(Center) Andrew Berman, head of the Greenwich Village Society for Historic Preservation.
A downtown historic preservation group is accusing the city of doling out a sweetheart deal to the developer chosen to build a 22-story tech hub in Union Square, claiming the new tenant is getting more bang for its buck than the property’s prior occupant.
“It seems highly suspect that the developer of a 21-story office tower is paying barely more than the operator of a 2-story appliance and electronics store for use of this incredibly valuable land,” Andrew Berman, the society’s head, told the Daily News.
“This is and has been from the beginning a sweetheart deal for political allies of and donors to the mayor,” he added. “There was absolutely no transparency to the process by which RAL were chosen to get this incredibly valuable piece of public land for a song.”
Berman pointed to a lack of any documented evaluations of bids on the development deal, which is supported by the results of Freedom of Information requests made by his group to the city’s Economic Development Corporation. In response to a request for notes, ratings or a scoring sheet regarding the selection of RAL over several other applicants, EDC responded that it located “no responsive records.”
Berman’s preservation society also noted campaign finance records show Andrew Rasiej, CEO of Civic Hall — RAL’s partner in the development — donated at least $8,000 to Mayor de Blasio since 2004. Its head, Robert Levine, gave the mayor’s 2017 re-election campaign $400. The New York City Campaign Finance Board sets an election-cycle limit for mayor, public advocate and controller at $4,950.
RAL also has been generous to de Blasio and his now-defunct non-profit Campaign for One New York. The company gave the Campaign for One New York at least $10,000 in 2015.
EDC spokeswoman Stephanie Baez said it is “typically the case” that agency staffers deliberate over bidders orally and that a paper trail of deliberations wouldn’t have been created necessarily.
“The best applicant was chosen,” said Jane Meyer, a spokeswoman for Mayor de Blasio. Meyer said the donations had nothing to do with RAL being selected.
Jerald Watson, a senior associate in the EDC’s Real Estate Transaction Services division, said the $2.6 million annual rent RAL committed to pay could be supplemented by additional profits RAL might make through rent collected from sub-tenants. Watson said the deal with RAL stipulates the company would pay the city a percentage of those profits, but declined to provide more details.
Good government advocates expressed skepticism about the deal.
Betsy Gotbaum, executive director of Citizens Union, said “a pattern” of favoring campaign donors has emerged since de Blasio became mayor. When told about EDC’s response to the preservation society’s records request, she described it as “not above board.”
“That’s really bad,” she said. “It’s not that anyone is objecting to a tech center. It’s the manner in which it was done.”
Another factor in the deal that should raise eyebrows, according to the preservation group, is the involvement of James Capalino’s lobbying firm, which works for RAL.
Capalino represented Slate, the buyer in the controversial sale of Rivington House, a Lower East Side nursing home that had served residents for years. The city received just $16.1 million to lift deed restrictions by the seller, the Allure Group, which then sold the property to Slate for a $72 million profit.
RAL, Rasiej and Capalino did not return requests for comment.
“This clearly raises many deeply concerning questions, and the lack of transparency in this process and the ludicrously one-sided deal given this developer at the public’s expense should be thoroughly investigated,” Berman said.
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