RIOC makes its move, this week. “RIOC main offices will be relocating from 591 Main St. to 524 Main St.,” it said. But like most things RIOC, important details went unsaid.
By David Stone
RIOC’s main office move comes after 45 years, rent free, in Westview. With few details known beyond annual rent at $75K, the state again spends money collected via the RIOC tax without any discussion.
Here’s what you should know…
Approving the move into 524 Main Street, RIOC’s board committed to a new annual expense, going from 0 to $75,000 in a flash. But the sheepish board failed to ask any questions when chief counsel Gretchen Robinson presented the proposal.
What she didn’t tell them, what they were too drowsy to ask is that RIOC never entered discussions with Westview about staying on. Negotiating the last freebie lease, RIOC reached agreement on two option years where they’d pay $110K per year.
Robinson quoted that figure in creating an impression that RIOC was saving a bundle. But neither she, CFO John O’Reilly nor president/CEO Shelton Haynes ever asked Westview about renegotiating.
A decision for going with favored real estate developer David Kramer was made, apparently, without considering other options. That, however, is fraught with entanglements. Among them, working with a single vendor, could RIOC get the best possible deal?
RIOC’s main office move, paying rent on property they already lease
In her public presentation, Robinson did not mention that RIOC already leases 524 Main Street from Roosevelt Landings’s managers. And Roosevelt Landings controls the space through a ground lease with RIOC.
That sounds complicated because it is, and RIOC owed Roosevelt Island an explanation. But one was not forthcoming.
Once again, the state operated in secrecy, making deals behind closed doors.
Historically, developers sign ground leases with RIOC. When the buildings open, RIOC then leases retail spaces from the developers. That changed ten years ago when, after failing badly at it, RIOC recruited Hudson-Related for attracting businesses and nurturing the ailing retail strip.
Running Shops on Main, Hudson-Related pays RIOC about $100k per month.
Whatever residents thought of that deal and its aftermath, the pair later made an exception, opening up 524 Main to Swift Emergency Medical, months after the New York Public Library moved out.
Like the latest arrangement, RIOC never disclosed any details for the transaction. They belatedly made public payments of over $65K per month to Swift for running a COVID rapid testing site. It’s unknown how much of that, if any, passed through to Hudson-Related.
Among its performance goals, RIOC pledges to “effectively communicate with all stakeholders.”
In reality, they’re as opaque as a brick wall about spending money collected from Roosevelt Islanders.
One collateral effect of RIOC’s main office move is crowding out spaces previously reserved for community groups.
Staffing bloat expanded space into new offices under Motorgate, a few years ago, but even that’s apparently not enough now.
Rooms previously permitted out to religious groups, performers needing rehearsal space, etc. filled up with storage. Fears that 524 wasn’t big enough for RIOC’s needs rose when local nonprofits were unable to get permits through the end of the year.
The most egregious effect of abandoning 591 Main Street without negotiations came when the state seized the second floor of Blackwell House for its president/CEO Shelton J. Haynes. Previously unimaginable, RIOC took over the space after Roosevelt Islanders spent millions restoring the historic farmhouse. That included funding for cost overruns resulting from RIOC’s own poor oversight.
Shrinking retail possibilities in RIOC’s main office move
RIOC’s main office move takes off the market another large chunk of real estate available for businesses. Given the grim state of Shops On Main, it may be just as well after Hudson-Related’s decade long failure to vitalize the corridor.
But the filling up of empty storefronts with government offices echoes the desultory tones of the demise of other downtown areas across New York.
Government becomes occupier of last resort when businesses back away.
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