Bleeding hearts are actually in favor of cash bail

From the NY Times:

City officials are scrambling to prepare for a human rights organization’s mass effort to bail out 500 women and teenagers from the Rikers Island jail complex, despite strong resistance from the police and prosecutors.

Across the city, prosecutors are identifying cases that might be affected by the bailout, and calling hundreds of crime victims and witnesses in those cases to let them know that defendants who they thought were in custody might soon be released on bail.

Prosecutors in the Bronx said they were working to safeguard as many people who might be vulnerable through measures like orders of protection.

“We are doing all we can to protect our victims and witnesses in the event the defendants accused of violence against them are released from jail,” Darcel D. Clark, the Bronx district attorney, said in a statement.

The Robert F. Kennedy Human Rights group is raising up to $5 million for the bailout, and will enlist 200 volunteers to help identify and free female prisoners at the Rose M. Singer Center, and 16- and 17-year-olds at the Robert N. Davoren Complex, starting Oct. 1.

Kerry Kennedy, president of Robert F. Kennedy Human Rights, says the plan, which organizers believe could be one of the largest so-called mass bailouts in the country, will move forward despite the city’s concerns.

The bailout is designed to support an end to cash bail, which activists say discriminates against minorities and the poor, and to push the city to close the dangerous Rikers jail complex more quickly than the current 10-year timeline. Approximately 87 percent of the jail population is black and Latino.

CitiBike to become more elitist

From the Daily News:

The cost of Citi Bike annual memberships could rise by more than 50% under a new deal to save the cash-strapped program.

The city has discussed raising the annual membership fee for the popular bikeshare system from $95 to $140 or even $155, according to a source with knowledge of the discussions.

The price hike would be part of a deal to save Citi Bike, which has been on a pathway to bankruptcy and plagued with operational problems.

REQX Ventures — an investment firm formed by Equinox gyms and its parent, the Related Companies — is currently in negotiations with the city to purchase 51% of Alta Bike Share, which oversees Citi Bike through a subsidiary.

“It’s well understood that fees will go up,” the source said.

While the cost of annual membership would soar, 24-hour access passes would probably remain at $9.95.

Council Members want foreclosures condemned

From the Observer:

Council members Donovan Richards, Daneek Miller and Mark Levine rallied with activists and academics on the steps of City Hall today to call on the city to use eminent domain to stop home foreclosures.

They discussed a new report by the left-leaning New York Communities for Change (N.Y.C.C.), which revealed that thousands of African-American and Latino homeowners were still at risk of losing their homes due to foreclosures and underwater mortgages.

Mr. Richards, who represents areas like southeast Queens and the Rockaways that were hard-hit by the foreclosure crisis and Hurricane Sandy, went straight to the point.

“I’m here because I think the people need their bailout. Didn’t the banks get their bailout? So why can’t the people get a bailout?” Mr. Richards said. “Today I stand with N.Y.C.C. to call on New York City to use eminent domain to really seize these mortgages and make a difference in the lives of New Yorkers.”

Financial institutions have aggressively opposed the usage of eminent domain in this instance and questioned its legality–it remains unlikely, observers say, that it will be implemented in New York City. Mr. Levine, however, said the tactic could be viable.

Developer may bail out CitiBike

From the Wall Street Journal:

The company that runs Citi Bike is in advanced talks with an affiliate of a major real-estate developer about an investment that would fuel an expansion of New York City's bicycle-sharing program, according to people familiar with the negotiations.

Alta Bicycle Share Inc. of Portland, Ore., which runs Citi Bike, has been negotiating a deal with REQX Ventures, an investment firm formed by the upscale fitness center chain Equinox and its parent, Related Cos., these people said.

Both parties have signed a term sheet outlining a deal to inject capital to help bring the Citi Bike program to more neighborhoods in New York City, according to the people. The potential investment would also fund improvements to Citi Bike's software, one person said.

