Herbert E. Berman President Roosevelt Island Operating Corp. e-mail: HBerman@rioc.com

As you know, change continues to affect Roosevelt Island, including developments in the ownership structures of apartment buildings that residents call home. I want to take this opportunity to give you an update on developments at Eastwood.

When the owner of Eastwood sought to take his building out of the Mitchell-Lama program, RIOC entered negotiations to extend the ground lease. The original lease is set to expire in 2032. In order for the owner to get private financing for improvements, the RIOC board has agreed to extend that ground lease until 2068.

We have been driven in those negotiations by several important points. First of all, we must always act in accordance with legal and fiduciary obligations and sound business practices to protect the corporation’s interests. Second, we have approached the negotiations at Eastwood, as well as at Island House where the Tenants’ Association wants to convert the building to cooperative ownership, with creativity and a commitment to protect the current residents’ interests.

In the negotiation over Eastwood, the interest of the owner was to maximize his return on his investment and make improvements to his building. RIOC’s interest included the protection of the affordability of the apartments for the tenants who call Eastwood home.

The result was one that is win-win for the owner, the tenants and RIOC. The 85 percent of tenants who qualified received "sticky vouchers" from the rent subsidy program operated by the federal Department of Housing and Urban Development. That meant that the owner, freed of the restrictions that came along with the Mitchell-Lama program, could receive rents closer to market value. Most current tenants, meanwhile, faced no additional out of pocket expense for their apartments.

In addition, while some tenants will have to relocate within the building depending on family size, their rights of tenancy are protected under the deal.

Equally important, Eastwood’s owner will make a series of long-needed improvements to the building, both in its common areas and in many of its apartments. These include lobbies, elevators, windows, bathrooms and kitchens.

While we had hoped to have closed the deal by now, we have had to take into account changes in the Public Authorities Law that governs RIOC, which is a State-created public-benefit corporation that falls under that law’s rubric. We hope residents will begin to see the improvements taking shape by this fall.

Eastwood was the first building on Roosevelt Island to withdraw from the Mitchell-Lama program and, as such, we have worked hard to find pioneering financial and legal strategies to protect the existing tenants. We are applying those lessons as Island House tenants continue their discussions with that building’s owner over the proposed cooperative conversion. Those lessons will similarly guide us if, as expected, owners of Rivercross and Westview seek to leave the Mitchell-Lama program as well.

RIOC will continue to be guided by longstanding commitments by Governor Pataki and Department of Housing and Community Renewal Commissioner Judith Calogero, who serves as chair of RIOC’s Board of Directors, to protect affordable housing for Island residents, and in the case of Island House, encouraging home ownership opportunities on the Island.