White Plains CitizeNetReporter - Former Mayor Explores the Urban Renewal IDA

WPCNR MR. & MRS. & MS. WHITE PLAINS VOICE. August 18, 2006: Mayor Alfred Del Vecchio who lead White Plains between 1976 and 1993 comments on the recent legislation turning the Urban Renewal Agency into a bonding agency for the city:

John,

Let's see how this "Ginsburg" Urban Renewal/IDA charade works, in simple terms:

The city taxpayers will issue up to $11 million in bonds from which developer Ginsburg will draw funds to pay the city $969,000 in fees and build his building. Ginsburg gets zoning, sales and property tax incentives, and will be responsible for paying the debt service on the city bonds from the income from his building. Ginsburg spends the $11 million in about 18 months and the bonds will be paid off in about 15 years.

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Hopefully, proceeds from the building will be sufficient to meet the bond payments which the city taxpayers guarantees. If not, payments from Mr. Ginsburg will have to be renegotiated, adjusted, and/or rescheduled with the taxpayer taking up any financial slack. If the building is profitable, Ginsburg pockets the profits and the city cancels its debt in 15 years; except for hidden and fixed costs of commissioners and consultants hired to configure and maintain data on this complex and unusual transaction for a municipality.

Win, lose, or draw the city is in a lose situation.The $969,000 comes from the taxpayer's issued bonds. If the project is successful, the city will get its money back in 15 years, But interest on the principal will more than double the original investment.

If someone will loan me one million dollars, I will be very happy to pay them back the original amount in 15 years. Will the supporters of the city IDA please step forward.

Alfred Del Vecchio


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