Monday, July 30, 2018

VIDEO: de Blasio Administration Must Take Back Two Acres from Queens Development Group

A new video released by Willets Point United demands that the de Blasio administration act before a December 2018 contractual deadline, to protect taxpayers’ interests by reclaiming two acres of Willets Point property which the Bloomberg administration gave to Queens Development Group.

In the video (below), Willets Point property owner Irene Prestigiacomo explains the give-away of the two acres to Queens Development Group; the comprehensive development project which the property was supposed to facilitate; the court decision that effectively prevents that project from proceeding; the contractual provision that allows the City to take back the property under present circumstances; the lack of action by the de Blasio administration thus far to reclaim the property; and City officials’ fiduciary responsibility to taxpayers to do so before the deadline lapses.

Ms. Prestigiacomo asks (06:38): "As corrupt as this City sometimes can be, have we really reached the point where a developer can keep public property worth tens of millions, without delivering any of the project that was the basis for it to receive the property in the first place?"

The Basic Premise

A developer that receives public property worth tens of millions of dollars to facilitate a project, should not be allowed to keep that property when the developer is unable to proceed with its project. That is especially so, when the City’s contract with the developer allows the City to take back the property under the circumstances.

And yet, that is exactly what is occurring right now at Willets Point. As of this writing, Queens Development Group is keeping approximately two acres (90,500 square feet) of what used to be taxpayers’ property, even though Queens Development Group cannot implement the project that was the basis for it to be awarded that property.

To stop this, City officials must act before a contractual deadline of December 20, 2018 – presuming that the de Blasio administration hasn’t already somehow squandered the opportunity.

Below are supplemental details, not mentioned in the video.

Significant Taxpayer Costs to Originally Obtain the Two Acres

Before the two acres were given to Queens Development Group, they were City property – and before that, they were owned by a private party who operated a business on the site.

To acquire the two acres from the previous private owner, the City paid taxpayer funds of nearly $14 million, plus sweetened the deal by giving the prior owner other City-owned College Point Corporate Park property estimated to be worth between approximately $1.8 and $7.2 million, meaning that it cost the City as much as $21 million dollars to acquire the two acres of Willets Point land. Viewed differently, other Willets Point properties in the vicinity of the two acres have sold for a typical price of $400 per square foot – which if applied to the two acres, means they are worth $36,200,000.

Rather than recouping the cost of acquiring the property as it had said it would, the Bloomberg administration gave the two acres to Queens Development Group for $1 (one dollar).

Willets Point "Iron Triangle," with the two acres owned
by Queens Development Group shown in red, and the
Bloomberg-era "Phase One" portions shown in white.

The City is able to rescind that sale during a limited timeframe, under special circumstances such as those in the aftermath of the NYS Court of Appeals decision in Avella v. City of New York, which effectively prevents Queens Development Group's comprehensive development project from proceeding.

No Overlap Between the Two Acres and the New Six Acre Willets Point Project

Recently, the de Blasio administration announced a new plan to lease six acres of Willets Point Phase One property to Queens Development Group, to become an affordable housing development with a school. Those six acres to be leased to Queens Development Group are physically separate from the two acres previously sold to Queens Development Group by the Bloomberg administration.

Revoking the sale of the two acres to Queens Development Group does not prevent the separate, new, six acre affordable housing project from proceeding.

Deadline to Act

Unless the de Blasio administration has somehow squandered it, there is a window of opportunity to reclaim the two acres from Queens Development Group: The City must act before December 20, 2018, which is five years after the original date of sale.

Per the First Amendment to Amended and Restated Purchase and Sale Agreement between the New York City Economic Development Corporation and Queens Development Group dated December 20, 2013:

“§ 17.3  Terms of Options.
In order to exercise the … Call Option …, the party or parties entitled to exercise the Option shall deliver a notice to the other party or parties prior to the … Call Option Outside Date”.

The “Call Option Outside Date” is defined as five years after the date of the original sale, which in this case will be December 20, 2018.

