New York – Bond deals that are critical for capital projects at New York City’s private schools and non-profits take longer to close under Mayor Bill de Blasio than his predecessor due to greater scrutiny but also last minute scrambles for his signature, according to sources.
At the little-known Build NYC Resource Corp, some deals are slower because the agency is now approving more and bigger projects that are being more closely scrutinized, Build NYC spokesman Anthony Hogrebe acknowledged in response queries after a Reuters’ analysis of deals and interviews with two sources.
But deals also stall when they land on the mayor’s desk for his final approval, the sources told Reuters.
Mayoral sign-off, needed to close the deals, took about two weeks under former Mayor Michael Bloomberg. De Blasio took office in January 2014 and now it can take two or three times as long to get his signature, the sources said, even though it is considered pro forma because the mayor’s office appoints most of the Build NYC board that approves the deals.
The sources, who spoke on condition of anonymity, said the timing of de Blasio’s signature was inconsistent and unpredictable.
“You’re liable to get it at the last minute, the morning of the closing,” said one of the sources who is familiar with the process. “They’re not going to try to kill a deal that was previously approved. But the actual signature might hit your desk at a very late date.”
“The mayor has a different style,” the source said. “They want to take time. They want to look at it.”
Wiley Norvell, de Blasio’s deputy press secretary, disputed the characterization by Reuters’ sources of the mayor’s process. “We believe that the public deserves a process that is rigorous and efficient, and that’s what we’ve put in place,” Norvell said in an email.
Build NYC, an arm of the New York City Economic Development Corp, is meant to create jobs and boost the local economy by providing access to tax-exempt financing for organizations to expand.
“These deals are not necessarily substantial by the scale of New York City bond offerings, but they could be life and death for some of these organizations,” former New York City Comptroller John Liu said in an interview. “A lot of these organizations have private funders who are looking to see that they make progress on the public front.”
The agency, created in 2011 during Bloomberg’s tenure, is still evolving. It approved 34 projects in fiscal 2015 versus 26 in fiscal 2014, according to Build NYC data included in board documents published by government watchdog Good Jobs New York.
The average size of approved deals has increased slightly, to $36.6 million in fiscal 2015 from $35.1 million in fiscal 2014 and $32.8 million in fiscal 2013, according to Reuters’ calculations.
The difference appears greater for deals that have actually closed. Closed deals averaged $40 million in fiscal 2015, compared with $26.6 million in 2014, Hogrebe said.
The method Build NYC uses to sell bonds has also evolved. Instead of relying on private placements, more of those bigger, complex bond deals were sold through public offerings, 10 in fiscal 2015 compared with one in 2014, Hogrebe said.
A majority of Build NYC bonds, 58 percent by volume, has gone to refinance old debt, which creates fewer new jobs and lessens economic benefits to the city, according to a report last month by the New York City Independent Budget Authority.
As of June 30, Build NYC had issued $1.8 billion of so-called conduit debt, which it does not have to repay because it sold the bonds on behalf of borrowers. The debt is separate from that sold by the city for public projects.
Build NYC spokesman Hogrebe said that under Blasio, the agency was placing increased emphasis on the creation of quality, well-paid jobs and “ensuring that New Yorkers have access to economic opportunity.
“The Build NYC staff has been conducting extra due diligence and analysis on projects to make sure they meet those goals,” he said, “and that work takes time.”