Daily News (New York)

April 30, 2003, Wednesday SPORTS FINAL EDITION

SECTION: BUSINESS; Pg. 34 THE REAL THING

9M IN FEES FOR LOW-INCOME APTS.

ERIC HERMAN

Two new apartment buildings in lower Manhattan won't be required to set aside units for low-income tenants, even though they're getting federal help through Liberty Bonds.

Instead, the city will charge the developers a fee that will generate $9 million, enough to create 225 new units for low-income tenants elsewhere.

"It's not perfect. But it's much better than anything the state's offered us," said Bettina Damiani of Good Jobs New York, a group critical of subsidies for business.

The  government created Liberty Bonds as part of a $20 billion aid package to the city after the  terrorists attacks. The bonds allow developers to borrow cheaply for downtown projects, encouraging them to build.

The two latest projects belong to Henry Elghanayan's Rockrose Development and the Moinian Group. Rockrose plans a 650-apartment, 51-story tower on Gold Street between Platt Street and Maiden Lane. Joseph Moinian will build a 386-apartment, 26-story building at 90 Washington St., at Rector Street.

Some Liberty Bond projects fall under the state's bond-issuing power, but these two fall under the city. The state requires buildings set aside 5% of the apartments as "affordable" housing. The city is taking another route.

According to a spokeswoman for the city's Housing Development Corp., requiring below-market rents would make it impossible for developers to pay off their loans.

"It's just not feasible unless there are other subsidies," said Tracy Paurowski.

The city asked the Lower Manhattan Development Corp. to provide additional subsidies to make low-income units feasible for these buildings, she said, but has not received a reply. An LMDC spokesman did not respond to a request for comment.

The 5% "affordable" apartments required by the state might not be so affordable. In the Related Companies' new Liberty-Bond-funded building in Battery Park City rents on "affordable" units will range from $1,700 to $2,400 a month.