It was unclear how much capital REQX Ventures might invest or what kind of stake in the Citi Bike program the company might get in return. It remains to be seen whether the two sides would close the deal, or whether city officials would approve it.

CitiBike bankrupt; City Council wants bailout

From the Daily News:

The financially troubled company running the city’s bike rental program is considering raising its rates so it can stay afloat, new Transportation Commissioner Polly Trottenberg said Thursday.

“We’re talking to them,” Trottenberg told the Daily News at City Hall after testifying before the City Council’s transportation committee. “I would put it this way — all options are on the table. I think everyone agrees it turned out to be a real bargain for New Yorkers, who used the system twice as much as users of other cities.”

A hallmark of the Bloomberg administration, Citi Bike launched in May with numerous docking stations in Manhattan south of 96th St. and in parts of Brooklyn. Right from the start it was wildly popular — there were 80,000 annual members in just three months, exceeding expectations — but former Mayor Bloomberg conceded in October that the operator was not making a profit.

Citi Bike annual membership costs $95, which allows a user to make an unlimited number of 45-minute trips. A 7-day pass costs $25, while the daily variety goes for $9.95.

Many neighborhoods have been clamoring for installation of Citibike stations, but it’s unclear when the system will expand, officials said.

“It’s not going to be in the immediate future, but we’re going to see if we can figure out the financial and operational issues and set them on a good path,” Trottenberg said.

At Thursday’s hearing, some committee members said Citi Bike has become part of the city’s transportation infrastructure and warrants government subsidies.

“To achieve full build out and go to the neighborhoods we want to go to, I think it’s going to take public funds,” Councilman Rory Lancman (D-Queens) said.

And does Rory have CitiBike in his district? No. So why does he think it's such a great idea to fund a failing program? How about letting CitiBank pay for the increased cost since they are getting free advertising from it and got a very generous bailout from us schmucky taxpayers in the not-too-distant past?

Council bails out High Line charity - again

From DNA Info:

The High Line is set to get a whopping $5 million in extra cash from the city — more than almost any other park — even as it reported pulling in $85 million in private funds and established a lucrative concessions deal, city records show.

The High Line cash, appropriated by the City Council as part of the 2013 budget's capital expenditures, will be paid to the Friends of the High Line for use building the estimated $90 million construction on its third section.

The move has some park advocates questioning why the city is set to spend on the High Line such a large part of its $105 million, 2013 appropriations for 142 park projects — when the taxpayer money could go to other city parks that have greater infrastructure needs and fewer wealthy donors.

Geoffrey Croft of NYC Park Advocates, called the difference in city allotments to park space discouraging — pointing to several other parks that could use city cash for improvements, including Ferry Point Park in the Bronx and Highbridge Park in Washington Heights.

"When you consider the dramatic needs of other parks that need a tremendous amount of help, the disparity is unbelievable," he said.

"The High Line and Brooklyn Bridge Park, they’re exciting new additions to the parks system," Croft said. "But clearly that money could be used to take care of longstanding needs in other, poorer communities. But it’s not a priority."

Let's recall that Friends of the High Line was supposed to raise the money for their tourist playground-in-the-sky PRIVATELY. But they failed, so Christine Quinn saw to it that they got bailed out. Again. Meanwhile, parks in Queens look like crap or won't get built because "we have no money."

So much for that...

From the NY Post:

The White House plan to save as many as 13 million cash-strapped families from losing their homes in foreclosure was a huge flop -- so flawed it may have made the housing crisis even worse.

That's the finding in a blistering report yesterday by the Congressional Oversight Panel, which spent a year examining why the Treasury's $30 billion rescue effort never made a dent in the housing crisis and probably created more problems.

The panel cited a litany of blunders and missteps that slipped through the highest levels of Treasury Secretary Tim Geithner's team, which then tried to cover up the shortcomings of the failed rescue program, known as Home Affordable Modification Program, or HAMP.

The safety-net program was meant to help homeowners and lenders revise mortgages and make monthly payments more manageable.

