$9 in Public Use Million Held by EDC
Sept 26, 2011
By Neal Tepel
City Comptroller John C. Liu today announced that an audit of the Economic Development Corporation (EDC) determined it has left millions of dollars untouched that were intended for public benefit projects. The audit identified $9.3 million in so-called Public Purpose Funds, managed by the EDC, in accounts that have seen no activity for years. The EDC received the money from private developers in exchange for tax breaks or other benefits.
The EDC received $8.9 million as part of a 1992 agreement in exchange for financial breaks for the Riverside South residential development led by Donald Trump. This Public Purpose Fund, earmarked from the beginning to benefit the Harlem River Rail Yard in the Bronx, was fully funded by 2005. Despite having 19 years to come up with a plan to use the money, the EDC has not disbursed any of it. The audit recommends the EDC find a way to use the money to benefit the Bronx and not wait another 19 years to do so.
“It makes little sense that millions intended for economic development remain unused for so long, especially in the Bronx where jobs are greatly needed,” Comptroller Liu said. “If the EDC can’t figure out how to put the capital to work then at least return the money to the City treasury.”
The audit also discovered that EDC failed to collect $725,720 from energy company Keyspan, which was supposed to benefit the community near the company’s Long Island City power plant that went online in May 2004.
In addition to the Harlem River Rail Yard, the audit identified three additional aging Public Purpose Funds that have remained unused since 2005:
