downtownexpress.com

Volume 19 • Issue 18 | September 15 - 21, 2006

L.M.D.C. shakes budget, finds $200 million

By Josh Rogers

The Lower Manhattan Development Corp. confirmed last week it does in fact have the $45 million the governor and mayor promised to Downtown community groups a year and a half ago.

The state-city corporation’s board also voted Thursday to increase the fund’s size to $67.5 million and held out the possibility that an additional $9.5 million could be made available if more cost savings are be found in projects that came in under budget.
“We are very pleased they committed the money to the community enhancement fund where it should have been going all along,” said Julie Menin, chairperson of Community Board 1, which had been asking the L.M.D.C. to set up an application process for the money for months.

Doubts about whether the federal money was actually there reached a high point at the end of July when Dep. Mayor Dan Doctoroff and Madelyn Wils, both L.M.D.C. board members, told Downtown Express that they didn’t think much, if any of the money was left. Stefan Pryor, president of the L.M.D.C. who resigned this week as planned, did not contradict his board members in an Aug. 4 Express article but described their assessment as “premature.”

Both members said some L.M.D.C. projects had gone over budget and Doctoroff added that with the agency’s recent commitment to cover $45 million in possible World Trade Center memorial cost overruns, it would not be wise to spend any remaining money on the community enhancement fund.

At last week’s meeting, the L.M.D.C.’s Bob Miller identified $156 million in unspent money from previously approved spending plans and $39 million in the L.M.D.C.’s remaining dollars.

When the community enhancement fund was announced in the spring of 2005 as part of an $819 million plan, the governor, mayor and the L.M.D.C. calculated but did not say that they had already achieved savings in previously approved spending plans in order to pay for the new expenditures.

Pryor said he believed the L.M.D.C. still had the community money a month ago, but he was not certain because “we were in the process of insuring that all of these priorities including the community enhancement funds would be realized.” The L.M.D.C. announced in July that it will disband in the next few months and many of its responsibilities will be shifted to the city.

The $67 million fund includes $7 million in unspent grants targeted for Downtown art projects and the new community-cultural enhancement fund will be open to both arts and community groups. Dep. Mayor Doctoroff, who will be overseeing the fund as the L.M.D.C. transfers its powers, said he hoped to award the grants in the next few months.

It’s an ambitious timetable given the criteria for the grants, have not yet been released, nor has the L.M.D.C.’s “final action plan.” The plan, which is likely to have a short public comment period, is expected to be available on the corporation’s Web site, www.renewnyc.com, some time next week. Officials are planning to set up an application process similar to the cultural grant program, which was praised even by some agency critics.

The final action plan also includes $31 million for transportation for previously announced plans to improve Chinatown traffic conditions and to study a J.F.K. Airport/L.I.R.R. link to Lower Manhattan; $34 million for economic development, which may be used for improving the Greenwich St. area south of the W.T.C. (a cut from the $40 million originally pledged to the idea); $12 million for affordable housing; $6 million for education; and the $45 million for memorial cost overruns.

The agency also reaffirmed its commitment to pay $55 million toward a performing arts center at the W.T.C. site and $8 million to help the Drawing Center find a Downtown location after being pressured to leave the site over censorship issues.

Bob Townley, executive director of Manhattan Youth, said he will apply for some of the community money to finish building his new recreation center under construction in Tribeca as soon as the applications are available.

Wils, who was chairperson of Community Board 1, said $1 million of the education fund should be spent on a $1.5 million gym for Millennium High School, which was built in part with L.M.D.C. money. Wils, who led the fundraising effort for the school, said Councilmember Alan Gerson told her he would be able to get the remaining gym money from the city. The L.M.D.C. ended up saving $3 million on the Millennium project when the School Construction Authority picked up some of the costs, thus enabling the corporation to set up the new education fund.

The affordable housing fund represents a $4 million increase in the previously announced $50 million housing plan. The city has scrapped its idea to spend $8 million to convert vacant, low-floor spaces on Fulton St. to below market apartments and plans to spend $12 million on unspecified ways to build or preserve affordable housing south of Houston St., the L.M.D.C.’s jurisdiction line.

Miller calculates the L.M.D.C. saved $27.5 million on unspent grants targeted for small firms and business recovery and may save an additional $5 million. Many small businesses near large construction projects such as the Fulton Transit Center say they have been hurt by all of the street closures and may not be able to stay open. Doctoroff told Downtown Express that the city had no specific plans to help small businesses now but “we are going to monitor the situation. We are also increasingly optimistic about the future.”

Other large savings, some of which were recently found, include $43 - $44.4 million on an expired residential grant program to attract and retain Lower Manhattan residents, $25 million on the memorial and museum, and $20 million on the memorial and cultural program.

Kevin Rampe, the L.M.D.C.’s chairperson who was just made acting president with Pryor’s departure, said he did not know who would get control of the $45 million memorial reserve fund once the L.M.D.C. disbands or what would happen to the money if the project is built within the budget. The current estimate to build the memorial portion of the W.T.C. site is $768 million. The Port Authority, which owns the site and is building the memorial, would be responsible for covering the first $25 million over the budget.

The L.M.D.C., or whatever replaces it, will also have an opportunity to recover up to $72 million in allocated money.

When the corporation bought the damaged, contaminated Deutsche Bank building two years ago, it committed to spending $135 million on acquisition and demolition costs and the bank’s insurers assumed responsibility if the dismantlement cost more. Estimated costs of pollution insurance, environmental testing and meeting Environmental Protection Agency requirements – which the L.M.D.C. still has not done – has since brought the project’s total cost up to $207 million, and the corporation hopes to get the additional money back from the insurance companies.


Josh@DowntownExpress.com



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