Letters To The Editor
Email: editor@ gcnews.com

Finances Still Queasy

To the Editor:

The recent AvalonBay tour of Garden City's four POAs was helpful in providing an initial understanding of the preliminary financial terms of the AvalonBay proposal. The terms are subject to continuing negotiations, but presently appear to be as follows:

1. A 99-year ground lease which effectively transfers ownership of the St. Paul's building and property to AvalonBay. Any future renewal and/or renegotiation of the ground lease remains unsettled. AvalonBay would not pay the Village any rent during the 99-years of this ground lease.

2. Parties to the lease seem to be the Village of Garden City and a special purpose subsidiary of AvalonBay. This subsidiary may or may not have the full parent company guarantee of AvalonBay 's contractual responsibilities, which means that if the Village had to sue AvalonBay for failure to fulfill its contractual obligations the Village could not recover any money from AvalonBay but would be limited to the minimal money of the AvalonBay subsidiary.

3. "Payments In Lieu Of Taxes," PILOTS, will be paid, rather than normal and customary Village taxes. The PILOTS initially will be minimal, but will increase over a 35 year period at which time the PILOTS will/may approximate the then current level of taxes.

4. An annual lease payment of approximately $450,000 will be paid by the Village for some community benefit described as either a subterranean parking facility or community space in/near the main building at St Paul's. That $450,000 can increase or decrease depending on what the Village wishes to add to or subtract from the project. AvalonBay has indicated to the POAs that the cost of the project to AvalonBay must remain the same.

5. AvalonBay would retain the right to build a medium-sized apartment building, approximately 50' high that would accommodate approximately 37 new 1- and 2-bedroom rental units. This medium-sized apartment building would be located on the easterly or northerly border of the property. AvalonBay has called this medium-sized (5-story) apartment building a "Town House".

6. AvalonBay assumes the following risks:

- Development risk

- Financial risk

- Construction risk

- Rental risk

- Operating risk

and the not inconsiderable risk of securing the Home Rule legislation from the New York State Legislature, as well as a significant zoning change in the Village of Garden City 's Master Plan.

7. It is not clear whether or not the Village has negotiated a Profit Share and Participation in Capital Events provision in the Memorandum of Understanding. However, there is scant financial data to show that the Village would ever receive revenue under this provision, or if it does, how much revenue and when it would be received.

8. Avalon Bay has said that it would seek historic tax credits of approximately $8+ million. Since AvalonBay cannot use the tax credits because it is a real estate investment trust, or "REIT" it would sell those credits, further reducing the capital that AvalonBay would pay from its corporate pocketbook.

AvalonBay appears to have mitigated its various "risk" by accepting some risks but shifting other risks to the Village. Development and financial risk are assumed by AvalonBay, which will finance the project from its own funds. AvalonBay indicated at the POAs that self-financing would eliminate "market risk" from the project. Construction cost risk however, will be assumed indirectly by the Village through two subsidies that together will pay almost all of the project's projected $40 million construction costs. Those subsidies are the transfer of the St Paul's grounds and building to Avalon Bay for free (a $20+ million value) and the 99-year ground lease at a minimum of $450,000 annual rent paid by the Village (an additional $20 million value to Avalon Bay in today's real estate market). Consequently, AvalonBay appears to have secured a fully renovated $40 million rental property in the heart of Garden City at no cost.

AvalonBay has also accepted the risk of renting the completed project. However, according to AvalonBay the rental occupancy rate for Long Island approximates 97+% and the occupancy rate for Garden City would be higher. Consequently, the project should be fully rented quickly with the resulting annual rental revenues accruing to AvalonBay, which would not be obligated to pay either taxes for 35 years or a ground lease payment to the Village for 99 years. Since the project's renovation costs are paid by the Village through its two subsidies, AvalonBay then receives the full rental revenues from 97+% of the rental apartments as its profit after paying its operating costs.

