Hudson-Related’s Shops On Main went from idea to reality in 2011. The deal cut with RIOC celebrates its 12th anniversary later this year, but has this marriage ever been successful? Let’s take a look.
By David Stone
Taking a long view, we studied RIOC’s last annual budget before signing with Hudson-Related and the launch of Shops On Main. That was for 2011.
In comparison, did we ever get the “shock and awe” Hudson president David Kramer boasted of or something more akin to Flops On Main? Has it always been more like Shock and Awww…?
But Kramer told The Daily in a recent Q&A, he believes the initiative has been successful, largely because businesses held during the pandemic.
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But, especially for RIOC, the numbers don’t look so good, and some are startling.
Before Shops On Main…
Back in 2011, Steve Shane, who opposed the Hudson-Related deal, was still RIOC’s president. And David Paterson was governor.
Fernando Martinez was vice president of operations and Steve Chironis was vice president and chief financial officer. In 2014, both left their jobs after a scandal raked the corruption out of RIOC, and Martinez eventually served time in prison.
In a budget signed off on by Chironis and approved by the board, RIOC projected commercial revenue of $1,502,000 for the coming year.
And that was before Riverwalk Commons with Duane Reade, Starbucks, Fuji East and others added to the mix.
A 10-year projection in Shane’s last budget envisioned a commercial revenue increase to $2,349,000 by 2021 with no new resources added.
But this year’s approved budget says they’ll get only $1,726,000, over $600,000 less than before Shops on Main and all the new stores in Riverwalk Commons and The Sanctuary.
Flip that around any way you like, it’s still not anything near success.
And one more thing. After moving its headquarters into 524 Main Street, RIOC now actually pays Hudson-Related $75,000 per year in rent. It gets kicked back as part of the Hudson-Related deal, making it even less attractive. But consider this: For its entire previous existence, the state agency operated rent-free in Westview.
Flops On Main…?
What went wrong?
Comparisons are hard because, with the income now in private hands, details are scarce. But, while being something of a revelation, the 2011 numbers also expose some curiosities.
We’ve criticized RIOC’s leasing of the old library space at 524 Main. But that criticism darkened after seeing the 2011 numbers. The New York Public Library paid RIOC $21,000 annually before Shops On Main, projected to $28,000 in 2021.
But RIOC agreed to pay Hudson-Related $75,000, nearly tripling the projection, without negotiating with any other potential space providers. And the space is so small, RIOC was forced into seizing other office space in the community. Its lack of appropriate restrooms or emergency exits prompted an OSHA complaint. The notorious takeover of Blackwell House was one result.
Until, this year, RIOC enjoyed 4,664 square feet, rent-free, at 591 Main Street, in Westview, for four decades.
Although the details provided by RIOC in 2011 are not matched with any contemporary figures, some conclusions are unavoidable.
Conclusion: Shops On Main Flops for RIOC
Once you add in other commercial revenue not included in the 2011 budget, the losses for RIOC and the community are stark. Not only are they faced with more of the same empty storefronts, but residents must also foot even more of RIOC’s ever-bloating budget through the hidden RIOC tax.
Without more detail, estimations are inexact, to say the least, but from what we know, income for RIOC on commercial rent should be at least double.
And here’s an odd twist, the income is held down by Hudson-Related’s claim to be losing money with Shops On Main. We can believe it, but that saves them from profit-sharing with RIOC built into their agreement.
In spite of all this, we are not aware of any debate within RIOC or its board over the value of continuing this deal. Or of investigating further.
But when Governor Cuomo took with him the tight-fisted control over RIOC from 150 miles up the Hudson River, we hoped for some positive change. Hochul did not deliver, to put it nicely.
Here again, we must rely on our elected officials, Assembly Member Rebecca Seawright, Senator Liz Kreuger and City Council Member Julie Menin. Seawright, for one, has shown a keen interest in reform on Roosevelt Island.
With RIOC’s board next to useless in terms of governance, Seawright, Kreuger and Menin grow more relevant for Roosevelt Island’s future than ever before.
Someone needs to look more closely at what, for RIOC, is Flops On Main as well as the whole financial operation.
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