Volume 22, Number 26 | The Newspaper of Lower Manhattan | November 6 - 12, 2009

Downtown Express photo by Julie Shapiro

Housing advocates rallied at City Hall last week to protest the governor’s proposed use of an affordable housing fund to help close the state budget deficit.

Gov shifts some on B.P.C. $$$, Silver says

By Julie Shapiro

Gov. David Paterson loosened his grip somewhat on the Battery Park City Authority’s money this week, at the urging of Assembly Speaker Sheldon Silver.

Last month, the governor demanded $300 million from the authority to fill the state’s budget gaps, most of it borrowed and paid back over the next 30 years.

Silver, whose district includes B.P.C., talked the governor down to only grabbing $200 million, according to a source familiar with the discussions. Silver, who did not mention a specific amount, said he got the governor to agree to take money in cash from the B.P.C. Authority’s surplus, rather than borrowing it.

“The Battery Park City Authority is already deeply
in debt, and I strongly
believe we simply cannot afford to take out what is essentially a 30-year mortgage on our community in order to balance this year’s state budget,” Silver said in a statement to Downtown Express Wednesday. “I spoke to the governor about my concerns last week and I’m pleased to report that he has agreed to amend his deficit reduction plan to eliminate the need for Battery Park City to take on new debt.”
orrowing $250 million, as the governor initially demanded, would have saddled Battery Park City with annual repayments of $17 million for the next 30 years, Silver said.

A spokesperson for the governor did not confirm the deal or comment on Wednesday.

If the new $200 million deal goes forward, it would be the first time the state has ever taken money from the B.P.C. Authority for revenue. The authority’s money has historically gone to the city, where it has sometimes been used for affordable housing.

Any use of the authority’s surplus money has to be agreed upon by the mayor, city comptroller and the authority’s board, whose members are appointed by the governor. Because of the difficulty in getting an agreement, the funds often accrue for years until the political forces align. About $268 million now sits in the surplus fund, which draws its money from the ground rents that B.P.C. property owners pay.

Mayor Michael Bloomberg and Comptroller Bill Thompson — who arguably had other matters on their mind this fall as they were running for mayor — both sounded unhappy about the governor’s original $300 million request last month, though Thompson said three weeks ago he was open to a compromise.

Silver’s discussions with the governor could be the beginnings of just such a compromise. In fact, the governor’s acceptance of $200 million instead of $300 million would fit into a compromise framework State Sen. Liz Krueger first proposed last week.

Krueger, in a phone interview, suggested that in addition to the state getting $200 million, the city could get $200 million as well, with half going toward its general budget and half going toward affordable housing. The compromise would also require that in future years, all of the Battery Park City surplus ground rent money must go to build and preserve affordable housing in the city, as was originally intended.

“It will provide the state and city with desperately needed funds,” Krueger said of her compromise, “[and] it will definitely provide affordable housing…. I see it as a win-win-win.”

Although the state has no historical right to the money, Krueger, a Democrat who represents Manhattan from Flatiron to the Upper East Side, said tough budget times call for creative measures, and it’s better to strike a compromise than continue a stalemate. By next spring, about $400 million in B.P.C. ground rent money will be sitting in a lockbox, untouchable until the state and city come to an agreement.

“It just seems foolish at this point to leave the money in a fund that cannot be used for anything,” Krueger said, “especially at a time when the city government needs help, the state government needs help and affordable housing needs help.”

While the governor appears to be on board with the $200 million figure, though it is $100 million less than he originally wanted, it is unclear how he would feel about committing all the money to the city for the future. Spokespersons for the mayor, comptroller and Battery Park City Authority did not comment this week.

Paterson called a special session of the Legislature for Nov. 10 to address the state’s $3 billion current-year deficit, and the Battery Park City money will likely be one of the issues under discussion.

Although the authority’s board technically also has a role in the negotiations, the board members generally just follow the governor’s lead. However, Vice Chairperson Charles Urstadt pointed out that he and the other members are not bound to do so and he said he did not support the governor’s proposal.

“The governor does not control my vote,” Urstadt said. He added that he would not support a compromise on the money because, “I don’t think the state has any legal right, or any moral right for that matter, to make a claim on these monies.”

Some housing advocates praised Krueger’s compromise plan because it would automatically funnel the B.P.C. money into an affordable housing fund in the future, without the mayor, comptroller and authority board having to sign off.

“It would be a good solution,” said David Muchnick, coordinator for Housing First!, a statewide advocacy group. Committing money to affordable housing would also stimulate the local economy and create jobs, Muchnick said.

Muchnick and several dozen other activists rallied at City Hall last Thursday to oppose the governor’s unilateral attempt on the money.

“The fact that the governor is taking away those funds is an outrage, and is not one we want to let stand,” said Benjamin Dulchin, from the Association for Neighborhood and Housing Development, which organized the rally. The lively crowd booed when Dulchin uttered Paterson’s name.

Dulchin later said Krueger’s proposal is not his first choice because he doesn’t think the governor should get any Battery Park City money. Still, Dulchin said he had to take the “political reality” into account.

“We recognize that the power dynamics are unfortunately such that [Paterson] is able to hold the money hostage, and that is what he is doing,” Dulchin said.

Lisa Burriss, director of organizing for GOLES (Good Old Lower East Side), was less willing to compromise. She worried that even if the parties agree now that all the money will go toward affordable housing in future years, it won’t happen.

“There’s going to be a deficit next year, and then they’ll make the same excuse,” Burriss said. “It leaves too much room for us to get left out…. At the end of the day, affordable housing gets short-changed.”

State Sen. Daniel Squadron, whose district includes Battery Park City, said he agreed with the framework of Krueger’s proposal, but he shares Burriss’ concern about the future. To make the affordable housing component ironclad, Squadron suggested that the Battery Park City Authority borrow several hundred million dollars for affordable housing now. That would lock the money into place immediately and would not rely on the beneficence of a future budget cycle or political environment.

As the City Hall rally wound down last week, Dulchin noted that the creased red, white and blue banner saying “Keep the Promise of Battery Park City for Affordable Housing” has been getting a lot of use in recent years.

“I hope we can fold it up and put it away once and for all,” he said.






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