N.Y. IDAs Face Sunset on Nonprofit Financings

A law allowing New York industrial development agencies to sell bonds on behalf of nonprofits is expected to expire at the end of the day tomorrow, leaving up to $1.5 billion of bond sales for nonprofits in a legislative limbo. With the Senate and Assembly still at loggerheads over different versions of extensions and reform bills, state Sen. Elizabeth Little said there would be no agreement before the civic facilities law expires, “but certainly before the end of July we’ll be able to reach an agreement.” The Assembly passed a seven-month extension of the law, which Assemblyman Sam Hoyt, D-Buffalo, said would allow time to negotiate reforms. But the Senate passed a two-year extension that would make a part of the extension for community care facilities permanent. Little said the permanent extension was a mistake and would be removed. Hoyt said the Senate was not negotiating in good faith while Little said the Assembly was holding nonprofits hostage to its agenda. The Assembly passed sweeping changes in its bill that included a requirement for prevailing wages for any construction or building renovation requires the approval by the Public Authorities Control Board for projects more than $100 million, requires payment in lieu of taxes agreements to be published and that a project’s financial information be reported to the state comptroller’s office. “If they want to jeopardize what some are claiming to be $1.5 billion worth of projects, then they don’t have to pass a seven-month extender when they come back on the 16th; if they care about economic development, they’ll pass the extender,” Hoyt said. He rejected the claim that they were holding nonprofits hostage. “The Assembly, listening closely to what the public and the media have said and reported, that agencies and authorities in New York state are unaccountable, often out of control, and we believe reform is critical ... the status quo is unacceptable.” Little introduced her own IDA bill into the Senate last week that contains some transparency measures but is much more modest in its sweep than Hoyt’s. Little said the prevailing wage issue was a sticking point. “I certainly support labor in a lot of ways but I could not get support for that in this bill,” Little said. According to the New York State Economic Development Council, a trade group representing economic development groups and professionals, $1.37 billion of projects could be jeopardized if the law isn’t extended. The state’s most active IDA and the fourth largest issuer in the state last year is bracing for an unwanted hiatus for projects in the pipeline, said New York City Industrial Development Authority executive director Kei Hayashi. “Any hiatus is not good but it’s a hiatus we’ll have to deal with,” she said. According to the economic development council, the NYC IDA has $306.5 million of projects, including a $190 million Yankee Stadium Parking Garage bond proposal, that could be affected. “Without that reauthorization there are going to be very real and negative financial impact on not-for-profits and statewide non-for-profits. Frankly, this issue seems to be getting lost in the shuffle of reform,” Hayashi said. But at the Franklin County Industrial Development Authority, a hiatus is not causing much concern. “My assumption would be that the legislation will be back in the next six to 12 months, and if the legislation is back in place these proposed projects would not be negatively impacted,” said Brad Jackson, executive director of the Franklin County IDA. “I’ve got time on my side.”A bigger issue is the reforms, which Jackson said could cause a lot more paperwork at an agency with just two employees. “The more I’m tied down with bureaucracy the less I’m available for business dealings in the county,” he said. “For small agencies like mine it’s too much of a burden.”