Provides a period of probable usefulness for the financing of a leasehold interest in a certain parking garage by the city of White Plains, of twenty years.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7715
SPONSOR: Paulin TITLE OF BILL:
An act to amend the local finance law, in relation to providing a period
of probable usefulness for a leasehold interest in the major portion of
the parking garage building located at 237 Martine Avenue in the city of
White Plains
PURPOSE:
The purpose of this bill is to authorize the City of White Plains to buy
out the leasehold interests in the City Center Garage (the "Garage") to
obtain fee title to the property and to set a period of probable useful-
ness for said purpose for purposes of the Local 'Finance Law.
SUMMARY OF PROVISIONS:
Section 1 authorizes the City of White Plains to expend City funds or
bond proceeds to buy out the leasehold interest of the Garage. Section
2 sets the period of probable usefulness of such object or pose at 20
years related to the Local Finance Law.
Section 3 sets the effective date.
JUSTIFICATION:
The Garage was a public/private partnership among the City of White
Plains (the "City"), acting through its not-for-profit affiliate, White
Plains Center Local Development Corporation (the "LDC"), and LC White
Plains LLC ("LCWP"). The City had deeded the Garage site to the White
Plains Urban Renewal Agency ("URA") with the property to revert to the
City 25 years after the issuance of the. final certificate of occupancy
for the Garage. At the same time the URA leased the property to the City
and LCWP to build a 7 story garage on the property which lease was to
expire upon the LC Final Financing Payment Date as defined in the Park-
ing Operation and Maintenance Agreement ("POMA") among the City, LCWP,
the LDC and the White Plains Parking Authority ("WPPA"). The City
assumed all the obligations of the WPPA, including those set forth in
the POMA, upon its dissolution pursuant to Chapter 136 of the Laws of
2004 of the State of New York.
LCWP financed its portion of the garage through revenue bonds issued by
the Westchester County Industrial Development Agency ("IDA"). The bonds
were to be paid by a bank, as bond trustee, and the payments were guar-
anteed by an insurance policy. The POMA, through other documents,
provides that all revenues from the garage in excess of the allowable
expenses (both normal and non-recurring) budgeted by the City and LCWP
are used to pay debt service on the IDA revenue bonds. Such payments
have been made since the opening of the Garage in 2003. However, the
City must keep the books for the Garage separately from the books for
the remainder of the City's parking system to account for the amount to
be used to pay off the revenue bonds.
The revenue generated under the POMA was sufficient to make all princi-
pal and interest payments until recently. The revenue generated by the
Garage substantially declined during the pandemic. The revenues were
sufficient to pay both principal and interest for the bonds starting in
October 2004 until the October 2022 payment where the full payment could
not be made. The bond trustee paid the principal deficiency through the
insurance policy. Because of the decline in parking revenues future
principal payments will likely be difficult to make in full. The LC
Final Financing Payment may well be substantially delayed as interest
accrues on the deficiencies and legal expenses are added. In addition,
the bond insurer, because of the default, has stepped into the budgeting
process to determine the allowable expenses and is resisting expenses
needed to maintain and operate the facility effectively in order to
reduce expenses and have the deficiency paid off faster.
In order for the City to integrate the Garage into its parking system as
well as properly maintaining and operating the Garage to the appropriate
level, the City needs to make the LC Final Financing Payment to be able
to obtain unencumbered fee title to the Garage years earlier than under
the current situation. The City will then be entitled to all revenues
received from the Garage as well as being able to operate the Garage
like the rest of its system as well as properly maintaining it. Through
the use of favorable tax-exempt bonds the City expects to obtain a
favorable return on this earlier acquisition of the fee to the Garage.
LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This act shall take effect immediately.
