Despite Drawbacks, Board 1 O.K’s Liberty Bond Financing

No one would argue that rebuilding downtown after Sept. 11 isn’t an important, even an urgent task-but should it trump long-standing standards governing affordable housing in Manhattan?

That’s the question Community Board 1, which covers the area surrounding Ground Zero, wrestled with-and eventually answered with a yes -at its Sept. 17 meeting, when it voted to support two downtown residential development projects.

At the meeting, two developers and the state of New York asked the community to support Governor George Pataki’s plan to apply $340 million of the $1.6 billion in federal tax-exempt housing development funds-so-called Liberty Bonds-to finance three downtown luxury apartment buildings. At the same time, they would like to limit the percentage of the buildings’ units reserved for low- and middle-income tenants to 5 percent, instead of the Manhattan standard of 20 percent for buildings built with such funds.

Although the ground has already been broken at 20 River Terrace on the Hudson waterfront and Liberty Bonds allocated to finance it, the other two buildings-one at 10 Liberty Street and the other in Battery Park City-have yet to be approved for government financing.

In general, board members welcomed these first signs of residential construction in lower Manhattan since the terrorist attack. But the idea of granting the developers the use of government funds without asking them for more in return met with resistance. The new apartments will be well out of the reach of most working-class New Yorkers, such as the firefighters and police officers who were the heroes of Sept. 11, argued Bettina Damiani, project director at Good Jobs New York, who was in attendance at the meeting. Indeed, the 800-odd new units will rent for approximately $2,500 a month for one-bedroom apartments and $4,000 a month for two-bedroom apartments. Even the 40-odd “affordable” units are still beyond most New Yorkers’ means, she told the board.

“Lower Manhattan is in a rather desperate situation,” district manager Paul Goldstein told The Observer . “Since 9/11, we’ve had virtually no new construction down here. It’s been extremely difficult for developers to proceed with planned projects. We want to help the economy of lower Manhattan, to give some signal that there is life down here, to bring residents and businesses into the area.”

Representatives of the developers-Glenwood Management and the Related Companies-told board members that they need the Liberty Bonds to fund these buildings because, in the words of Glenwood Management’s executive vice president, Gary Jacob, “the numbers just didn’t work anymore” after Sept. 11.

That opinion was seconded by Sally Crockett, spokeswoman for the State Housing Finance Agency, who explained that the buildings would not be financially viable if they had to adhere to the old affordable-housing standard. She also noted that the federal law establishing the Liberty Bonds does not specify any affordability requirements for residential projects financed with them.

The developers say they have no choice but to pursue government financing, because private lenders just won’t give them the loans to build downtown. Buoyed by government grant programs, the downtown residential vacancy rate is near pre–Sept. 11 levels, at just 2 percent. However, downtown rents are running 5 to 10 percent below pre–Sept. 11 market rates, according to Citi Habitats, a residential real-estate firm.

Board member Bob Townley called below-market rental rates downtown “a myth,” noting that he just renewed the lease on his Battery Park City apartment at pre–Sept. 11 terms. But Robert Silpe, senior vice president of development at the Related Companies, dismissed the board members’ skepticism.

“People should take us at face value,” he told The Observer . The board, purely an advisory body, is ill-equipped to do otherwise. In that light, board member Liz Berger, who lives near 10 Liberty Street and laments the boarded-up storefronts and vacant lots near her home, argued that the need to jump-start downtown development should supersede ambivalence about the specific terms of any particular project.

“I don’t think we should be having larger public-policy debates on the back of existing projects that meet the requirements of existing programs,” Ms. Berger told The Observer .

Board members ultimately agreed with her, but recommended in their resolution that future Liberty Bond–

financed apartment buildings contain more affordable housing.

-Megan Costello

Homeless Encampment Raided

Has Operation Clean Sweep been swept under the rug during Mayor Michael Bloomberg’s watch? While its presence may not be as high-profile as it was during the Giuliani administration, the program seems to be alive and well, as Christopher Dorrian, Manhattan coordinator of the city’s Community Assistance Unit (C.A.U.), illustrated at the Sept. 19 meeting of Community Board 9, when he informed the assembly that a nearby homeless encampment had recently been raided.

Mr. Dorrian didn’t plan to speak to Board 9. He attended the meeting, as he does every month, to show support for the community and, well, to listen. Because the Mayor considers the C.A.U. his “eyes and ears,” it is probably fair to say that Mr. Dorrian hadn’t bargained on serving as the “mouth” as well, but he relented when pressed by district manager Lawrence McClean.

The city, Mr. Dorrian reported, recently took down a homeless camp under the West Side Highway at 134th Street. “You know that encampment?” Mr. Dorrian asked the crowd, and then announced that he, along with the NYPD’s 30th Precinct, the Department of Homeless Services and N.Y.C. Social Services, “took down the shelter and got rid of the homeless.” An uproar ensued. “Did you sell them to McDonald’s?!” yelled a woman in the back. “It sounds like you’ve thrown them in the garbage!” said board chairman George Goodwill.

As the ruckus subsided, Carolyn Thompson, the board’s first vice chair, assured the board that there is “always sensitivity for anyone removed.” Mr. Dorrian nodded in agreement and reminded the board that by law, social services cannot be forced upon anyone, and that every person involved in this particular event had refused assistance. Mr. Dorrian would not provide the number of homeless people involved, and the Department of Homeless Services did not return The Observer ‘s calls.

Operation Clean Sweep-which Mayor Bloomberg prefers to describe as quality-of-life “initiatives,” not “sweeps”-is not a recent innovation. While Mr. Giuliani’s name has come to be closely associated with the sweeps, the practice actually dates back at least to the 19th century, when New York City implemented vagrancy laws that had been demanded by the merchants and shopkeepers of the time.

The process, according to Patrick Markee of the Coalition for the Homeless, is straightforward and (while not typically publicized) ongoing. Mr. Markee told The Observer that the NYPD first identifies a group of homeless people or an encampment and then contacts the Department of Homeless Services, which sends outreach-program agents to observe and offer services. This is basically a warning that the NYPD will soon come.

The board wanted to know why they had not been informed in advance about the raid. Mr. Dorrian didn’t offer an explanation, but he did promise that they would be notified in advance of any future operation. Board member Vicky Gholson questioned what had prompted the sweep, asking Mr. Dorrian if an expansion of the West 135th Street Marine Waste Transfer Station was in the works. Mr. Dorrian denied knowledge of such plans.

Mr. Markee told The Observer that the Coalition is working with the Department of Homeless Services in attempts to improve the city’s shelter system and make it a more viable alternative to encampment living. He also stressed the Bloomberg administration’s more moderate approach over that of its predecessor. Police Commissioner Ray Kelly “is a decent guy, sensitive to the issues,” Mr. Markee told The Observer . He said he remembered the days of “dumping people’s stuff in Dumpsters” and said that he hadn’t seen anything like that in the past six months.

-Sara Pepitone

Oct. 1: Board 7, St. Luke’s Roosevelt Hospital Center, 1000 10th Avenue, 7 p.m., 362-4008.