But barely 700,000 families expect to benefit from the nearly two-year old plan -- a small portion of the 8 million to 13 million families targeted-- while the $30 billion rescue pot remains largely unused. Just $4 billion has been spent thus far.

"Many of the problems plaguing HAMP are inherent in its design and cannot be resolved at this time," the panel aid.

It added that "Treasury's reluctance to acknowledge HAMP's shortcomings has had real consequences" and that "many billions of dollars set aside for foreclose mitigation may well be left unused."

The panel said the clock ran out Oct. 3 for Geithner to revise his bungled program, leaving the US stuck with a wasteful and useless effort while foreclosures rise.

Belmont, Aqueduct and Saratoga may all close

From the Daily News:

The agency that runs the state's major thoroughbred racetracks says it will close them down on June 9 unless lawmakers agree to a bailout.

The New York Racing Association, which operates the Belmont, Aqueduct and Saratoga tracks, made the announcement Friday after sending out layoff notices to its 1,400 employees.

The financially beleaguered NYRA said it would "begin the implementation of plant closures" at the tracks on June 9 - three days after the prestigious Belmont Stakes.

"NYRA continues to pursue solutions with the state of New York that may avert the cessation of operations," NYRA said in its statement.

The Belmont meet is scheduled to end on July 18. The storied Saratoga season runs from July 23 through Sept. 6.

UPDATE: Crisis averted!

City entering the mortgage business

From the NY Times:

New York City has launched a new plan to rescue moderate-rent apartment buildings that were swept up by private equity firms during the financial boom, then left to deteriorate as they drifted toward foreclosure when the new owners were unable to repay their loans.

Under the program, the city’s housing agencies will have $750 million to lend over five years, to enable new, responsible owners to buy and repair buildings that are in the most financial and physical distress.

About $150 million will go toward quickly providing capital for new owners to acquire such buildings; $600 million in New York City Housing Development Corporation bonds and city capital go toward buying and repairing distressed buildings. The New York City Housing Development Corporation will issue mortgages itself.

The city, through the Department of Housing Preservation and Development, plans to concentrate on the most beleaguered apartment complexes in the city — 267 buildings containing 3,564 apartments that are deep in a state of disrepair and in or close to foreclosure. Roughly 100,000 apartments citywide are in buildings that are carrying too much debt, with the money owed on them greater than their current worth, according to the department.

Bloomberg uses federal stimulus money to bailout private developers

From the NY Times:

The Bloomberg administration, moving to restart stalled development in the heart of Downtown Brooklyn, has picked a big housing and retail complex to receive $20 million in tax-exempt bonds financed by the federal stimulus program. The complex, City Point, would bring hundreds of apartments and a large shopping center to the eastern end of the Fulton Mall.

The city also selected a project to build a supermarket and shopping mall at Arverne by the Sea, a residential complex on the Rockaway Peninsula in Queens, for $16 million in financing, leaving roughly $90 million more in bonds to be distributed later, said officials at the city’s Economic Development Corporation.

The proposed financings still have to be approved by the city’s Capital Resource Corporation, a body administered by the development corporation that is set to hold a public hearing on them next month. Questions are likely to arise about the role of public financing in private development and the potential displacement of small businesses.

“This is a sort of David-and-Goliath example of small businesses that are paying the rent and providing services to a diverse constituency of Downtown Brooklyn and having something kind of dropped on top of them, which is a big wealthy developer getting subsidies,” said Bettina Damiani, director of Good Jobs New York, which studies the use of economic development incentives. “So the impact on the local community needs to really be taken into consideration before we move forward with economic stimulus.”

Photo of Albee Square Mall from Forgotten NY.

Congress bailing out slumlords

From the NY Post:

A bill winding its way through Congress proposes to prop up deteriorating apartment complexes by injecting $2 billion from the Troubled Asset Relief Program into an effort to stabilize multifamily properties in default or foreclosure.

