CC Times 01/12/2013

HOW FAR WILL CITY NEWS GO TO MALIGN CO-OP CITY?

   How far can the multimillionaire City News publisher and his editor go in maligning our community? Pretty far! Editor Michael Horowitz travels from a fancy Riverdale condominium to Co-op City, where, in his latest vent, he dismisses Board members as puppets with a “ghetto mentality.”

  Recently he claimed, citing no evidence, that Riverbay Corporation and the chair of a Board committee had discriminated against Latinos and Asians in apartment sales advertisements. He has also misrepresented the Board members’ support for HUD-backed refinancing as a pursuit of government handouts.

  The “ghetto mentality” distortion was apparent in a City News editorial (1/3/13) claiming that the Board had chosen to “maintain Co-op City as a subsidized community.”

  Subsidized? We can only dream that affordable housing would receive the kind of benefits that many large corporations and financial institutions obtain through tax breaks (some pay no tax at all, while amassing billions of dollars in profits). What we have is a loan guaranteed by the U.S. Department of Housing and Urban Development, New York State, and New York City. We do not get a dime from the government. The flow of money actually goes the other way. Each year Riverbay pays, among other taxes, $11 million in shelter rent tax and $18 million in water and sewer taxes. Our cooperators pay hundreds of millions in income taxes and payroll taxes.

  Horowitz apparently preferred to have the community trapped in an expensive loan from New York Community Bank rather than saving hundreds of millions in interest payments over the life of the HUD-Wells Fargo package. Whose interests are Horowitz and his featured “civic minded cooperators” promoting?

   Horowitz’s description of Board members as “puppets” is almost comical, considering the vast, obvious differences between Freedman and Board directors, both individually and as a group.

  One of Horowitz’s featured letter writers levels completely undocumented accusations at the entire Board and management. The tactic seems to be a City News style. Debate of community issues is highly desirable, but an undocumented charge can’t be debated. It’s just rhetoric and venting.

                                   PAYING BUT NOT GETTING?

  Riverbay was charged $438,000 for 8 inches of topsoil in restoring the North Greenway. When Director  Francine Reva Jones, management representatives, and I surveyed the section, just north of the new baseball field, several weeks ago, we saw no topsoil, only recycled debris—a potential hazard in a play area for young people.  

  We have questioned management about this.

                   OUR POWER PLANT – PAST, PRESENT, FUTURE

  The original United Housing Foundation sponsors of Co-op City commissioned architects to design a cogeneration plant, to produce electricity as well as to provide heat, hot water, and air conditioning. They expected that the low-interest, tax-free bonds made available by Mitchell-Lama’s Housing Finance Agency would keep construction costs, and therefore carrying charges, down. As Co-op City rose from the marshland, however, so did inflation, spurred largely by the Vietnam War. The original selling price of the bonds (4.5 percent) kept rising, pushing construction cost up. Ironically, sponsors struggling to cut costs made some costly decisions.

  For example, they authorized the installation of two-ply instead of four-ply roof insulation. Eventually, all the inadequate roofing had to be replaced.

  In another costly decision, we “saved” more than $20 million by accepting Con Edison’s offer to purchase electricity at a low, bulk rate instead of installing electric generators in the power plant, which was already fitted for generators, that were ready for shipment to Co-op City.

  To receive current from Con Ed, Riverbay built the biggest non-utility-company electric substation, next to the power plant, and Con Ed fed 50,000 volts of bulk power to it. This voltage was stepped down to 4,160 volts by oil-filled transformers at the power plant and distributed to every building with untested neoprene-type covered cables in underground duct banks.

  In each building, another set of transformers stepped the voltage down further, to 480 volts, sending power to other transformers on different floors. Finally, the current was stepped down to 120 volts at apartment panel boards.

  After a few years, those “less costly” underground cables began to fail. Many, and eventually all, had to be replaced.

  The original Con Ed “bargain rate” was wiped out by periodic increases. For the last year before our new cogeneration began to provide 95 percent of our needs, Con Ed current cost us $40 million.

  Until cogeneration went on line, our power plant provided only heat and distribution for Con Ed’s bulk power. Today the power plant, which cost over $100 million to upgrade, produces not only heat, hot water, and air conditioning but also electric power, saving Riverbay at least $20 million annually.

  Yet it is a highly complex plant, with state-of-the-art generators retrofitted to accommodate aged equipment that has required  costly  upgrading or replacement. The facility has thousands of moving parts, failure in any of which could potentially shut the plant down.

  The safe, cost-effective operation of the plant depends on the director Brian Reardon, his assistants, and more than 30 members of union Local #94, operating engineers. NAES, a power plant consulting company, recommended that an experienced electric plant management company be contracted to help in the operation and maintenance of the facility for a few years. Another recommendation was made by Bill Mays, an experienced power plant manager. His proposal was approved by the Board without a thorough review of both his and the NAES report. I requested the tabling of that proposal, pending fuller review of both recommendations and abstained on the vote when the tabling was turned down.

  Fortunately, preliminary reports from the power plant indicate dramatic improvement in operation and maintenance. I am still hopeful, though, that there will be a comprehensive review of the operation of our power plant by the Board of Directors.

I can be reached

Bernard Cylich, Riverbay Corporation,
2049 Bartow Ave., Bronx, NY 10475,
lichsr@earthlink.net
718-379-5874