August 2021 - An Update on MHANY/MTA Lefferts Blvd Bridge Timeline
The following timeline has been drafted to provide a historical overview of the Kew Gardens community’s involvement in protecting and improving this critical historic and commercial asset.
CURRENT STATUS: Continued changes to the process and requirements by the MTA has caused confusion for everyone involved, and elongated a process that was initiated by the MTA in response to serious structural conditions at the Bridge. The MTA has fostered a sense of non-collaboration, exactly the opposite of the professional and well-thought-out community sensitive approach proposed by MHANY (MHANY Management Inc; a mutual housing association) and the Kew Gardens community organizations. These delays can only serve to exacerbate a serious situation that now reeks of incompetence or some other hidden agenda that has nothing to do with the structural issues, LIRR concerns or the neighborhood. If those were the concerns of the MTA, we would well be on our way to restoring the physical structure of the Bridge and maintaining an appropriate future for this commercial and historic asset that is currently in turmoil with no clear path to a workable win-win solution for all.
TIMELINE:
• Stores on the Lefferts Boulevard Bridge are the commercial heart of Kew Gardens, not landmarked; but historically significant, and integrated into the “small shop” setting on and off the Bridge
• For the past 20 years the Kew Gardens Civic Association (KGCA) and Kew Gardens Improvement Association (KGIA) have battled with the MTA over the lack of oversight of terms of the concession agreement with Kapoor in support of storeowners
• 2010 -MTA gives master lease to Zee and Kay Management (aka “Kapoor”) that includes the right to extend the lease for five years solely at Kapoor’s option, leaving the MTA in a vulnerable position given Kapoor’s poor performance
• 2017 – KGCA initiates Change.org petition to save the stores from being demolished and for the MTA to Repair and Restore the Kew Gardens, Queens Lefferts Blvd. Bridge collected 5,170 signatures
• 2017 - KGCA and KGIA meet with LIRR management and suggest an interim method for repairing the structural underpinnings of the bridge.
• 2018 - NYC Councilwoman Karen Koslowitz has $1 million allocated for a study to evaluate engineering options to repair the bridge after the MTA claimed there were no funds available for the study. The MTA used these funds to make interim repairs to the bridge.
• 2020 MTA reached an agreement whereby Kapoor agrees not to extend, and the MTA will not pursue compensation for the repairs as a result of Kapoor’s terrible management of the bridge properties
• October 2020 - KGCA and KGIA ask State and City electeds to request that the MTA’s upcoming RFP consider limiting RFP to only not-for-profit entities; partnering with a mission driven organization to retain the small business operators and the integrity of the Lefferts Boulevard Bridge; the MTA ignores request and issues standard RFP on October 16, 2020
• October 10, 2020 – KGCA reaches out to MHANY (MHANY Management Inc; a mutual housing association) to see if they were interested in responding to the upcoming MTA RFP [www.mutualhousingny.org]
• October 16, 2020 – MTA Issues RFP for Lefferts Boulevard Retail. RFP response due December 15, 2020.
• RFP requires improvements to the stores and the structural supports of the bridge
• Engineering report by McLaren details issues in need of remediation but without cost estimates
• RFP states properties will be delivered vacant meaning existing mom and pop stores will be thrown out; “In order to facilitate the (i) requisite environmental remediation to be performed at the buildings by the LIRR and (ii) Master Lessee’s required structural alterations & improvements to the Premises and the Bridge, the MTA intends to deliver all of the buildings with vacant possession.”
• No provisions for community involvement, consultation, or involvement as part of the RFP evaluation process; “The MTA’s Minimum Qualifications and Evaluation Criteria, as explained in Section V, includes the financial strength, management expertise, business plan, and track record of the proposer, as well as the compensation offered and the improvements proposed for the Premises, as applicable.”
• RFP states that the MTA’s goal is a concession program and leasing plan that emphasizes high quality retailers and regional and national brands which are out of character with historical commercial profile of this neighborhood asset; “The MTA seeks to ensure that the successful proposer will continuously attract and retain a vibrant mix of high-quality retailers that create a uniquely branded and exciting food and retail destination.”; “Concessions Program Development and Leasing Plan – Provide a leasing strategy and ongoing implementation and leasing plan to attract local, regional and national brands. Outline plan to maximize gross receipts and ensure a smooth transition between any sublessees.”
• December 2020 - MTA announces that the December 15 response deadline has been extended to December 21, 2020
• December 21, 2020 - MHANY submits unique proposal focusing on:
• Not for profit management eliminating the profit motive with the goal of maintaining commercial rents at reasonable rates
• Local Development Corporation will be formed, board controlled by MHANY with 2 seats for community organizations and 1 seat for storeowners
• MHANY agrees to do the asbestos mitigation, given its experience with this in affordable housing projects, allowing for stores to remain in operation during predevelopment and possibly even through construction
• Unique proposal will be a win-win for the community, storeowners and MTA
• MHANY assembles an exceptionally experienced team including:
o MHANY Management Inc. – 501(c)3 with decades of retail, master leasing and development experience particularly in affordable housing and mixed use buildings
o McLaren Engineering - performed MTA Lefferts Bridge conditions assessment in 2016 and 2020 included in RFP documentation
o WXY Architects & Urban Design – Women owned business that has prior and current experience with the LIRR including the Hempstead station in Long Island
o SCCS Group – construction managers with years of experience managing complex structural engineering and development projects
o Duvernay & Brooks LLC – Minority owned financial advisors
o Old Structures Engineering - historic preservation architectural experts
o ThinkWoven – waste management consultants specializing in creative solutions to collecting, storing and hauling waste in urban environments
o Hirschen Singer & Epstein LLP – attorneys Specializing in City and State affordable mixed use, housing, commercial and community development projects
o Kew Gardens Civic Association
o Kew Gardens council for Recreation and the Arts
• January 13, 2021 – KGCA initiates a new Change.org petition: Kew Gardens Stakeholders Call for not for profit Management of Lefferts Bridge from MTA - 925 signatures have been collected. Notification of signatures automatically sent to MTA and elected officials.