The bill, which is called the TARP for Main Street Act and was sponsored by House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Nydia Velazquez (D-Brooklyn and Manhattan), would use TARP funds that have been returned by banks and plow it into programs that, according to the bill, would create "sustainable financing" for the complexes as well as provide funding for property rehabilitation.

The House is considering the measure, which focuses on apartment buildings with units that are either rent stabilized or receive government subsidies.

Many developers during the housing boom bought rent-regulated apartments by borrowing against the properties themselves and betting they could make hefty returns by converting them into market-rate buildings.

However, thanks to the recession and the collapse of the real estate market, many developers are now struggling to make mortgage payments, let alone finance repairs and upkeep of the properties they own.

From the Daily News:

Some of the city's worst landlords are sharing in $81 million in federal stimulus money - even though their buildings are riddled with housing code violations.

Since March, millions of dollars have been doled out to buildings where tenants have repeatedly complained of rats, roaches, faulty elevators, lack of heat and flaking lead paint.

Millions more will follow.

The problem is that the Recovery Act distribution makes no distinction between good landlords and bad ones.

As a result, landlords - regardless of the number of serious housing code violations they've racked up - are allowed to pocket stimulus money without being forced to make repairs.

Subprime bailout #2 in our future

From the Wall Street Journal:

Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn't well known is that a parallel subprime market has emerged over the past year -- all made possible by the Federal Housing Administration. This also won't end happily for taxpayers or the housing market.

Last year banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100% taxpayer guarantee. Many of these have the same characteristics as subprime loans: low downpayment requirements, high-risk borrowers, and in many cases shady mortgage originators. FHA now insures nearly one of every three new mortgages, up from 2% in 2006.

The financial results so far are not as dire as those created by the subprime frenzy of 2004-2007, but taxpayer losses are mounting on its $562 billion portfolio. According to Mortgage Bankers Association data, more than one in eight FHA loans is now delinquent -- nearly triple the rate on conventional, nonsubprime loan portfolios. Another 7.5% of recent FHA loans are in "serious delinquency," which means at least three months overdue.

The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law FHA must carry a 2% reserve (or a 50 to 1 leverage rate), and it is now 3% and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.

AIG GAVE $100K TO NEW YORK DEMOCRATS

CONTRIBUTION MADE BEFORE STATE HELPED BANK GET FEDERAL LOAN

ALBANY, N.Y (AP) New York campaign finance records show American International Group donated $100,000 to the state Democratic Committee just before Democratic Gov. David Paterson and his insurance superintendent launched marathon sessions to prop up the embattled insurer.

The contribution was made Aug. 29. Insurance Superintendent Eric Dinallo started negotiating with AIG and federal officials within about two weeks.

On Sept. 16, Paterson announced the "great news" that New York officials helped the giant insurer strike a historic loan deal with the Federal Reserve to keep AIG afloat.

There was no immediate comment from Paterson, Dinallo or AIG.

The state's effort is credited with giving AIG time to survive.

State Senate takes tolls off the table

From NY1:

Senate Democrats are no longer considering a plan to place tolls on city-owned East River and Harlem River bridges, according to NY1 sources.

State lawmakers are now said to be looking at a short-term fix which would save the MTA from having to implement massive fare hikes and service cuts right now.

According to sources briefed on the plan, it includes a payroll tax of a quarter of one percent. Subway and bus fares will also go up an estimated four percent.

Planned service cuts will be avoided.

The plan, however, does not address the agency's long-term capital spending on projects such as new stations or the Second Avenue subway line.

AIG = All Income Gone

From NY Post:

American International Group Inc., once the world's largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.

The results come as the U.S. government announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.

And more from the Post:

The US government is set to dole out an additional $30 billion to AIG, according to people familiar with the matter, raising concerns the insurance giant deemed too big to fail is fast becoming a black hole for taxpayer dollars.

The new cash infusion would be American International Group's third since September. It would be paid in the form of a line of credit from the Troubled Asset Relief Program, or TARP, a person familiar with the situation told The Post.