COMMITTEE ON BUDGET AND APPROPRIATIONS

MINUTES

FEBRUARY 23, 1996

B & A MEMBERS: Swanson, Delfino, Darcy, Young, LaMotte

OTHERS IN ATTENDANCE: C.E.’s Office: Gina Angiulo, Jamie Hastings, Neil DeLuca; Budget Dept: Joe Phelan; Law Dept: Sheryl Nearman; Others: George Hosey, Mark Tulis, Steve Galef (Hospital Board), Andrew Herz (Richards & O’Neill); Legislators: Oros, Bronz, Mosiello, Stewart- Cousins; BOL: Gary Kriss, Pat Gorski, Don Sandford, Bob Boland, Tina Seckerson

Co-Chair Swanson called the meeting to order at 9:15 a.m.

Discussion: (There is a cassette tape on file for more detailed information)

• Mr. Herz explained that he was hired as a consultant to evaluate the lease, not to act as legal counsel to either party or to render legal advice.
• Mr. Herz stated that many questions were raised in his mind due to the wording in the draft lease. In the draft evaluation (on file) he lists over 50 issue with the lease - some trivial some not so trivial. After meeting with the landlord’s attorney and representatives of the County Attorney’s Office both the County executive and the landlord indicated that they were amenable to changes. As a result many of the original 50 issues were amended and are no longer listed in the final evaluation. Mr. Herz provided a copy of the original 50 issues with a mark up of those items which were removed because they were agreed to.
• Mr. Delfino asked how Mr. Herz approached this lease to evaluate it. Mr. Herz responded that he looked at the types of rights and protections he thought were relevant to an extremely creditworthy tenant leasing an entire building for 20 years.
• Mrs. Swanson inquired as to Mr. Herz’s experience in dealing with government leases to which Mr. Herz assured the Committee that he has done a great deal of government work.
• At 9:30 a.m. Peter Berman of Julien J. Studley, Inc. called to discuss his report (on file) Committee. Mr. Berman stated that he felt the County should ask for a rent abatement. He felt it would be appropriate to ask for a year’s free rent. In today’s real estate market he stated that it is not unusual for a tenant such as the County to get rent free for a specified period of time.
• With regard to hours of operation, he stated that it is not unusual for first class office buildings in Westchester County to consider Saturday’s from 8:00 a.m. to 1:00 p.m. a business day with full services. There should be no extra charges for this.
• The HVAC system should be fully reviewed to see if it is adequate to meet needs. electric wattage per square foot should be reviewed by an architect.

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• Mr. Herz stated that in his opinion this lease is not a gross lease (found in most multi-tenant buildings where the landlord supplies services) or a net lease (where all responsibilities for maintenance fall on the tenant) but more of a hybrid (essentially a gross lease in terms of what the landlord does but in terms of cost; does things at the tenants expense). Mr. Berman asked why the tenant should be subject to capital costs.
• Mr. Herz asked Mr. Berman if the fact that there is a mortgage on the building would have any effect on the rent abatement request, i.e. how would the mortgagee like it? Mr. Berman’s response was "Who cares, too bad if they don’t like it, let the bank take the building over."
• The Committee expressed their concern with regard to zoning requirements as well as increased (patient) traffic and whether it has been addressed in any environmental impact statement.
• There is concern that the building may not meet the parking requirements without the site lease agreement. Mrs. Swanson stated that she brought this matter up to the Building Inspector in Mt. Pleasant who said that he is aware of the parking situation, has reservations about it and will address it after the lease is pinned down.
• With regard to compliance with the Americans with Disabilities Act, Mr. Berman stated that it should be the landlord’s responsibility to make any necessary changes. Mr. Herz stated that he was not sure he agrees with Mr. Berman’s position in that the building doesn’t require ADA be met, the use of the building does.
• Mrs. LaMotte questioned whether "as built" plans really exist. Mrs. Swanson stated that the Mt. Pleasant Planning Department does not have them. Mr. Galef stated that they have been told that such plans have been submitted. Mrs. LaMotte questioned why the Town and the County both say they don’t have them. Mr. Herz stated that the bank should have them.
• Mr. Darcy asked Mr. Herz what he thought of a 20 year lease with no option to buy. Mr. Herz stated that the County does have the option to buy via the power of condemnation. He stated that it is uncommon to have such a long term lease with a credit worthy tenant where the tenant has so little control.
• Mrs. LaMotte suggested that the Administration has indicated a willingness to renegotiate some points in the lease, therefore the Committee should come up with a list of proposed changes to submit. She stated that she believes that the BOL is at a point where it would like to support Commissioner Stolzenberg and help get the doctors into the building and therefore should come up with a list of proposed changes that would bring everyone closer to that point. Mrs. Swanson stated that the Board is not and should not be a part of the negotiations. Mr. Oros stated that this particular deal is not satisfactory and it should be voted down with a resolution attached indicating the Board’s concerns. Mrs. Swanson stated that she does not want to be put in a position where the BOL does this because the Administration needs it as was done with the parking garage and then regret it later. Mr. Delfino stated that he did not feel the Board should give any kind of list, in fact he felt it would be better to start from scratch.

