Has New York State Become Toxic for Roosevelt Island?

by Dick Lutz

Roosevelt Island has always had a “special situation” vis-a-vis New York State, which took over responsibility for turning much of these 147 acres of New York City property into workable housing. It was no small challenge, but State and residents working together did a stellar job for many years.

But the “special situation” has now become toxic to the Roosevelt Island Idea. And it’s New York State that has turned against its creation here – a diverse neighborhood ideally situated, being an Island, to create a strong sense of community among its residents.

What’s gone wrong?

In a nutshell, we have a missing layer of representative democratic government, and thus, no way for the political system to rebalance itself through the ballot box. It has always been this way but, of late, New York State – and the Cuomo administration – have blindly blundered into destructive actions that are harmful to this community.

New York State – specifically, the executive branch – calls the shots here. The paid appointees who run the Roosevelt Island community are visitors – non-resident patronage appointees who don’t live here but make the key decisions about how the Island is run, often rather oblivious to the resident point of view. They seem only rarely to ask (or intelligently answer) the question, "How would I want this done if I lived here?"

We do help elect a City Council member, of course. And we get to vote for the Mayor and State legislators. But none of these has any real administrative say here. The result: We get to vote for those who have no power here, and don’t get to vote for those who hold all the power.

Attempted Fix

Nearly 20 years ago, this state of affairs led concerned Islanders to seek the power of the ballot box over the RIOC Board of Directors – those who, by law, are intended to guide the key decisions.

And it leads us to want that elected board to have the real operational power to seek and choose a chief community administrator (the president of RIOC) instead of rubber-stamping the governor’s patronage choice. Why? Because Roosevelt Island’s “community manager” should be beholden to the RIOC Board and Island voters for the job – not be the willing captive of a patronage-based career track.

The same should be true for other RIOC administrative functionaries. Over the years, we have had many duds in the key positions. To consider only the RIOC Presidents: Dr. Jerry Blue was allegedly the point man for Senator Al D’Amato at the federal agency HUD before being appointed by Governor George Pataki, doing D’Amato’s bidding, to administer the Island. Blue quickly showed himself to be massively inept at running a community, but lasted three years, then was air-lifted out of here overnight when he proved too embarrassing to the Pataki administration. Blue’s replacement was Rob Ryan, who had run Pataki’s first campaign for governor. He had an evident alcohol problem, and melted down one night in a public meeting. His replacement was Herb Berman, a disillusioned Democrat who became Pataki’s liaison with the Jewish business community and was rewarded with the job here. Another was Leslie Torres, who was pulled out after some credit-card irregularities and her repeated requests to be given something else to do.

An Upside-Down Power Structure

Ideally, the RIOC Board (appointed by the governor) should be in overall control. (Don’t most Boards of Directors have hiring/firing power over the president who serves under them?) Instead, the Board here is functionally controlled by the RIOC president. That’s because the seven public members of the nine-member RIOC Board serve a specific-length term, then continue serving until replaced. At present, all terms have expired. That means that each member of the RIOC Board is subject to an immediate thanks-and-goodbye dismissal should s/he displease the governor or the governor’s appointee as RIOC president. The effect of this is that the RIOC president can say, “The Second Floor [the governor’s office] says so,” and RIOC Board members, shackled to their “fiduciary responsibility” as officers of the State, lack the wherewithal to act otherwise in consideration of the community’s best interests. Serving expired terms, they constantly must weigh this question: "Should I displease the RIOC president (and/or the governor) in this decision, or should I 'live to fight another day?'"

Appointments to RIOC Board seats are subject to the worst of political decision-making. If you doubt that, consider the sole appointment to the RIOC Board made by Governor Andrew Cuomo.

The Ferrera Episode

At the apparent behest of Republican Senator Marty Golden of Brooklyn, who has not a single constituent on Roosevelt Island, Cuomo appointed Salvatore Ferrera, who, at the time, was director of The Child School, a major tenant in properties that RIOC controls. That’s an obvious conflict – sitting on a board that controls Island turf – but it extended beyond that, because, by law, the State pays for every child enrolled at the school. So, Ferrera was serving a gubernatorial appointment while operating a school run with State money. Ferrera had put the school on an aggressive growth track, and he wanted square footage that would justify the expansion of the school. He even sought Island property near The Octagon for a riding stable, citing the value of a child-horse relationship in dealing with the problems of some children (so it may have been about more than just the square footage). But Ferrera’s expansion plans fell apart when the State Department of Education vetoed many reimbursements, citing irregularities. Ferrera terminated 40-some employees and many students as a result, then resigned from his Child School post and the RIOC Board.

Cuomo has not appointed a replacement to Ferrera’s RIOC Board seat – and it’s worth mentioning that Cuomo had removed Jonathan Kalkin to seat Ferrera. Kalkin, considered highly effective by his fellow Board members, had been nominated by the community in Island-wide elections, and appointed by Governor David Paterson. But he was serving a just-expired term, and Cuomo could toss him out to please the State Senator from Brooklyn.

It belabors the obvious to say that the presidency of RIOC and the seats on the RIOC Board are clearly subject to the whims of a political system more concerned with the flow of political dollars or favors than with any possible resident-oriented operation of the corporation that makes the day-to-day decisions on how Roosevelt Island is run. It may not be as bad as the days when governors appointed real-estate developers, but that’s probably because just about every RIOC-controlled square inch of the Island has already been committed for development. Raw politics remain more important to the choices made for Roosevelt Island than the considerations that contribute to having a great community.

It will remain that way as long as voters here have no ballot-box power over RIOC – and as long as the sitting governor can find the required five Islanders willing to serve on a board that must operate in the constrained environment that makes politics more important than people. Implied is "Accept the person I send you to run RIOC, or I’ll replace you with somebody who will."

