July 11, 2008

Seth W. Pinsky
New York City Economic Development Corporation
110 William Street
New York, NY 10038

Dear Mr. Pinsky,

I am writing to express my distress and alarm over the findings laid out in New York City Comptroller William C. Thomson, Jr.'s June 30, 2008 audit report on the lease agreement of New York Skyports, Inc. (Skyports), with the City of New York, for approximately two acres of land along the East River between East 18th Street and East 23rd Street in Manhattan. I appreciate that the New York City Economic Development Corporation (EDC), as administrator of the terms of the lease agreement with Skyports on behalf of the New York City Department of Small Business Services (DSBS), has agreed with the Comptrollerfs recommendation that it consider terminating its lease with Skyports and pursue legal action to collect the nearly $6.1 million Skyports owes the City. However, I must stress my extreme dismay that Skyportsf egregious neglect of key lease provisions was allowed to occur on EDCfs watch. As the State Senator in whose district this public land is located, I urge EDC to act expeditiously to comply with this recommendation as well as with the seven others set forth in the Comptrollerfs audit report.

Among the most shocking lease violations detailed in the audit report was Skyports' allowing the parking garage to deteriorate to such a degree that a seven-day Notice to Cure filed against it by DSBS in November 2007 noted that "catastrophic failure was a present danger." I appreciate that EDC installed emergency temporary shoring to prevent the garage's collapse, but both Skyports' negligence that led to this extraordinary deterioration and its failure to cure the violation itself within the seven day period should have provided sufficient evidence that Skyports is unfit to retain this lease. The lack of proper maintenance not only violates the lease terms but also presents a public hazard, with the repairs costing the City an estimated $5.5 million, according to the audit report. In addition, the report states that the total amount Skyports owes the city is nearly $6.1 million, including unpaid water and sewer charges, emergency repair fees and revenues due on goods, merchandise and advertising sold on the premises.

Judging from reactions that I have heard from my constituents, the public's faith in the City's ability to manage its leased properties generally and especially at this site has been shaken. To restore that faith, ensure public safety, and secure the maintenance of this property going forward, EDC needs to act swiftly and strongly in response to the Comptroller's recommendations. I urge EDC to keep me, other elected officials, and community representatives informed of the actions it is taking in response to this audit report. I anticipate hearing from you in the very near future with regard to EDC's plan of action.


Thomas K. Duane

New York State Senate
29th District

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