Eastwood Owner Gets Ground-Lease Extension

The RIOC Board of Directors voted to give Eastwood a ground lease last week in a Thursday morning emergency meeting. It approved the specifics of a lease extension that effectively implements and ratifies a plan preserving subsidies for existing tenants, and controlled rent increases for others.

The meeting was held with notice shorter than required by law, making it technically an "emergency" session of the RIOC Board – getting the Eastwood action completed before the State’s new Public Authorities Accountability Act became law on April 1.

RIOC Board member David Kraut, who lives in Eastwood, called the vote "the most important this Board has ever taken." Afterward, he commented for The WIRE:

"The approval of the Eastwood lease terms has an unimaginably important impact on this community, not just because it settles the well-being of residents in the Island’s largest building, but provides in certain ways a model for future conversions.

"Because there will be conversions. The Mitchell-Lama program has ended, and there is no law forbidding owners from taking their buildings out of the program. That could foretell the doom of Roosevelt Island as a mixed-income community, which is part of the very vision on which our community was founded. But RIOC is dedicated to the mixed-income vision in every way the law allows, and RIOC has a lever with which to force at least a little compliance on owners of the original Northtown buildings.

"That lever is the ground lease. Owners leaving Mitchell-Lama need to refinance their buildings, but no bank will lend them money without a long-term lease. We use the occasion of ground lease negotiations to move owners toward protecting existing tenants, and in the Eastwood case we seem to have succeeded. It bodes very well for the future. Those of us who were motivated to move here by the original vision will continue to be able to afford to live here. It is as vital a thing as I can imagine."

Now three more buildings face similar hurdles in moving from Mitchell-Lama status to private financing. Island House has hit a snag in its accelerated plan (report on page 1), parallel to a path Westview must follow. Rivercross, the cooperative, is working on its own privatization plan and closely watching developments in the Island House/Westview cases.