"Nonprofits Are Strained by Impasse" NY Times 7/14/7
Here's an excerpt of the pertinent information. Click the title above to read the article at The Times website:
"A political impasse in Albany has cut off a critical source of low-cost financing for nonprofit organizations in New York City, ranging from operators of small homes for the developmentally disabled to the builder of large parking garages for the new Yankee Stadium in the Bronx.
"Since July 1, the city’s Industrial Development Agency, like its counterparts around the state, has had no authority to sell tax-exempt bonds on behalf of nonprofit organizations. That lapse is crimping the expansion plans of schools, hospitals and social-services providers, causing them to postpone projects or borrow at significantly higher interest rates, their officials said.
"The same lapse could also hold up plans for the Yankee Stadium project because the organization that was selected to build the parking garages is nonprofit, a status that allows it to borrow through the agency at interest rates as low as 5 percent. That entity, the Bronx Community Initiatives Development Company, wanted to sell $190 million worth of bonds this month to cover much of the project’s estimated cost of $281 million, according to an application it filed with the agency.
"But none of the pending projects are as politically sensitive as the stadium garages. City officials have been working for several months on a plan to build three garages around the site of the new stadium, which is under construction in the South Bronx.
"The city solicited bids for construction of the garages, which it said could charge no more than $25 a car in their first year of operation. But all of the bidders said the project would not be viable unless the city tossed in a large subsidy on top of the $70 million the state had already pledged.
"Instead, city officials decided to seek a federal subsidy in the form of tax-exempt financing through the industrial development agency. All they needed was a nonprofit organization to manage the project and a public benefit to justify the tax break.
"The organization they found was the Community Initiatives Development Corporation, a 15-year-old entity that says its mission is to “lessen the burdens of government associated with economic development projects and low-income housing development.” In turn, it created the Bronx Community Initiatives Development Company, whose sole purpose is to serve as the tax-exempt borrower for the parking garages.
"City officials said they hoped the borrowing freeze would be lifted in time for the garage developer to seek final approval at the industrial development agency’s board meeting on July 23.
"They also said they still must come up with a way in which the South Bronx community will benefit from this project. They said they were considering giving some of the surplus cash generated by the garages — if any —to Bronx Park."