A fresh RIOC cover up, fantasizing a loopy Sportspark Bank, baffled as much as the failures triggering it angered. Soon, a web of state-assigned scapegoats pulled in one more.
By David Stone
The RIOC Cover Up Tumbles Into A Blame Game Shored Up with Last Minute Falsehoods
“David Hirschhorn is not willing to help. He doesn’t want to work with us to use the old space.”RIOC President/CEO Shelton J. Haynes, July 1, 2021
But just days before…
With multiple narratives conflicting over time, a RIOC cover up in search of a villain brought up a fresh rendition. President/CEO Shelton J. Haynes pitched the Sportspark Bank fantasy at his board.
His team, Haynes says, has at least one bank interested in building a branch in the athletic facility. But nobody with both feet in reality believes that.
CFO John O’Reilly, also, in a two-pronged approach, hinted at an amorphous obstacle.
“The issue is the banks themselves are reluctant to go to Main Street,” he said.
But curiously, like all RIOC stories on the topic, neither Haynes nor O’Reilly identified even one bank by name. And the none too inquisitive board went along like turtles sunning themselves on rocks.
But that was a curious omission.
Like broadcasting election results without saying who the candidates are.
Later, O’Reilly along with Haynes did a backflip, finding yet another villain, because as we already know, RIOC never makes a mistake. They needed one that would stick.
But we’re getting ahead of ourselves.
The story as it happened….
Amalgamated Bank, Westview and the RIOC Cover Up
Summer, 2019, Westview, as part of the Mitchell-Lama exit, ended a deal where storefronts were leased to RIOC. RIOC, in turn, leased the spots out to Hudson-Related’s Shops On Main. This left both out of Westview retail.
RIOC had contracted with Hudson-Related for managing the small strip of businesses. Those were Amalgamated Bank, China One, Roosevelt Island Wine & Spirits, and We Are One boutique.
But there was another tenant. The Roosevelt Island Operating Corporation occupied 591 Main Street for 45 years.
The state agency, however, was already in alliance with Hudson-Related, signing a contract for moving into the final Southtown building, once it was built. The estimate was two years, and so, they signed on with Westview for the necessary additional time at no charge. Options for two additional years, with rent, were included, just in case.
Hudson-Related was aggressive with the other tenants, as well, having established relationships. Efforts were underway in 2019 for luring Amalgamated into space H-R still controlled elsewhere on Main Street. Eventually the wine store agreed to moving into the long-empty stationery store space as soon as its current lease expires.
Then, the whole world shifted.
A pandemic and other delays…
“I was extremely disappointed when I first received notice from Amalgamated back in June 2020 that they would be permanently closing their Westview Branch,” recalled David Hirschhorn.
Hirschhorn is managing member of Westview’s ownership.
He immediately appealed to the bank to reconsider.
“The prospect for many residents, especially Island seniors,” he wrote to executive vice president Deborah Silidor, finding other services “is daunting.”
As leverage, he offered making Amalgamated a preferred lender during the upcoming Westview conversion. They’d profited from that role with Island House.
But prodigious obstacles loomed.
By now, many unknowns roiled by the fast growing coronavirus clouded all business considerations.
Even before that, all mainstream banks cut back branch operations. Some downsizing, others closing expensive storefronts in favor of online banking many customers prefer.
The wave brought on by technical advances and the internet was everywhere.
But Hirschhorn didn’t give up after Amalgamated’s rejection.
“I then,” he said, “reached out to a very senior person at a major bank with whom I have a close relationship.”
They “discussed the possibility of his bank opening a branch in the former Amalgamated space,” Hirschhorn reported.
“I also asked him, as a special favor to me, to reach out to his banking colleagues as to whether they would consider the Westview location for their banks.
“Regrettably,” Hirschhorn found, “there was just no interest.”
Sharing concerns with RIOC
At about the same time, Shelton Haynes settled into his new position as acting president/CEO at RIOC.
Hirschhorn scheduled a get acquainted telephone call with Haynes. Some issues were leftover from the previous administration, and as manager of two Roosevelt Island complexes, he thought getting acquainted early on made sense.
Inevitably, the hot issue of Amalgamated’s pending departure came up.
“I reached out to Haynes to share with him what I had learned and to see what RIOC might be doing,” Hirschhorn says.
