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March 28, 2013 By Steven E. Greer
The local advertising flier, The Broadsheet, posted a misleading article by Matt Fenton about the amended contract between the BPCA and Asphalt Green. It gave the reader the impression that the BPCA was providing a very favorable contract to Asphalt Green. The article stated, “One member of the BPCA’s board, Fernando Mateo, questioned whether these payments are reasonable. “I operate a franchise that does business with the City,” he explained, “and I wish the City were as kind to me as we’re being to Asphalt Green. We’re a great landlord, but we’re feeding Asphalt Green,” with this arrangement. Mr. Mehiel and BPCA board member Donald Capoccia were quick to argue that these payments are a bargain, “compared to the terms of the original contract,” Mr. Mehiel said…. Asphalt Green still gets the 52,000-square-foot space rent free for five years and the Authority still pays 60 percent of its estimated utility bills (plus more than $200,000 in annual capital improvements for three years), the new agreement avoided a situation where, as Mr. Mehiel observed last year,..”
There is a legitimate reason that Asphalt Green does not pay rent. They are being contracted to manage the facility, which obviates the BPCA from hiring costly government workers to do the job at considerably more cost. To ask Asphalt Green to pay rent would be like asking an employee at a bank to lease their desk.
To put the contract in perspective, the nearby Manhattan Youth community center on Warren Street not only does not pay rent, but had the entire facility worth tens of millions of dollars given to them. On top of that, Bob Townley, the operator, has been awarded tens of millions of dollars from the LMDC and other agencies over decades.
Most recently, the Community Board 1, chaired by Catherine McVay Hughes, had the chutzpah to pass a resolution asking the BPCA to give the Manhattan Youth facility, not located in Battery Park City, grants to help pay for the repairs needed after hurricane Sandy. From the minutes of the November 27th CB1 meeting, “BOARD VOTE: 34 In Favor, 0 Opposed to: Resolution calling upon funding agencies to help Manhattan Youth, and expediently; in particular: the Battery Park City Authority, FEMA, Department of Youth & Community Development, and State and local agencies. Friendly amendment: LMDC funds have not been distributed yet and should be Adopted“.
Thousands of other small business were wiped out by the hurricane and never received such favorable treatment from the CB1. It is unknown whether the BPCA gave any grants to Manhattan Youth.
An additional reason that community centers such as Asphalt Green often do not pay rent, and are subsidized by the community, is that they are not large profit centers. Any profit earned from the memberships at Asphalt Green will be shared with the BPCA, as will be the losses.
Addressing BPCA board member Mateo’s question as to why the BPCA was providing Asphalt Green a $392,000 upfront payment, that is because the BPCA was unable to turn over the facility to Asphalt Green in 2011 and 2012, while Asphalt Green was incurring losses each month. Recall, this delay in opening the facility to Asphalt Green was caused by the former BPCA’s administration (led by Gayle Horwitz and Bob Thompson, both now departed) exerting financial pressure on Asphalt Green to renegotiate the contract. Since those costly delays were intentionally caused by the BPCA, the $392,000 settlement is a “bargain”, according BPCA Chairman Dennis Mehiel, given the possible litigation that was averted.