NEW YORK CITY-A highly critical report by local advocacy group Good Jobs New York claims that Governor George Pataki and Mayor Michael Bloomberg have far too much latitude in allocating $8 billion in “Liberty Bond” funding earmarked for rebuilding Lower Manhattan.
According to GJNY, the private activity bonds to be issued by the state and city will be divvied out on a 50/50 basis by Pataki and Bloomberg, with much of the funding going to commercial real estate projects. The report criticizes what it says is a lack of accountability that allows the governor and the mayor to allocate the bonds without any public comment and with no cost/benefit or other analyses.
“There's absolutely no requirement for allocation of these bonds to be transparent or allow for public input,” Good Jobs director Bettina Damiani tells GlobeSt.com. “That's a concern, because the two people who are going to be allocating these bonds are the Governor and the Mayor. They've got to open up this process; $8 billion in bonds is a lot of money.” Traditionally, private activity bonds are used to finance transportation facilities, public works facilities, rental housing and utilities.
Also of concern to GJNY is the lack of any designated affordable-housing commitment connected to the funding. According to the report, no more than $1.6 billion of the $8 billion in bonds can be used for rental housing. Furthermore, none of the funding is required to be used for housing. And there is no requirement that any money used for residential projects must be dedicated to affordable housing. “There is an opportunity to build affordable housing here,” Damiani tells GlobeSt.com. “They should build as much affordable housing as these bonds will allow them.”
In addition, the GJNY report expresses concern that large corporations will fork up most of the $8-billion pie, leaving crumbs for the little guys struggling to stay afloat since Sept. 11. “For small business folks, this could be an opportunity,” Damiani says. “Clearly, affordable commercial office space in New York is a problem. So, even though the bulk of this money is going to commercial real estate, it could go to small businesses and not be dominated by the big powers in New York.”
Because recipients are not required to demonstrate need in order to qualify for funding, the report questions whether companies will pass along their savings to tenants or simply reap windfall profits at taxpayers' expense. Prior to designating uses and issuing the bonds, the report recommends that Pataki and Bloomberg adopt criteria and tests for necessity, develop a cost-benefit methodology, hold public hearings, implement an affordable-housing component and require public utilities to pass along savings in financing costs to ratepayers.
Pataki, Bloomberg, the Empire State Development Corp. and the Lower Manhattan Development Corp. failed to return phone calls regarding this story.
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