"Rather than requiring authorities to sell land at fair market value no matter the use--eliminating countless opportunities to create affordable housing, community centers and jobs--the new bill takes into account an authority's mission," Bloomberg says in a release. The land-sale provision, as now constituted allows a below-market sale, "if it is within the mission of the public authority, as defined by their authorizing statute," according to a legislative summary of the bill. However, the governor and either house of the Legislature can deny below-market transactions "within 60 days of receiving notification."
Bloomberg adds that "rather than requiring authority board members to act in the agency's narrowly defined goals without taking into account broader issues that may be important to city residents, the new bill allows them to exercise independent judgment while considering local interests." Both Bloomberg and Gov. David Paterson had expressed concern that the original version of the legislation, which was passed in July, was too restrictive.
Paterson said Wednesday that the revised bill will "preserve and even enhance the authorities' critical powers to promote economic development throughout the state." A vote by the state Senate was expected to occur Thursday afternoon.
The Public Authorities Reform Act of 2009, as passed by the Assembly on Wednesday, also imposes new rules limiting the creation of subsidiaries of public authorities. Previously, the scope of these subsidiaries was unlimited, one of the factors that over the years led to what Assemblyman Richard Brodsky (D-Westchester), chairman of the Assembly's Corporations, Authorities and Commissions Committee, has famously termed "Soviet-style bureaucracies."
Under the new legislation, creation of subsidiaries must be tied to "a specific project that the state authority has the power to pursue" and may not issue more than $1 million in debt. The subsidiaries must report annually to the state Authorities Budget Office, as part of a substantial expansion of the ABO's reach.
Among other provisions, the PARA legislation requires authority boards to establish finance committees to review proposals for debt issuance by an authority and its subsidiaries. It also requires each authority to devise a debt limitation plan. State and local authorities will also be subject to additional reporting requirements, such as authority board performance evaluations. Additionally, the state comptroller will now have the power to pre-approve no-bid contracts valued at over $1 million.
According to the state comptroller's website, there are 256 major public authorities in New York State, 764 entities with local jurisdiction, 70 entities affiliated with a state agency and eight entities with interstate or international jurisdiction. These range in size from municipal housing authorities to the Port Authority of New York and New Jersey.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