That’s Roosevelt Island’s long-term problem #1: No real resident power over RIOC.

Ham-Handed Legislating

In recent years, there has been a problem #2 that is a perfect illustration of how the State’s heavy hand compounds problem #1 – an inability to act quickly or appropriately on important matters because of State over-control.

There are many examples of this State mis-control over the years. In 2005, in the wake of Pataki’s attempts to sign away Erie Canal property to a developer chum, and attempts to lease out New York City’s West Side Hudson Yards at half their value, the Legislature passed the Public Authorities Accountability Act (PAAA). Accountability sounds like a good idea, and it was, but the PAAA, by requiring all State agencies to get top dollar for any property they’d sell or lease, tied RIOC’s hands in filling Main Street’s retail stores. Then-RIOC President Steve Shane felt he could not rent out storefronts in compliance with the best interests of the community, but instead had to comply with a perfectly good law that was perfectly awful for bringing mom-and-pop businesses to Roosevelt Island. What eager small-shop operator is going to fill out a huge stack of forms, submit a bid, and wait several months for a likely “no,” when he can instead go to Queens, shake hands with a landlord, and open his store within a few weeks?

Trying to fix a problem elsewhere, the Legislature passed a law that imposed an excessive control that is totally inappropriate for a small community like Roosevelt Island. For that matter, the public benefit corporation structure is just wrong for Roosevelt Island. It’s closely parallel to an “authority,” a terrific off-budget approach to building a bridge. But we’re a community, not a bridge. It’s the wrong set of rules for us.

To make matters worse, the Legislature over-corrected in 2009 with another law applying to State authorities and public benefit corporations. That expanded the Authorities Budget Office (ABO).

The RIOC Board decided to work around the handcuffs of the PAAA by turning Island storefronts over to a developer. Bids were taken, but there was, functionally, only one bid – from Hudson/Related (H/R), which already controlled the retail storefronts in Southtown. This put H/R in the driver’s seat, and RIOC ended up signing over the Gallery RIVAA space and the second-floor space above the new library (504 Main Street) – sacrificing what could have been valuable community space that must now, instead, produce income for a developer and for RIOC. Higher needs were set aside in favor of the community’s need for a workable retail environment, the working theory being that, within months, H/R could fill the retail spaces. H/R got 30-year control, effectively removing RIOC and Island voters from any future say in the matter.

Some would argue, successfully perhaps, that H/R’s ambitions for the retail space have run off the track that once was thought the right way to go for Roosevelt Island. We have no hardware store, and we have a chain eatery, Subway, and a Trellis diner closed some eight months for an imposed redesign that turns out to have been ineptly managed by H/R, the owner of Island House, RIOC, the City, and (perhaps) the unfortunate owner. Admittedly, there have been some gains – notably Wholesome Factory, Island Wine, and the Sweet Shop – each a no-brainer that would have been in place had not State over-control kept potential entrepreneurs from coming long before H/R took over.

Have all these decisions been made for the benefit of the community? The party line is that market forces make good decisions, and whether that’s truth or fiction here, the impetus for all that’s happened was a well-intentioned State law that imposed controls severely inappropriate for a small community.

The ABO

But the most recent example of State over-control has been a ruling from the ABO that has tied up the distribution of the Island’s Public Purpose Funds – under which $100,000 a year has been allocated, effectively by the Residents Association, to Island non-profits in need of support. Running scared and running stupid (to borrow a phrase from a longtime Islander), and with its Board driven by “fiduciary responsibility” over community responsibility, RIOC tied its own hands, suddenly depriving needed funds to non-profit entities of funds and looking to charge rent for the space they’d used for years, challenging their ability to provide scholarships and services.

The result has been a chaotic impact on Island non-profits – a game-changing new set of rules that represent a departure from the Island’s past practices of nurturing non-profits rather than milking them for meager nickels and dimes to pay for rental of Island facilities. When your budget is close to zero, coming up with those coins can be far more painful than any compensating comfort they might give to RIOC.

State over-control was also evident in the 2½-year response to Hurricane Sandy. Almost anywhere else, the Cultural Center facilities in the basement of Roosevelt Landings would have been fixed within weeks. But New York State imposes procedures that, with RIOC blundering, did a miserably bad job and took 30 months to do it. The result is a badly chopped-up set of rooms, a new rental structure that will require administration by some RIOC functionary, with costs and procedures only peripherally appropriate to a small community.

Because of its inability to defy this over-control by the State, RIOC has been forced into a position that is likely to inhibit, rather than enhance, community activities that need access to community space. Doubt that? We’ll see.

The ABO ruling, and RIOC’s fumbling compliance, becomes the current first-choice example of State over-control totally inappropriate for a small community. There is some indication that the ABO may allow an exception for the Island’s Public Purpose Funds, but late, after damage done and time wasted by many people as they sought workarounds and worried over how they’d replace the missing funds.

The Question

This raises the question: "Has New York State’s involvement in Roosevelt Island become toxic?"

To be fair, we must give history its due. Roosevelt Island as a residential community might not have come to exist without the actions of a more benign State government in the different times of a half-century ago. Kickstarting a community here would not have happened without creative thinking in State government, but those were times when government valued creative thinking over conflict and all-out political war.

Repairing this community’s relationship with New York State is likely to depend on that kind of creative thinking, and a dedication to the concept of democratic government at all levels – to depend on our politicians to find some way to address this peculiar problem – and sooner rather than later, before the essence of the Roosevelt Island Idea is permanently lost.

Tags: RIOC Representation & Governance Dick Lutz

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