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$100M in housing funds stuck in power play.

$100M in housing funds stuck in power play

Requests for Proposals to build permanent 500 units of housing for the homeless in New York City have been answered by more than 200 developers, however, the more than $100 million designated is in limbo because of a squabble between the Mayor's Office and the City Council.

The three-year-old fund, a joint effort between the city and state, was slated to be allocated by the now defunct Board of Estimate, and is now the subject of a fight between the Council and Mayor's office over who will disburse the money.

John Deacy, spokesman for the New York State Housing Finance Agency, who is the main State agency responsible for overseeing construction and granting contracts, said plans are proceeding to spend the remaining money, said: "Since we are managing the projects, we have been able to send out RFP's and do all of the incidentals of the planning process. But we can't sign the financing for any new projects until the financing is available.

This fight affects the future of 100 units of housing that are to be built by Andrew Cuomo, son of Governor Mario Cuomo, who was given "preliminary site control" over a parcel of city owned property on East 14th Street between Third Avenue and Irving Place. The development is estimated to cost $14.4 million and is only one of about eight other projects being held up because of this dispute.

Barbara Fife, deputy mayor for planning and development said Cuomo's HELP program was granted control of the vacant, 30,000- square-foot property that runs from East 14th to 13th Streets, next to the dilapidated Luchow's property. Cuomo will now be able to proceed with a detailed plan for 100 units of housing for homeless, and affordable apartments.

Nancy Devine, a top aide to Fife, said preliminary site control of the property means that the city is holding the property for "the use that was described by the HELP program. She also said that there was a time frame within which the project must be underway, leaving it at the mercy of a legislative hitch.

The hitch involves a trust fund established under the bill dubbed the "Permanent Housing for Homeless People (PHHP)." It comprises $85 million from the state matched dollar-for- dollar by the city to be spent for 429 apartments for the homeless under phase one, which was disbursed by the Board of Estimate in 1989. However, since the Board of Estimate was eliminated under Charter Revision, the more than $100 million remaining of this trust fund is frozen because nobody in government has the power to touch it.

Devine said she has consulted with the City Law Department and has found that "in the absence of legislative change, our hands are tied. "As a result, more than 450 apartments for homeless people cannot be constructed, including the 100 units proposed by Cuomo.

A Larger

Fight Looms

The reason that there has been no change in the law according to state and local officials, is the Mayor's office wants sole control of disbursement of the money, while the City Council leadership is also seeking a hand in disbursement. According to City Hall insiders, City Council Majority Leader Peter Vallone is leading the challenge to the mayor's disbursement power. Officials for Vallone did not respond to the questions.

Bernice Spitzer, spokesperson for the City Council, called the mayor's version of the PHHP "a power play." She said the bill effectively, eliminates the council role in determining the use of the money.

"The Council has new fiscal and land use responsibilities because of the new Charter and the administration has put forth a bill that cuts the council out," Spitzer said. "We have nothing against the (Cuomo) project and we would be moving along if the administration hadn't effectively tried a power play."

However, a source in the mayor's office said the mayor is "inclined to support a version of the bill that will include the council, as well as the mayor in decision making."

"There are a lot of bills in Albany that make reference to the Board of Estimate and this is one of the many that have to be straightened out," the source said.

The source, however, said it was unclear as to how long it would take to work out a compromise with the Council.

Paula O'Toole, spokesperson for State Senator Manfred Orhenstein said that when a number of bills were changed during "clean-up" for the new Charter, there was never an agreement forged between the Mayor and Council on who will disburse the funds.

"This money is in limbo until the Mayor and Council determine who is responsible," O'Toole said. "This money can't be spent until an official entity is given permission on this question. We are waiting for the city to act.
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Title Annotation:squabble between Mayor's Office and NY City Council
Author:Maisel, Todd
Publication:Real Estate Weekly
Date:Jan 22, 1992
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