the pc police
12-24-2005, 11:31 AM
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Hempstead project in trouble
Black organization owes nearly $3M on redevelopment, but some allege Nassau wanted it to fail
BY SID CASSESE
STAFF WRITER
December 23, 2005
A $10-million Hempstead Village redevelopment project taken over by a bi-county black organization in 2001 is in financial jeopardy, according to Nassau County officials who want the project under new management.
The project on Main Street houses about 30 businesses in a block-long development being managed by 100 Black Men of Nassau-Suffolk Inc. The project is nearly $3 million in debt, with another million due by the end of February, said Patrick Duggan, Nassau deputy county executive for economic development. The county is ultimately responsible for the federal loan.
"This administration has done everything it can to help this group be successful, including holding off on taxes due and loaning it another $1.1 million," Duggan said. "But some of its debts have been sold and now Nassau is at risk of losing significant dollars."
The bills keep mounting and the county is worried the whole deal will collapse.
"It was supposed to be the crown jewel of black economic development on Long Island," said John Kearse, chief executive of the Nassau County Economic Opportunity Commission. "Now, after once again setting it up for failure, county officials can point to it and say its success is beyond the capabilities of black folk."
Not a matter of race
But Wayne Hall, the mayor of the predominantly black village who is also black, said the battle has nothing to do with race.
"Look, even with a new infusion of money and not paying any taxes for four years, it hasn't been successful," Hall said. "That tells the whole story." The mayor said he would like a viable black firm to get a shot at running the project.
The almost 100,000-square-foot site at 100 Main St. is a former county bus terminal that has twice been a development project lost by the EOC, the county's primary anti-poverty agency, due to unpaid taxes.
Lance Clarke, the Hempstead lawyer for 100 Black Men, said the county is preparing to wrestle control back from the not-for-profit over about $2 million in back taxes. Clarke said the rent rolls - about $1.2 million a year - are not sufficient to cover the $1.13 million in mortgage bills and operating costs and another $510,000 in annual taxes.
"Simply put, the rent rolls will not support the current tax structure. We need some kind of tax relief," Clarke said. "We're trying to set up a meeting with HUD to discuss restructuring the loan. But we need the county's support for this, and we deserve it, too."
But Adam Glantz, a spokesman for the U.S. Department of Housing and Urban Development's regional office in Manhattan, said his agency has only dealt with the county. "The contract is between us and the county," Glantz said. "It is the county that sought the funding because it believed this particular project would be a catalyst for economic development in the county."
The county receives about $20 million a year from HUD for community development. About $1.7 million of that goes to the Village of Hempstead.
The village guaranteed the Main Street project's loan but, because its annual share could not cover the $10 million loaned, the county pledged to back it up with its Community Development Block Grant program funds.
Bills piling up
In order to stave off default, Nassau officials said they made an $887,778 mortgage payment in August for the Main Street project using block grant reserve funds to stave off default.
On top of the $2 million in back school, village and county bills, the group owes $150,000 for fees and construction work on its second floor, $285,000 in mortgage interest payments due in February and another $153,000 in school taxes due in April.
One new idea floated for the site, according to some, is apartments. "I've heard that one group would put 200 units over the stores," Village Trustee Perry Pettus said, "and I oppose that. It's too many." He said he would back 100 apartments.
"I'm willing to look at anything that will get this project out of its financial morass," Hall said.
Duggan said the county will support any effort to make the property viable. "But this current real estate deal was highly speculative to begin with and is continuing to hemorrhage money to the tune of about $4,000 a day."
Over time, Duggan said, "That leaves a big deficit."
Hempstead project in trouble
Black organization owes nearly $3M on redevelopment, but some allege Nassau wanted it to fail
BY SID CASSESE
STAFF WRITER
December 23, 2005
A $10-million Hempstead Village redevelopment project taken over by a bi-county black organization in 2001 is in financial jeopardy, according to Nassau County officials who want the project under new management.
The project on Main Street houses about 30 businesses in a block-long development being managed by 100 Black Men of Nassau-Suffolk Inc. The project is nearly $3 million in debt, with another million due by the end of February, said Patrick Duggan, Nassau deputy county executive for economic development. The county is ultimately responsible for the federal loan.
"This administration has done everything it can to help this group be successful, including holding off on taxes due and loaning it another $1.1 million," Duggan said. "But some of its debts have been sold and now Nassau is at risk of losing significant dollars."
The bills keep mounting and the county is worried the whole deal will collapse.
"It was supposed to be the crown jewel of black economic development on Long Island," said John Kearse, chief executive of the Nassau County Economic Opportunity Commission. "Now, after once again setting it up for failure, county officials can point to it and say its success is beyond the capabilities of black folk."
Not a matter of race
But Wayne Hall, the mayor of the predominantly black village who is also black, said the battle has nothing to do with race.
"Look, even with a new infusion of money and not paying any taxes for four years, it hasn't been successful," Hall said. "That tells the whole story." The mayor said he would like a viable black firm to get a shot at running the project.
The almost 100,000-square-foot site at 100 Main St. is a former county bus terminal that has twice been a development project lost by the EOC, the county's primary anti-poverty agency, due to unpaid taxes.
Lance Clarke, the Hempstead lawyer for 100 Black Men, said the county is preparing to wrestle control back from the not-for-profit over about $2 million in back taxes. Clarke said the rent rolls - about $1.2 million a year - are not sufficient to cover the $1.13 million in mortgage bills and operating costs and another $510,000 in annual taxes.
"Simply put, the rent rolls will not support the current tax structure. We need some kind of tax relief," Clarke said. "We're trying to set up a meeting with HUD to discuss restructuring the loan. But we need the county's support for this, and we deserve it, too."
But Adam Glantz, a spokesman for the U.S. Department of Housing and Urban Development's regional office in Manhattan, said his agency has only dealt with the county. "The contract is between us and the county," Glantz said. "It is the county that sought the funding because it believed this particular project would be a catalyst for economic development in the county."
The county receives about $20 million a year from HUD for community development. About $1.7 million of that goes to the Village of Hempstead.
The village guaranteed the Main Street project's loan but, because its annual share could not cover the $10 million loaned, the county pledged to back it up with its Community Development Block Grant program funds.
Bills piling up
In order to stave off default, Nassau officials said they made an $887,778 mortgage payment in August for the Main Street project using block grant reserve funds to stave off default.
On top of the $2 million in back school, village and county bills, the group owes $150,000 for fees and construction work on its second floor, $285,000 in mortgage interest payments due in February and another $153,000 in school taxes due in April.
One new idea floated for the site, according to some, is apartments. "I've heard that one group would put 200 units over the stores," Village Trustee Perry Pettus said, "and I oppose that. It's too many." He said he would back 100 apartments.
"I'm willing to look at anything that will get this project out of its financial morass," Hall said.
Duggan said the county will support any effort to make the property viable. "But this current real estate deal was highly speculative to begin with and is continuing to hemorrhage money to the tune of about $4,000 a day."
Over time, Duggan said, "That leaves a big deficit."