Newsday (New York)

June 4, 2003 Wednesday QUEENS EDITION

SECTION: BUSINESS & TECHNOLOGY, Pg. A44

LENGTH: 514 words

HEADLINE: Liberty Bond Project OKd;
HDC sets $82M for apt. site despite lack of affordable units

BYLINE: By Katia Hetter. STAFF WRITER

BODY:
The city Housing Development Corp. approved one Liberty Bond project in lower Manhattan yesterday and agreed to consider six more - all without receiving written testimony from some opponents of the deals.

The agency approved $82 million - part of $1.6 billion in Liberty Bonds dedicated to rental housing - for the 27-story, 398-apartment building at 90 Washington St. The building, being developed by the Moinian Group, will have no affordable housing units.

Several affordable housing groups and Councilman Alan Gerson's policy director testified at a May 5 public hearing about the lack of low-income housing in the Liberty Bond program, but copies of their testimonies were not given to HDC board members, agency spokeswoman Tracy Paurowski confirmed. The board members were briefed on the hearing, but the agency is only required to send copies of written testimony to the mayor's office, she said.

"It's disappointing that board members were expected to take a vote without being informed of the issues raised by advocates and public officials, especially since thus far, the mayor and the city have failed to live up to their commitment to provide affordable units in the Liberty Bond projects," said Michael Kadish, Gerson's policy director.

The city housing agency has 10 Liberty Bond projects under consideration, in all worth more than $1 billion.The city agency is only authorized to approve $800 million for the projects. (The state is in charge of the other $800 million.)

That means "it's first come, first served," Paurowski said, with the city agency approving applications of the first developers to complete the requirements of their deals.

The city is charging developers a 3 percent fee to finance construction of low-income housing in other parts of the city, while the state is requiring developers to set aside 5 percent of the apartments as affordable housing. The 5-percent set-aside is lower than the normal state Housing Finance Agency requirement of 20 percent. And under the Liberty Bond program, moderate-income housing is defined as 150 percent of the area median income - about $94,000 a year.

"By supporting these Liberty Bond projects, the HDC has made a conscious decision to rebuild lower Manhattan in an economically segregated manner," said Bettina Damiani, director of Good Jobs New York, which tracks economic subsidies to companies within the city, and has lobbied for affordable housing in the deals.

The state HFA has already approved $348.5 million in bonds for lower Manhattan rental construction and is considering two other projects worth $202.5 million.

Congress created the $8 billion Liberty Bond program to encourage redevelopment of lower Manhattan and the city after Sept. 11. The state and city each received $4 billion in bonding authority, which allows government to grant tax-free status to bonds being sold by developers to finance their projects. In addition to $1.6 billion for rental housing, $6.4 billion is set for commercial construction in the city.