EDUCATIONAL CONSTRUCTION FUND
In January 1995 ETHOS Development Corporation and David Gura Architects completed the first phase of our contract with the Education Construction Fund to analyze seven Manhattan school sites for their development potential. Our analysis included zoning studies, massing diagrams (under ZR 740-75 - Educational Construction Fund Projects), and architectural and valuation studies of each site, produced to support the production of RFP's for the lease of development rights for each of the sites. We presented these findings to ECF in November 1994 and January 1995.
Our analysis showed that there is an enormous potential for revenue to the City. The lease payments (including payments in lieu of real estate taxes (PILOT)) to ECF from the lease of development rights will total more than $16.5 million the first full year of residential project occupancy. This total is exclusive of the Clinton school site, which at the time of our report had nominal value (this has obviously changed). These payments would support bonds ranging from $120 million to $166 million. As calculated, this would provide funds for the construction of as many as 5,500 school seats. The total present value to ECF of the leases could be $447 million or more (1995 dollars).
We recommended the issuance of RFP's that could be quite specific as to size and scope of the permitted development at each site. This approach would establish the "certainty" of what could be built, substantially reducing the developer's risk and thus generating the maximum possible bid values for each site. This view was supported in meetings with Board of Education members and other City officials. In order to do this, ETHOS recommended that we process the environmental and public reviews needed for each site on behalf of ECF.
The City school system's fiscal problems coincide today with a positive trend in the Manhattan housing market. If ECF fulfills its mission in a timely way and it can gain the support of those agencies of the City that will review the proposed development, the City and the school system will benefit from the untapped value of seven Manhattan schools. (Dozens of other schools throughout the City may also yield untapped development value.)
Not since the 1970's has the City had a similar need for school funding combined with such a strong housing market. The report demonstrated that ECF is in a unique position to benefit from these trends.