Curious Actions by Resident Board Members

At Westview, Affordability Tips Toward Failure - Who's To Blame?

Updated 1 week ago David Stone
At Westview, Affordability Tips Toward Failure - Who's To Blame?

Yes, the pending failure of the Westview affordability exit plan represents another piece of Roosevelt Island's community reduced to rubble along the trail of Susan Rosenthal's RIOC leadership, but does the primary blame really fall on her, this time? Maybe not, and in an immediate sense, certainly not. The proximate bad guys are enough to make abused residents sick.

As reported by us earlier, an agreement between RIOC and Westview's sponsor, brokered - or forced, depending on your point of view, on Rosenthal - by NYS Homes and Community Renewal and memorialized in a letter to the State Comptroller in March, came unglued when Rosenthal demanded that negotiations be reopened. RIOC wanted more money, after all.

A year and a half of hard negotiations and hope went out the window. None of it's likely to land on its feet.

The saddest part of this story is that those most affected by this mess have had the least influence on it.

The Westview Task Force reached a consensus in the fall of 2016 on an exit plan that met overwhelming approval from tenants. Westview's sponsor agreed too. Investors hadn't made a dime in profit in over four decades of ownership and support for affordability, two decades longer than Mitchell-Lama rules require.

Everyone intimately connected with Westview, except RIOC, its freeloading tenant at 591 Main, was in accord. And they had good reason to expect a smooth landing, with affordable rents or great deals for buying their apartments. After all, State Assembly Member Rebecca Seawright's office had lent a generous helping hand, and HCR, which oversees Mitchell-Lama, had been along for the ride.

Not to mention, the approved plan closely resembled one that Island House pushed through, against Governor Cuomo's resistance, that's considered a solid success story, with many of the same players.

That's when RIOC, now under the leadership of Rosenthal, who recently replaced a highly effective Charlene Indelicato, threw a monkey wrench into the works. Hold on, the State agency declared, we want more money. 

So much more money that what was considered a brilliant opportunity to secure longterm affordability for Roosevelt Island toppled. RIOC's demands made it "a nonstarter," according to those involved.

But after a year and a half of halting negotiations and accumulating bad feelings between Rosenthal, Westview tenants and the complex's sponsor, HCR stepped in, virtually forcing terms on RIOC after extensive studies determined what's fair.

Next came Rosenthal's letter to the State Comptroller, a necessary step under public authorities law, and a meeting scheduled with RIOC's Board Committee, Real Estate Development Advisory, REDAC, chaired by Rivercross resident Howard Polivy.

Remember the names: Howard Polivy, David Kraut and Michael Shinozaki.

We don't know why the public Board Members, all longtime Roosevelt Island residents, threw Westview tenants over a cliff. No one's saying, even off the record. Even Westview's sponsor doesn't know.

Our neighbors on the Board, none of them living in Westview, are tightlipped about it, even off the record where they'd have a chance to indirectly reach the people they are supposed to represent with their concerns.

What we do know is that Rosenthal and HCR Commissioner RuthAnne Visnauskas - RIOC's top executive and the top State official involved, both Cuomo appointees - brought the agreement to a REDAC meeting, expecting quick approval, and left shortly after arriving with their tails between their legs.

Within days, the carefully crafted deal, once approved by everyone else, with a bow on it, blew up. Rosenthal contacted Westview sponsor representative David Hirschhorn with a demand for more money, taking a surreal position that, in spite of all evidence, no agreement had ever been reached.

That appears to have been a technical dodge. No contract can be final until the Board approves it, but that was not considered an obstacle. Visnauskas, the Board Chair, and a second State representative, Budget Director Robert Mujica, were certain "Yes" votes. All Rosenthal needed was a single one of the three resident Board Members remaining after Fay Christian and Margie Smith resigned.

Howard Polivy was considered a sure thing. He wasn't.

We don't know why Polivy, Kraut and Shinozaki lined up to crush a deal that was a year and a half in the making and coveted by their neighbors as an expression of sustained community values. They're as lacking in transparency as the State administrators.

An agreement being worked on at the same time to amend Rivercross's ground lease passed like it was on greased skids, and just last fall, the Board approved a major amendment - including big concessions - for Southtown after Rosenthal and Hudson twisted their arms with a classic sales technique my old boss used to call "The Chimes of Doom" on extremely short notice.

But Westview? Not so fast!

RIOC, where money flows so freely, in and out, that one seasoned observer termed it "spending like a drunken sailor" (Millennials and younger can find the definition here.), wanted more of it, at the expense of Westview tenants.

But nobody who's talking can tell us why.

Where Polivy, Kraut and Shinozaki have positioned affordability now...

On the brink of disaster, and by that we mean irreversible disaster. Once this deal crashes, it ain't coming back.

Among other reasons, Westview's investors have had enough. They've done their part to support affordability, making no profit in 47 years. (Not a typo.) 

A financing arrangement worked out for the conversion expires on July 15th. It cannot be renewed at current rates, which means, even if resurrected at some future date, an unlikely event, Westview's tenants will not get as favorable rates as they reasonably expected, meaning some will be forced to leave.

The more likely resolution is that, by year's end, Westview's sponsor will remove the complex from Mitchell-Lama and convert to market rate housing. That's life on Roosevelt Island under Cuomo's RIOC leadership.

Negotiations are pretty much stalled with Rosenthal on vacation and the final Board Meeting before the deadline scheduled for next week. 

The roadblocks are these: Howard Polivy, David Kraut and Michael Shinozaki, names unlikely to be forgotten as Roosevelt Island's last best shot at affordable housing comes to a painful end.

 

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