Imagine being able to move into a fully renovated home in the central section of Garden City and not have to pay taxes or a mortgage, and then being able to rent that home and keep all monthly income for 99 years after paying the typical monthly maintenance costs.

AvalonBay and the Village are currently negotiating a Memorandum of Understanding that will control the risks associated with the development and renovation of St Paul's. It appears that the Village has already agreed to subsidize Avalon Bay with $40 million in free land, a free building and an annual payment of half-a-million dollars; plus, no taxes, no ground lease payments, and the right to build a five story/50' medium-sized apartment building on the property.

For years Mr. Mauk promised that his Committee's plan to renovate St. Paul's would be at "no cost" to the Village taxpayers. More recently that promise has evolved into a sly statement in the recent Village Facts that there would be a "MINIMAL COST" to Garden City's taxpayers. Two financial subsidies that are reasonably valued at $40+ million plus the construction of a 50' medium-sized apartment building are NOT MINIMAL costs!!! What's next, Mr. Mauk?!!

The Executive Committee

of the Committee to

Save St. Paul's

Indecision

To The Editor:

No wonder concrete decisions cannot be made about Saint Pauls when no one can seem to agree on something as minor as a fence along Stewart Avenue. How did the beautiful fence on the other side of the street come to be? Was it in "committee" or did one person make a decision who was then able to get it done?

And, speaking of Saint Pauls, did I see that Avalon Bay would like to erect a multi-level parking garage on the corner of Stewart Avenue and Rockaway Avenue? Please, please tell me I'm wrong!

Joan Hobbs

Some Improvements

To the Editor:

There are two ways in which Garden City, never known as a progressive village, could break out of its community lethargy and help the environment and our students.

First, ban plastic bags from all stores--requiring residents to use re-usable cloth or paper bags. It's estimated that just Garden City residents alone use 2.6 million plastic bags each year (10,000 households X 5 bags/week X 52 weeks). Ireland has successfully replaced all of their plastic with re usable cloth (NYTimes). Plastic bags in dumps do not disintegrate for thousands of years and, improperly disposed of, harm the environment.

Second, while the Garden City schools are good, they could be substantially better, particularly in math and science. When was the last time that Garden City had a Westinghouse/Intel finalist? Other districts on Long Island have finalists--so should Garden City. Why not have a concerted effort in the schools to focus on having finalists and thereby improving overall science and math education. In the process, property values will rise as the district's reputation improves.

James Bauer

Rethink Agreement

To The Editor:

In the letter to the editor in the Garden City News dated January 25, 2008, the following statement appeared, "I Think Garden City has to rethink its form of government. The Gentlemen's Agreement has past its effectiveness."

After having resided in Garden City for more than 50 years after moving here after serving in World War II and Korea, I have toyed with the idea at several times but never as strongly as I do now.

First, the handling of the St. Paul problem has been a fiasco. Why should it take more than a dozen years to resolve this question? Why should have this area been purchased as public land rather than private land? Second, we have spent far too much money deciding what to do with it.

The "Gentlemen's Agreement" was a noble experiment which has outlived its time. It clearly will not survive a law suit because the four POA's are not numerically equal in population numbers.

But aside from its weak legal underprinings, the POA's sleep on the requests of their constituents.

This Village needs a Code of Ethics with teeth. Such a Code of Ethics is mandatory at the State level. They are needed just as much, if not more, at lower levels of government villages which have contested elections that have Codes of Ethics with teeth. We have requested that Senator Kemp Hannon initiate legislation to accomplish this, i.e. a Code of Ethics similar to New York State but most of the time Home Rule triumphs.

I have been pushing for such action through the WPOA for several years to no avail. If we had a contested election we would have a Codes of Ethics with teeth with no nepotism, no cronyism and no favorite citizens promptly as our neighboring villages do. What do you think?

Joseph A. Calamari

PS: The Recreation Department has finally gotten its wish. It is moving to the St. Paul's Area,. It was this department's testimony which caused the judge to rule as he did re: public use.