From the NY Post:
Here are the numbers The Post’s experts — the ex-city official, watchdog Henry Stern and developer Ken Diamondstone — found suspicious.
Instead of simply renovating its own buildings, Ridgewood Bushwick sold them for $14.9 million to itself and another investor for an “inflated” amount in what may have been a bid to get more government financing, said a former city official. The sale doubles the total cost of the project, he noted, so the developer fee — based on a percentage of the total project cost — is doubled as well.
This $5.6 million fee is quadruple what it should be, the former official said. The state claims it’s simply a clerical mistake that includes all preconstruction, or “soft,” costs in addition to the actual payment to an architect and engineer. Still, the ex-official asserts, the sum is troublesome. “If I had a project where my soft costs were greater than my hard costs, the only reason why would be to stick a bunch of money in my pocket,” he said.
The $3.5 million developer fee for only 18 months of renovation work — which goes straight into the pockets of Ridgewood and its executives — is double what it should be, the ex-official said. He said Ridgewood is charging 12 percent of the project’s total cost when it should charge only 5 percent. Affordablehousing developer Ken Diamondstone said, “I can only say that I wish I had a deal like that.”