Monday, January 09, 2006

The "Fleasing" of the City Council

As we have been outlining here, the decision by Judge Cahn (hopefully to be appealed) that the Commissioner of Small Business Services has more power than even the mayor when it comes to the transfer of city-held leases is a direct threat not only to the Charter mandated powers granted to the City Council but to the mayor's fiduciary authority to protect the tax payers. In effect, according to Cahn, the so-called public market exception gives this commissioner unbridled power to terminate and transfer existing leases without any of the required competitive bidding that is laid out clearly in Chapter 15, Section 384 of the City Charter.

In this section the mayor's responsibility is to authorize the leasing of city property "only for the highest marketable price or rental, at public auction or by sealed bids and after advertising for at least thirty days in the City Record..." In addition, this process cannot be authorized "until a public hearing can be held with respect to such sale or lease..."

As we have already pointed out with respect to the BTM none of these requirements, including the mandated appraisals of the value of the leased properties, was ever carried out. What happened clearly was that all of the Charter-mandated safeguards were ignored and the BTM lease was simply handed over to the Related Company for a fraction of what the property would have gone for in a competitively bid process.

On top of this Section 384 also clearly states that the transfer of a lease must be subject to a land use review process and, therefore, a final disposition from the City Council (City Planning Chapter, Section 197-c). This also was avoided because the mayor (and Related) argued that Section 1301 superseded Section 384's mandated processes.

So in essence the entire BTM deal can be seen in legal terms as the proverbial fruit of the poisoned tree. There needed to be an open bid process, an appraisal of the involved property and, finally, a full Council review of the transfer of the BTM lease (all done before any Gateway Mall land-use application could be entertained by the Council).

None of which was ever done. This is the challenge before the Council. If it accepts the Gateway application for disposition than it is, by remaining silent on the underlying legality of the lease transfer, accepting the mayor's "market exception" premise (and by extension the diminution of City Council authority). The Alliance believes that this is an unsupportable precedent that the legislative body cannot allow to come into being without a challenge.