(Disclaimer: Willets Point United shall not be responsible if a different deadline date applies for any reason, and encourages the accountable City attorneys to independently calculate the correct Call Option deadline date pursuant to all applicable contract provisions.)

Tuesday, February 6, 2018

“New Plan,” “New Deal” – But No New Competitive Bid?

From the outset of the proposed Willet Point development, it has been understood that a developer would be selected via a competitive sealed proposal process.

The City’s selection in 2012 of Queens Development Group (QDG) to develop phase one of Willets Point – to the exclusion of all other firms that submitted proposals – was predicated on QDG’s unique proposal that expanded the project to include a mega-mall on public parkland (leveraging a lease already held for said parkland by the Mets’ owners, who comprise half of QDG).

In the aftermath of the Court of Appeals decision which prevents QDG from implementing its proposal, Mayor de Blasio should have immediately availed himself of the opportunity afforded by the contract between QDG and the Economic Development Corporation (EDC), to rescind the sale of Willets Point property to QDG and cancel the contract award. Then, the City would have been free to issue a new request for proposals (RFP) to the entire present-day development community, for the “new” six-acre project which apparently is now the priority.

Instead, there has never been a competitive sealed proposal process for development of six acres of Willets Point property stemming from the intersection of Willets Point Boulevard and Roosevelt Avenue. Think of it: A reasonably-sized, six-acre project would likely attract a larger pool of developer proposals than did the 2012 RFP which encompassed the enormity of the Willet Point phase one site. There is absolutely no basis to think that QDG is the “best” developer for this six-acre site and configuration, because the de Blasio administration did not implement any competitive sealed proposal process (although it should have done so).

In its article published on February 6, 2018, the New York Times repeatedly refers to the six-acre project as a “new plan” and “new deal.” We agree, but wonder why there was also not a “new” RFP and “new” competitive sealed proposal process to determine it.

Beyond the 2012 selection of QDG as developer, the subsequent decisions by the Deputy Mayor, EDC, the New York City Land Development Corporation and the Queens Borough Board to dispose of hundreds of millions’ worth of City-owned property to QDG, were all predicated upon QDG’s prior, now-defunct proposal which expanded the project to include a mega-mall on public parkland.

We encourage investigations by the public, the press, the Comptroller and enforcement agencies, regarding whether or not it is consistent with City policies and procedures for the City to designate QDG to implement a “new plan” without issuing any new RFP, and for the City to dispose of valuable public property to QDG pursuant to decisions that were wholly based upon a different, defunct plan.

We also recommend that the press ask these questions:

•   What price is the de Blasio administration establishing, for the sale of Willets Point property to QDG? $1 (one dollar) per the Bloomberg administration, or a legitimate price that recoups the taxpayers’ cost of acquiring the property?

•   The New York Times mentions that QDG will remediate Willets Point property by a certain date. Does that remediation refer to the six-acre section of Phase One, or to the entire 23 acres of Phase One? If the latter, why would QDG remediate that land, prior to any decision about what will be built there?

•   Given that the Queens Borough Board is to evaluate and vote on the “business terms” of an award of development rights for the Willets Point project, and thus far the Borough Board has only voted on QDG’s prior development proposal which featured the mega-mall (which has been eliminated from the “new plan”), will the City seek a new approval of the Queens Borough Board for the changed iteration of the project?

•   During the January update meeting between Queens Community Board 7 (CB7), QDG, EDC and Mayor’s Office representatives, CB7 repeatedly lamented being excluded from ongoing discussions between the QDG, QDG and the Mayor’s Office about new plans for Willets Point. Thereafter, was CB7 involved in any such discussions, prior to the New York Times publishing the new Willets Point plan on February 6, 2018? Or, was CB7 still excluded by QDG, EDC and the Mayor’s Office?

•   Where is there an Environmental Impact Statement (EIS) document that analyzes impacts of a six-acre development stemming from the intersection of Willets Point Boulevard and Roosevelt Avenue, with no new Van Wyck access ramps present? The 2013 Supplemental EIS analyzed a project configuration that included the mega-mall, with no new Van Wyck access ramps present during the initial phase.