Vol. 13 No. 13
48 pages
"&tu:rday, Ma:rch 8, 1980
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E I Repon by Charles K. Parness This week the last major obstacles to reaching an accord with the State of New York were resolved. The negotiating team reported to the Board on the latest improvements in the package. We succeeded in getting the package. We succeeded in getting an the key points that we believed were possible to obtain. The Board approved the resolution which will place the settlement package before the residents in a community referendum to be held on March 26, 1980. The resolution states that we believe the settlement package is the best settlement package that can be obtained. It further states that the referendum will be held before the Board of Directors will take any final action. The settlement calls for a 20 percent increase beginning on April 1, 1980 and lasting for 27 months to July 31, 1982. Within this settlement, while the State's payment of construction defects goes back to November 1, 1979 and even before, the rent increase is oot retroaetíve.In August 1982 there 'will be an increase of 16 percent and· in August 1984 an increase of 16 percent. The hardest concept for most residents to grasp is the concept of stable rents for over a six year period. Nowhere, at no time, has any community won such a long term settlement with a _ guaranteed limit on rent increases. With rapidly rising inflation, with fuel cost increases escalating, these 16 percent increases will . be less than what anyone would pay under rent control or rent stabilization during those periods. We have spent the last five months telling the Housing Finance Agency (HFA) how onerous everything that they propose is. We have come a very long way. Their original proposal, as you will recall, would have imposed a 69 percent increase on us for the first two years when you add fuel passalongs, City taxes, and our share of
Co-op Council Meeting Monday There wiH be a General Meeting of the Co-Gp City Council on Monday, March 10, at 8 p.m, in Bartow Room
31. Riverhay President Cha.ries Parness will be the guest speaker. He wiH discuss the proposed settlement pack-
age. AH Council members are urged to attend.
construction defect money to the 45 percent rent increase that they originally asked for. A very few weeks ago, they came back with a rock bottom figure of 25 percent for two years with the same add-ons and that meant in effect 33 percent for two years. Last week we obtained some real movement · when they dropped their figure to 22 percent for 24 months from November, 1979. They told us they could not agree to an increase longer than 24 months. We negotiated for better terms and reduced the first increase to 20 percent and increased the length of the term to 24 months from April '1, 1980. Best deal Now, we have obtained the best possible deal. We moved their two (Cônliriœèl' ôn pgê 5)
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A. Ca:rry Cha:rge Iaereases Limited to the Following: 20 percent effective April 1, 1980 for 27 months; 16 percent effective July 1, 1982 for 24 months; and 16 percent effective July l, 1984 for 24 months. B. Construction Defect Funding. Full funding for necessary construction, design, and site selection related repairs subject to objective determination as to whether repair is attributable to construction, design, or site selection problems and the extent of such liability by impartial arbitrators in accordance with mechanism to be agreed upon between State and Riverbay. C. Equity Contributions. No equity overeall. State agrees to work jointly with Ríverbay to develop new legislation to allow cooperators to make optional equity contributions which would entitle them fo share in enhanced future value of apartments at the time they are sold. Equity charges to be increased to $1,000 per room for new cooperators only and new cooperators will also pay 10 percent surcharge on rental the first time an apartment is sold. D. Taxes. Ríverbay to pay current City taxes and arrearages owed to the City to be financed within rent limitations set forth above, or else subsidized. , E. Workout. State to appropriate sufficient funding to make up additional deficit generated during workout program. (Estimate $35 million.) Workout funding to be repaid by Ríverbay to the State over ten years, beginning at the end of workout, July I, 1986 to July 1, 1996. Previous arrearages accumulated prior to commencement of workout to be repaid at the end of existing mortgage, i.e., beginning 2006AD. F. Ecooomic Rent. Ríverbay agrees to begin to pay sufficient rent to meet actual operating costs at the end of the workout. G. Nullification. The construction defect funding is dependent upon enactment of legislation to enable HF A to carry out all of the terms of the agreement. The agreement is also subject to court approval if so requested by the Trustee. Accordingly, if appropriate legislation is not adopted, or if a court should nullify the agreement, Ríverbay is released from its obligations and the agreement becomes null and void. HF A has agreed, however, to act as interim financier of the construction defect program until the legislature adjourns. H. No Cuts in Services. l. A Proposal fo:r Subsidies fo:r those least able to afford :rent in-
creases.
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