“Mr. Haynes advised that his experience was similar to mine. I suggested that he explore with the relevant NYS agencies whether there was some State incentives that could be offered to attract a new bank and asked him to be back in touch with me.”
Although he did not hear from Haynes again, nothing indicated that they were operating at cross purposes or in any sort of conflict.
Nor did Haynes suggest anything amiss when he told his board, shortly thereafter, that he’d had an initial conversation with Hirschhorn.
But discontent among Roosevelt Islanders may have played a role in that.
Haynes had recently raised eyebrows with some residents, saying he was working with Hudson-Related at solving the pending bank crisis, without mentioning Hirschhorn or Westview.
Why, some wondered, when Hudson-Related no longer had interest in the bank location? Why not work with the building’s manager?
After all, Westview already had the vaults, the safe deposit boxes…
No RIOC Cover Up But No Action Either
In September, Amalgamated pulled out of Roosevelt Island, leaving just two, exposed, outdoor cash machines.
The loss mattered, especially with the coronavirus raging, lockdowns and many unable or unwilling to get on mass transit to Manhattan and Queens for banking business.
But those same forces distracted from some of their own effects. As with the rest of America, Roosevelt Islanders focused on the presidential election, holidays without family and friends and when would the pandemic ever end?
But not everyone lost track.
Raye Schwartz, a retired teacher and one of the communities most tireless advocates, finally had enough of of what she saw as RIOC’s failure at bringing a bank to Roosevelt Island.
In January, she appealed directly to Haynes, and she entered her concern in RIOC’s ticketing system.
“Amalgamated closed. We can’t make deposits or transfers between savings and checking. We can’t use mass transit to get to a bank in Manhattan or Queens,” she wrote.
Mass transit was essential workers only, at the time.
After getting no response for weeks, Schwartz was outraged in May when an official marked her ticket of “Medium” importance and closed it out of the system, never consulting with her or making any kind of fix. Nothing had been done.
The official was community relations manager Jessica Cerone, and there was a note that Cerone’s boss, Erica Spencer-EL got a copy.
If the goal was putting the issue to bed, it failed.
Demanding accountability from RIOC
Soon, enough heat built up under RIOC that they sent out an exculpatory community advisory:
Though the pandemic has caused a tremendous downturn in the market and made expansion for financial institutions distinctly challenging, the Roosevelt Island Operating Corporation (RIOC) has been looking at creative solutions to bring a bank back to Roosevelt Island. In doing so, we’re working closely with our local elected officials, the New York State Department of Financial Services, Cornell Tech, Hudson-Related, and other key stakeholders to realize this necessity.RIOC Advisory, May 24th, 2021
No mention of Westview, Hirschhorn or any Roosevelt Islanders or community groups. Not even a RIOC exec as author.
But it was just boilerplate facesaving, anyway, no solutions offered.
There was no evidence of any related activity anywhere. RIOC ended give and takes with local media, months before, shortly after Haynes got the job; so, no elaboration followed.
Hirschhorn hadn’t heard from Haynes since their initial conversation in July. Calls were not returned, and emails went unanswered.
“Until recently reading your article,” he wrote to the Roosevelt Islander in June, “and listening to Mr. Haynes’s report to the RIOC Board, I was unaware of any steps RIOC had taken and did not know they were courting banks to locate at Sportspark.”
RIOC Cover Ups Sprout Like Weeds
“My landlord isn’t a very nice person,” a frequent contact said in a text message.
She was talking about David Hirschhorn.
“What makes you say that?”
Her comment didn’t resonate with my experience.
As it turned out, she’d been talking with Haynes about bringing a bank to Main Street, thinking the closed Amalgamated site was the best bet. But…
“He doesn’t want to work with us to use the old space,” Haynes had told her.
“David Hirschhorn is not willing to help,” he added.
But just a week before, at a RIOC Operations Committee meeting, it was a different story.
Haynes and Chief Financial Officer John O’Reilly said banks were not interested in opening a branch on Main Street. Period.
But they made no mention of Hirschhorn, although the old Amalgamated site was the clearly the best and realistically the only option. Vaults and safety deposits were already installed, eliminating some of any banks biggest expenses.
O’Reilly, in fact, wagged his finger at Amalgamated. To stay, the bank needed $20 million in deposits to break even, he said, but RIOC already had $40 million of its own in the bank. Amalgamated discounted that, saying it was credited to their corporate site.