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• Mr. Galef stated that the problem WCMC faces is that there is not a lot of time or options. The C.E. will be moving departments out of the building at the end of the lease. He stressed his concern that the public perception of this could be difficult on the Medical Center as it could be perceived as a rejection of WCMC. WCMC could be severely endangered by this.
• Mr. Young stated that the Committee and the BOL have to come to an understanding, sensitivity and concern vs. a business deal. This matter needs to be brought to closure. The Charter says nothing about being negotiators. This is just a bad business deal.
• Mrs. Swanson stated that she would like to do a Committee Report stating why the Committee can’t support this lease as it is. This doesn’t diminish the fact that we know WCMC needs space for the doctors. Mr. Young stated that in his opinion the Committee Report should specify how terrible the deal is and let them know that the intelligence of the Board is insulted if they expect them to believe that this is the best deal they could come up with. Mrs. LaMotte stated that she felt it would be more constructive to give a list of specific recommendation. Mr. Oros stated that he was not sure that the Board should tip its hand by giving a list. He said that he was not sure that twelve people would be willing to sign off on such a list. He stated that the Board should not micro-manage. The Administration has been sitting in on the B & A meetings and knows the general feeling of the Board on this lease. There is one lease to act on, it should be voted down and then let the Administration and the landlord come up with another more acceptable lease.

• At 11:30 a.m. Co-Chair Swanson called for a half-hour recess for Gary Kriss to draft a Committee Report..
• At 12:05 p.m. Co-Chair Swanson reconvened the meeting.

• The Committee reviewed the draft Committee Report. Mr. Darcy asked if the Board’s concerns should be stated in there or if that will be perceived as getting involved in the negotiation phase. Mrs. Bronz stated that she agreed that the lease should be revisited but that the Board’s statement in the Committee Report should be as brief as possible. Mr. Oros stated that he did not want to get involved with making lists. Mrs. LaMotte reminded the Committee of the $4.5 million penalty (which will come out of fund balance) facing the County.

• Mr. Young requested the Committee go into Executive Session to discuss a personnel matter. On motion of Legislator Young, seconded by Legislator Delfino, the motion to go into Executive Session at 11:18 a.m. was carried unanimously.

• On motion of Legislator Young, seconded by Legislator Swanson, the motion to come out of Executive Session at 11:21 a.m. was carried unanimously.

• At 12:25 Co-Chair Swanson recessed the meeting to make ministerial changes on the Committee Report. The meeting was reconvened at 12:30 p.m.

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On motion of Legislator Darcy, seconded by Legislator Young, the Committee Report (Pep’e Fareri Lease Agreement), as amended, was approved by a vote of 5-0 with Legislator LaMotte signing "Without Prejudice".

Co-Chair Swanson assured the Committee that this contract (exclusive of elected officials and fixed term managers) is in complete agreement with the Teamsters and CSEA contracts. She further stated that if there was any problem to be found with it she would recommit it on the floor of the Board.

On motion of Legislator Delfino, seconded by Legislator LaMotte, the motion to approve this item was carried by a vote of 5-0.

There being no further items for discussion, on motion of Legislator Darcy, seconded by Legislator Young, the meeting was adjourned at 12:45 p.m.