowledged in an interview that the promise is not binding.

The project has moved slowly for a variety of reasons, including opposition by community groups that have expressed the fears that often surface over such a large project: concerns over parking, traffic congestion and burdens placed on local schools. The City Council has been weighing whether to change the zoning of the land to allow the complex's mix of housing and businesses.

But the largest obstacle has been misgivings about the role and power of the Ridge Hill corporation - issues that have been explored extensively over the years by The Journal News, a newspaper in Westchester County.

The matter has also raised anew another question that has been shadowing state officials: whether they are getting the best price for state assets. The state has offered to sell the land to Ridge Hill for $8.7 million, but the corporation's contract with Forest City Ratner would generate more than that in rent just in the first two years.

Bart Bush, deputy commissioner for real estate, real property management and development in the state's Office of General Services, said his agency had negotiated a fair price for the land, based on two appraisals. He said it is not the state's role to act as a developer, or to assume the accompanying financial liabilities. Besides, the sale is intended not as a short-term moneymaker, but as a long-term investment that will yield economic benefits for Yonkers and the state.

The sale requires the unanimous approval of the state's Public Authorities Control Board, and is scheduled to be on the agenda of the board's next meeting. But the Democrats in the State Assembly control one of the three voting seats, and have held off approval because of questions.

"Why should an asset be sold at less than market value to an L.D.C.?" Assemblyman Brodsky asked. "Why should it be sold to an L.D.C. which is not required to put the money back in the city that created it? Is the L.D.C. honestly and appropriately created and run?"

The office of the state comptroller, Alan G. Hevesi, deep into an audit of Yonkers's financial practices, said it planned soon to review the way industrial development agencies operate, prompted in part by the Ridge Hill deal. Mr. Hevesi's office did not comment on the Yonkers case because of its audit, but a spokesman said the agencies would be examined to see if their power to issue lucrative tax breaks has been "cost-effective and well managed."

"There must be accountability and transparency at all levels of state and local government," said the spokesman, Dan Weiller.

Posted by lumi at March 21, 2005 4:01 PM