The RIOC Column

As the summer winds down, we hope to have good news in the very near future on resumption of Tram service. You probably saw the Tram operating this week as final testing got under way on the Tram’s emergency response and rescue systems.

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

The operating systems already have been repaired, upgraded and reinstalled. If this last round of tests is successful, Tram service will begin as soon as regulators give the official OK.

At the same time, we have begun studying the question of bringing ferry service to the Island for the first time in 30 years. The Tram service disruption, combined with the weekend work that has sidelined the F train, underscores the need for more transportation options.

I also want to take this opportunity to report about another concern – the state of retail space on Main Street.

We share the concern of many residents that too many of the stores remain vacant. Part of the problem is that some stores have simply fallen too far behind on their rent.

There have been new stores opening on the Island. Already, the Starbucks near the train station has opened and appears to be quite popular with commuters. As a result of earlier marketing efforts, we have received over 20 expressions of interest from a wide range of retailers that would result in most of our retail space being leased.

However, while fiscal mandates remain, the legal environment has changed with this year’s advent of the Public Authorities Law that affects public-benefit corporations such as RIOC.

RIOC’s real estate advisor and RIOC lawyers are currently studying the new law, which sets out requirements for disposition of real property. We are seeking clarification, for example, on whether bidding is required for renewals of leases as well as for new leases.

The first step is to complete an appraisal of the value of the retail space. We expect we will be able to consider all bids that meet or exceed that appraised value, but we cannot say that definitively until a review of the new law is completed.

We also face competing pressures from residents over what kind of retail should be on the Island. Some want higher-end retail establishments while others value the mom-and-pop stores we have seen in the past.

A larger issue is whether the Island would be better served by turning over ownership and management of all of the retail properties to a management firm with greater expertise in the area than we currently have in-house. The RIOC board is considering whether to contract out management of the retail space to a retail specialist, weighing, among other factors, the firm’s expertise in retail and management and its ability to invest capital in improving the retail environment of Main Street.

We also have to study what such a move would mean for the critical rental income that would be coming to RIOC to underwrite the athletic, environmental and other amenities we must now support within our means.

It is our preliminary belief that putting the retail space in private hands would give that firm greater flexibility in attracting the types of retail establishments than would be available to RIOC directly under the Public Authorities Law, but that, too, is subject to a final determination by the legal review.