Volume 23, Number 3 | The Newspaper of Lower Manhattan | May 28 - June 3, 2010
Passing the LMDC bucks, yet again
By Josh Rogers
The city is passing the ball of unspent 9/11 money back into the LMDC’s court.
David Emil, president of the Lower Manhattan Development Corp., told CB 1 two weeks ago that some of the state-city corporation’s uncommitted, federal 9/11-rebuilding aid was now waiting a city plan to use it. Emil identified a few pots of money, including nearly $12 million left in an affordable housing fund and about $3 million in an education fund.
Subsequent to Emil’s May 10 presentation and a Downtown Express article a few days later, a mayoral spokesperson said the city has submitted plans for both of these funds. About $10 million would go to renovate affordable housing in Chinatown and $3 million to the School Construction Authority to complete the construction of P.S./I.S. 276, scheduled to open in Battery Park City this September.
In an email to the Downtown Express, the spokesperson, Andrew Brent, wrote: “The city has identified important uses for the other funding, but we need LMDC approval before the money can be spent.” Neither proposal has been approved.
He did not say if the proposals were submitted before or after Emil’s presentation, and an LMDC spokesperson declined to comment for this article.
The mayor appoints half of the corporation’s board members but it is a subsidiary of a state authority, the Empire State Development Corp. and the governor has always had more influence over the LMDC since it was created at the end of 2001.
The $50 million housing fund was first announced seven years ago.
Bettina Damiani, project director of Good Jobs New York, an advocacy group that kept close watch of the 9/11 money the first few years after the attack, said the situation is hard to fathom. She finds it hard to believe that the “crumbs” set aside for affordable housing are still left when $8 billion in tax-free Liberty Bonds was used primarily for market rent buildings and commercial offices.
ESDC also still has about $25 million left in a job creation and retention program it started in 2002 with $143 million of LMDC money.
Damiani said officials were always more interested in helping large corporations than they were small businesses. She said having money left over in the job fund just shows that she and others were right to call for money for things like affordable housing, job training and help for small shops. Their calls “always fell on deaf ears,” Damiani said. “How many times can I roll my eyes?
“Our representatives were not listening to the needs of the neighborhood, if there’s so much money left after so many years... Goldman Sachs has a shiny new tower,” she said. “Think of the impact all of that money would have had on smaller businesses.”
Emil, the LMDC president, indicated two weeks ago that about $270 million of corporation money — about 10 percent of the original federal allocation — is uncommitted to a specific project.
Elizabeth Mitchell, an ESDC spokesperson, said all of the job money was committed to firms by mid-2007, but several deals fell through, freeing up the fund. In particular, she cited JPMorgan Chase, which signed a non-binding agreement that year to build headquarters at World Trade Center Tower 5, but backed out in 2008 after it acquired Bear Stearns.
With $30 million left in the Job Retention and Creation Program last year, ESDC, working with the city’s Economic Development Corp., announced a new program that makes smaller firms eligible. Companies moving at least 75 jobs to Lower Manhattan, instead of 200, are eligible for about $4,000 per job if they stay for 10 years. Officials are hoping international and other finanicial services firms take advantage; so far about $5 million has been used.
“We continue to field new project inquiries especially as we look to encourage firms to relocate to the World Trade Center in the coming years,” Mitchell wrote in an email to the Downtown Express.
ESDC also shifted $7 million back to the LMDC in 2007 to set up a small business grant program, which compensates shops hurt because of Downtown construction projects.
“We’re dealing with an alphabet soup of government agencies in control of the money,” Julie Menin, CB 1’s chairperson, said in a telephone interview. “It is absolutely not acceptable.... Eight and a half years after the fact, this money has to be released.”
Menin, also a member of the LMDC’s board of directors, said she has heard nothing of city-LMDC discussions about shifts to the housing and other funds. The community board passed a resolution Tuesday calling on the LMDC to release all of the remaining funds, over $200 million, at the next directors’ meeting on June 24.
If the LMDC takes the advice, it would submit a new spending plan to the U.S. Dept. of Housing and Urban Development, led by Secretary Shaun Donovan, who’s intimately familiar with the LMDC housing money.
Five years ago, Donovan was leading the city’s Dept. of Housing Preservation and Development when he announced that $16 million of the LMDC funds would go to renovate buildings in Chinatown and keep rent down. He was there in 2008 when the first of 90 apartments opened and said the delays were caused by rising real estate prices.