• February 17, 2021 – Oral interview with the MTA as one of the finalists under consideration for the award of the project
• March 2021 – In response to further questions and clarifications from the MTA:
• Asbestos Mitigation - MHANY advises the MTA that MHANY will assume responsibility for asbestos mitigation in order to make a best effort for store owners to remain, allowing the MTA to not have to deliver the property vacant as was stipulated in the RFP. MTA agrees to this.
• Unpaid Rent - MTA advises MHANY that the storeowners can only remain in the stores if the back rent that the MTA is owed is satisfied ($306,000 as of March 2021). MHANY advises the MTA that they are prepared to work with the storeowners to develop a repayment plan to reimburse the MTA for back rent. Any agreements would be subject to MTA approval. However, the MTA needs to furnish the appropriate information and documentation on what is owed to MHANY before this commitment can be finalized. MHANY has asked MTA for back rent information to help formulate a rent collection plan and has asked the MTA to consider some leniency given the State mandated lockdown in 2020 during the COVID pandemic
• Revenue Split – After request for clarification from the MTA, MHANY revises proposal to include a revenue split in keeping with the not for profit nature of the undertaking and with the goal of keeping commercial rents affordable for small business owners.
• March 30, 2021 – NYS Assembly member Daniel Rosenthal and NYS Senator Leroy Comrie announced passage of their legislation (A724/S3266) to protect the character of the Lefferts Boulevard Bridge amidst restoration, and to give protections to existing small businesses atop the structure. Rosenthal and Comrie argued that the state of disrepair to the storefronts came at no fault of the business owners, a consideration not included in the MTA’s impending bid. The legislators introduced a bill to give right of first refusal to existing small businesses and to preserve the footprint of the current structure. This legislation follows a 2018 bill from the elected officials which saved the bridge itself from demolition.
• April 15, 2021 – MHANY receives letter of conditional approval from MTA advising that they have been designated to commence negotiations for the lease. MTA requests certain information and clarification of MHANY’s proposal which is readily submitted.
• May 2021 – MTA advises MHANY that they were not considering the ability to assign the leases as part of the financing, despite that this was made very clear in the MHANY proposal. When MHANY tells them that no lender will provide financing if they don’t have any security in the project, MTA says that MHANY can finance the project from their own net assets. MHANY reminds the MTA that requiring this goes against standard industry practices and would basically eliminate any party from financing the project.
• June 2021 – MHANY receives a phone call that they are being “dedesignated” and the RFP will be reopened with the reason given to allow all the proposers to resubmit using leveraged financing using the lease income.
• MHANY and the community organizations notify the electeds and the MTA that this is giving others preferential treatment given that all the proposers had read the same documentation and had the opportunity to propose this. The MTA also reserved the right to make determinations about the proposals at its discretion; “The MTA may at any time exclude proposals, that in its sole and absolute discretion, are deemed to fail to comply with the requirements of this RFP or to fall outside of the competitive range.”
• June 2021 - MHANY and MTA’s Andrew Greenberg discuss the need for a valuation commitment of the investment that MHANY is prepared to make in the bridge. The proposal called for $16.4 million in rehabilitation and soft costs. MHANY’s engineers, McLaren, the same firm that did the MTA engineering evaluation, felt comfortable guarantying $6.4 million absent the ability to do a full ‘behind the walls’ inspection.
• June 29, 2021 - MHANY receives a letter from the MTA rescinding MHANY’s Conditional Designation Letter sent on April 15, 2021, advising that the subject RFP remains open. Please note the following:
• We will consider proposals in which all or part of the funding for the required structural improvements, pursuant with the McLaren Inspection Report provided with the subject Request for Proposals, will be secured by the leasehold interest.
• All provisions of the RFP’s “Termination for Corporate Purposes” section remain unchanged except that reimbursement for unamortized improvements is not limited to the first 10 years of the lease; instead, reimbursement will be based on the useful life of the required improvements during the initial 25 years of the master lease agreement on a straight line basis.
• MHANY was instructed to advise by July 6 if they were interested in responding.
• July 5, 2021 – MHANY responds that all these points were covered in their original proposal including the valuation proposal and that MHANY is still very much interested in moving forward in partnership with the MTA.
• July 19, 2021 –
• MHANY sends formal response to MTA regarding the June 29th letter which was due on July 21st.
• 5 minutes after sending their response Andrew Greenberg calls MHANY and advises that the MTA is giving the other respondents another two weeks to respond and since he has not opened up their response so they can revise it as needed.
• MHANY responds that its June 29 submission is valid as submitted and again reiterates its desire to work with the MTA and move forward.