Although that sounded thinner than lake ice in May, O’Reilly and Haynes accepted it, according to their own account.
Why not take it out and redeposit it? Why not use it to lure another bank?
More important, why hadn’t we ever heard that story before? Was it a RIOC cover up?
And then, Haynes landed on yet another story with yet another bad guy: David Hirschhorn
Pressured to expand on his critical statements to Residents Association president Rossana Ceruzzi, Haynes released a statement:
Since Amalgamated Bank closed its branch on Roosevelt Island last year, RIOC has received several inquiries about bringing another bank to the island. As part of that strategy, RIOC approached Mr. Hirschhorn with the idea of bringing another bank to the Amalgamated Bank space but, unfortunately, he was not willing to entertain our proposal for a new bank at that location. And, unfortunately, many of the banks that have been approached to establish a presence on the island have declined our offer either because of limited storefronts large enough to outfit a new branch along Main StreetShelton J. Haynes, July 1st, 2021.
Surely, by then, Haynes knew that the “limited storefronts large enough to outfit a new branch” resulted from RIOC’s signing a lease for the old library space. The only other possibility was the long abandoned stationery store, which Hudson-Related committed to Roosevelt Island Wines and Spirits as a future home.
It was a pipe dream anyway as was the idea of a Sportspark Bank. Neither had the slightest chance of happening, but Haynes had to give the community something.
And so, after a year of failure, instead of standing tall like a trustworthy public servant, he threw shade on Westview and Hirschhorn.
RIOC cover up exposed
For Hirschhorn, there was concern that statements like this from Haynes might discourage any bank from considering the now empty location. RIOC’s longstanding neglect of Main Street infrastructure, particularly along the Westview strip, was already a negative of which Haynes and his successor were aware.
But Haynes left out some key information. As he knew, although Amalgamated was gone, a year remained on their lease. This meant the bank still controlled the space’s usage. No new bank could take over without complications and Amalgamated approval.
As the lease neared expiration, on June 30th, Hirschhorn gave it one more shot.
“I reached out to Amalgamated, but regrettably they cannot reverse course.”
And RIOC’s brain trust? After pointing fingers at Hirschhorn, they gamboled off on the holiday weekend, content apparently they’d successfully found a suitable scapegoat.
The RIOC cover up, a nervous scattershot blaming anyone and anything but themselves, leaves questions unanswered.
First, why was no effort invested in working with Westview’s management. After all, the state had some tools in hand that might help. They could dangle over $40 million in immediate deposits, for one thing, and the state, even in a pandemic, controlled considerable resources.
RIOC never mentions contacting more than a single state resource, banking regulators. But what about the Economic Development Agency? What about state and city operations ambitiously promoting minority and women owned businesses?
As far as we know, RIOC did none of that. Instead, Haynes and O’Reilly remained silent when a board member, David Kraut, cussed out elected officials, making them yet another scapegoat.
And the pair toyed with a fantasy Sportspark Bank, as if it made sense for a bank digging out vault space in a lightly used sports facility away from foot traffic under a noisy bridge.
From a scapegoat’s point of view…
Hirschhorn, Westview’s managing member was blindsided, but once the dust settled, he put his thoughts together.
After wearing out a series of scapegoats, from the pandemic to callous bankers, RIOC’s deep thinkers pounced on Hirschhorn.
First, they said he “was not willing to help,” without any evidence. Then, they migrated to, “No bank will consider Main Street.”
Finally, Haynes landed what he hopes is a knockout punch, absolving himself and his “team.”
“As part of that strategy, RIOC approached Mr. Hirschhorn with the idea of bringing another bank to the Amalgamated Bank space but, unfortunately, he was not willing to entertain our proposal for a new bank at that location.”
Hirschhorn never saw any such proposal, and a year later, Haynes cited it for the first time.
And nobody but nobody was aware of any organized strategy.
Like so much of what RIOC’s come up with, it makes no sense. With sizeable empty space looming, why wouldn’t Westview’s management not “entertain” RIOC’s proposal, if there really was one?
In the end, what’s the cost of a RIOC cover up? Of whisking away failure by scapegoating any available target?
Of RIOC’s inability to work evenhandedly with so many of the Island’s stakeholders?
From residents to media to real estate managers, the state fails, weakening the community by incessantly dividing it.
How can this trainwreck end under current conditions?
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