City PILOTs Go Off Course

Categories: Citystate

It's fair to say the Bloomberg administration is not a fan of using the normal channels to do the people's business. To some—particularly fans of the mayor's successful bid to wrest control of the schools from the board of education—that's a plus. Opponents of the failed West Side Stadium (the financing for which was going to circumvent normal budget procedures) or the Atlantic Yards project (which won't be subject to the usual ULURP process) see it as a bad thing.

Now the city comptroller reports that the Bloomberg administration has circumvented the city's budget process to allocate $22 million to economic development projects—including work on the West Side Stadium deal and that economic dynamo known as the Police Museum. Now, $22 million is not a lot of money in the city's $50 billion-plus budget, but the principle behind checks and balances is probably worth something. And, says the report from Bill Thompson's office, the practice breaks the law.

The money involved comes from payments in lieu of taxes, or PILOTs. These are payments that property owners make if they get a tax break that exempts them from property taxes. The PILOTs are usually lower than the tax they would have paid. The money is supposed to go to the city's treasury. But in Fiscal Years 2002 through 2004, the administration diverted $22 million of it to projects of the Economic Development Corporation, which were "approved without public scrutiny," according to the comptroller.

The EDC says no laws are being violated. But while EDC denies that its projects are approved without public scrutiny, its defense is revealing. The public scrutiny comes in, EDC says, because, "Meetings of the EDC's Executive Committee are open to the public and . . . public notices are announced prior to meetings of the Board of Directors of the EDC and its Executive Committee."

The comptroller points out, however, that the members of the EDC executive committee are either appointed by the mayor, picked by the chair the mayor appoints, or nominated by the council speaker and okayed by the mayor. In other words, the public might be able to scrutinize projects at the EDC's open meetings, but it's not like there's an independent voice there to actually stop them.

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