BILL NUMBER: S7530

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the local finance law, in relation to providing a period
of probable usefulness for a leasehold interest in the major portion of
the parking garage building located at 237 Martine Avenue in the city of
White Plains

 
PURPOSE:

The purpose of this bill is to authorize the City of White Plains to buy
out the leasehold interests in the City Center Garage (the "Garage") to
obtain fee title to the property and to set a period of probable useful-
ness for said purpose for purposes of the Local Finance Law.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 authorizes the City of White Plains to expend City funds or
bond proceeds to buy out the leasehold interest of the Garage.

              

Section 2 sets the period of probable usefulness of such object or pose
at 20 years related to the Local Finance Law.

Section 3 sets the effective date.

 
JUSTIFICATION:

The Garage was a public/private partnership among the City of White
Plains (the "City"), acting through its not-for-profit affiliate, White
Plains Center Local Development Corporation (the "LDC"), and LC White
Plains LLC ("LCWP"). The City deeded the Garage site to the White Plains
Urban Renewal Agency ("URA") with the property to revert to the City 25
years after the issuance of the final certificate of occupancy for the
Garage. At the same time the URA leased the property to the City and
LCWP to build a 7 story garage on the property which lease was to expire
upon the LC Final Financing Payment Date as defined in the Parking Oper-
ation and Maintenance Agreement ("POMA") among the City, LCWP, the LDC
and the White Plains Parking Authority ("WPPA"). The City assumed all
the obligations of the WPPA, including those set forth in the POMA, upon
its dissolution pursuant to Chapter 136 of the Laws of 2004 of the State
of New York.

LCWP financed its portion of the garage through revenue bonds issued by
the Westchester County Industrial Development Agency ("IDA"). The bonds
were to be paid by a bank, as bond trustee, and the payments were guar-
anteed by an insurance policy. The POMA, through other documents,
provides that all revenues from the garage in excess of the allowable
expenses (both normal and non-recurring) budgeted by the City and LCWP
are used to pay debt service on the IDA revenue bonds. Such payments
have been made since the opening of the Garage in 2003. The City must
keep the books for the Garage separate from the books for the remainder
of the City's parking system to account for the amount to be used to pay
off the revenue bonds.

The revenue generated under the POMA was sufficient to make all princi-
pal and interest payments until recently. The revenue generated by the
Garage substantially declined during the pandemic. The revenues were
sufficient to pay both principal and interest for the bonds starting in
October 2004 until the October 2022 payment when the full payment could
not be made. The bond trustee paid the principal deficiency through the
insurance policy. Because of the decline in parking revenues, future
principal payments will likely be difficult to make in full. The LC
Final Financing Payment may well be substantially delayed as interest
accrues on the deficiencies and legal expenses are added. In addition,
the bond insurer, because of the default, has stepped into the budgeting
process to determine the allowable expenses and is resisting expenses
needed to maintain and operate the facility effectively in order to
reduce expenses and have the deficiency paid off faster.

In order for the City to integrate the Garage into its parking system as
well as to properly maintain and operate the Garage, the City must make
the LC Final Financing Payment to obtain unencumbered fee title to the
Garage some years earlier than is currently possible. The City will then
be entitled to all revenues received from the Garage and will be able to
operate the Garage as it does the rest of its system as well as properly
maintain it. Through the use of favorable tax-exempt bonds the City
expects to obtain a favorable return on this earlier acquisition of the
fee to the Garage.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.