Copyright 2002 Newsday

August 8, 2002 Thursday QUEENS EDITION

SECTION: NEWS, Pg. A07

LENGTH: 722 words

HEADLINE: Bonds for Building;
$300M to finance luxury apartments

BYLINE: By Graham Rayman. STAFF WRITER

BODY:
In a meeting called on just 24-hour public notice, the board of the state Housing Finance Agency yesterday formally approved $300 million in tax-exempt Liberty Bonds for the construction of three luxury apartment buildings in lower Manhattan.

One building, in Battery Park City, will sit on the Hudson River, with sparkling views of the Statue of Liberty. It will have a 24-hour concierge, a fitness center, a children's playroom and a rooftop terrace. Apartments will rent for up to $5,981 a month. Another building, also in Battery Park City, will include rooftop gardens with monthly rents of up to $6,267. The third building, at 10 Liberty St., will include a 13,000-square-foot fitness center, a 200-car garage and rents of up to $4,000 a month.

The board of the HFA, a public benefit corporation created in 1960 to finance low-income housing, unanimously suspended the 10-day public notice requirement at the start of yesterday's meeting. There was little discussion, but the proposals had been the subject of several public meetings since May.

"It's just a sham," one affordable housing advocate, Margaret Hughes of Good Old Lower East Side, said as she rose and stormed out of the meeting.

The HFA vote approving the projects came on the same day that Gov. George Pataki and Mayor Michael Bloomberg officially launched the Liberty Bond program. Sally Crockett, a spokeswoman for the HFA, said the board did not want to wait until the next scheduled meeting in September before approving the measure.

Under the deal, part of the $8-billion federal Liberty Bond program started in the wake of the Sept. 11 attacks, each developer receives about $100 million in bond funds, and doesn't have to pay real estate taxes for 20 years. In return, they have to put up 10 to 25 percent of the construction cost, and repay the bonds over 34 years.

The deals have been criticized because even as the city copes with an affordable housing crisis, just 5 percent of the apartments in the three buildings are pegged "affordable." Moreover, renters who make as much as $93,000 can still qualify for the "affordable" apartments, an income level out of the reach of most New Yorkers. The rest of the apartments will be rented at market rates.

"The central question that NYSHFA and Gov. Pataki must answer is whether public tax-exempt financing is essential to produce this kind of upper-income housing," said Victor Bach, senior housing policy analyst with the Community Service Society of New York. "Developers of luxury housing should not be drinking at the public trough."

HFA president Stephen Hunt said the projects were either under construction or in the HFA pipeline before Sept. 11, but the rental market plummeted after the attacks and the developers opted to shelve the projects. Liberty Bonds gave developers a new financing opportunity.

Hunt added that in creating the Liberty Bond program, Congress did not impose a requirement on how many apartments should fall under the "affordable" designation. The norm in other HFA programs is 20 percent, officials said.

"Considering the economic climate, the program needs to create an incentive to developers," said Edward Skyler, the mayor's press secretary, referring to the 5 percent allocation.

Skyler said about $25 million in fees from the developers will be put into a trust fund to be used for affordable housing.

But Bettina Damiani of Good Jobs New York said occupancy rates in Battery Park City have already returned to pre-Sept. 11 levels. She said regardless of Congress' decision, the HFA should have acted on its own to require more affordable apartments.

The three projects approved yesterday are:

10 Liberty St., a 45-story, 287-unit building, owned by residential developer Leonard Litwin.

20 River Terrace, a 27-story, 293-unit building on the Hudson in Battery Park City, controlled by the Albanese Development Corp. and Northwestern Mutual Life Insurance.

Site 19B, a 24-story, 264-unit structure in Battery Park City controlled by Columbus Circle developer Stephen Ross.

Rooms With a View

The state Housing Finance Agency is offering $300 million in tax-exempt Liberty Bonds for three luxury apartment complexes near Ground Zero that include parking garages, rooftop terraces and fitness centers.

GRAPHIC: Photo by Jennifer S. Altman - Developers have proposed to build one of three luxury apartment buildings on this site near Ground Zero. Chart - Rooms With a View (see end of text).