A proposed change to the New York City Capital Resources Corp. that would have allowed it to issue bonds in place of the city's Industrial Development Agency was defeated at yesterday's monthly board meeting.
New York City Comptroller William Thompson, Jr.'s representative on the CRC's board, John Graham, who effectively had veto power over a proposed amendment to the corporation's certificate of incorporation, voted against the changes following a lengthy discussion.
"The proposed amendment would ... remove the CRC from any requirement to abide by future statutory reforms imposed on the NYCIDA, such as living wage or oversight requirements," Graham wrote in a letter to CRC executive director Kyle Kimble that was given to board members at the meeting. "These reforms were recommended by the Comptroller ... accordingly, the Comptroller's Office cannot support the amendment."
Currently the CRC can only sell bonds for projects that IDA is able to market bonds for, though CRC bonds are not subject to a $20 million cap on civic facilities projects for nonprofits. The proposed amendment would have "delinked" the CRC from current and future IDA legislation and allowed the CRC to sell bonds for any project that the IDA could have sold bonds for when the CRC was created in 2005.
While explaining the reasons for the amendment, New York City Economic Development Corp. president Seth Pinsky said that the proposed change would help out nonprofits that haven't been able to access the tax-exempt bond market for new projects or refinancings since the state IDA law expired in January. It remains unclear when the state Legislature will pass a new law.
"The goal was not, with CRC, to create 'IDA 2,' but it was to was to create a new lower-cost alternative primarily for small borrowers including not-for-profits," Pinsky said. "I don't think when this was created that there was any thought that IDA's universe could shrink, but this is actually what has happened."
Bills proposed in both houses of the state Legislature would have provisions to strengthen reporting requirements at IDAs, and the Assembly's version of the bill includes wage requirements that the Senate has rejected, forcing a standoff between the two chambers.
The comptroller's office proposed modifying the amendment to allow the CRC to refinance nonprofits' outstanding debt and would include a six-month sunset provision. But Mayor Michael Bloomberg's administration was not willing to limit the CRC's bonding to nonprofit refinancings and it proposed an 18-month to two-year sunset clause instead.
Graham rejected that proposal.
"The comptroller's office really sees no reason to do this total delinking at this stage of the game, or for an-18 month or two-year period when there are incremental steps the city can take," Graham said. "It's important to have accountability and transparency ... it's unfortunate that the CRC or the IDA has not embraced that concept but we think it's necessary."
Graham said that the CRC could be delinked from the IDA, but that they should then revisit the corporation's entire structure, not just link it to past IDA legislation.
With the defeat of the amendment, nothing has changed, but board members expressed a desire to continue working on a compromise.
"We thought that this was a rational and fair solution and we're still interested in solving this problem and helping out the not-for-profits," Pinsky said.
On another issue, Pinsky acknowledged that the New York Yankees had approached the IDA about selling additional bonds for its new stadium that is currently under construction in the Bronx. Assemblyman Richard Brodsky,D-Westchester, said that the Yankees were seeking an exemption from Internal Revenue Service regulations so that the franchise could sell $350 million of bonds backed by payments in lieu of taxes, like those it originally sold to begin the project. The Yankees organization would not confirm the amount of bonds they are seeking.
