EDC forced to pony up their cash

From the NY Times:

Bowing to pressure from auditors, the organization that oversees economic development in New York City has agreed to hand over more than $20 million in rental payments each year to the city.

The group, the Economic Development Corporation, had previously resisted giving up the money, which it earns by leasing space in Times Square. But after Comptroller John C. Liu released a stinging audit of the corporation’s financial methods in April, officials re-examined the practice.

In explaining the reversal, the corporation said it was responding to Mr. Liu’s report — one of the first major salvos of his tenure as comptroller — as well as the dire economic circumstances facing the city.

David Lombino, a spokesman for the corporation, said the group had determined it would be “optimal” to cede the money so the city could “balance its budget and continue to provide valuable services to its people.”

Under Mayor Michael R. Bloomberg, the Economic Development Corporation has emerged as one of the city’s most powerful agencies. It is a nonprofit group that contracts with the city to manage a variety of projects in places like Coney Island and Willets Point, Queens. It earns most of its money by selling and renting property for the city. Its president is appointed by the mayor.

According to budget documents, the corporation will contribute $20.3 million in rental payments from the Times Square project to the city this fiscal year, $27.7 million in 2012, $32.5 million in 2013, and $39.9 million in 2014.

Mr. Liu, who took office in January, welcomed the decision, saying it was a victory for his office. He said the money should be subject to public scrutiny as part of the general budget.

“This is good news for our taxpayers,” he said. “The bottom line is that we just can’t afford for any city agency or entity to be holding onto these funds.”