202) Because the HYIC bonds will be repaid out of tax revenue that otherwise would go to the City's general fund, the Far West Side's PILOT financing has the potential to draw revenue away from City schools.
203) The Mayor unilaterally authorized the IDA to transfer the PILOTs to the HYIC.
Although the HYIC will incur debt service costs on the PILOT debt beginning in 2005, the Far West Side development is not expected to generate sufficient revenue to cover these costs until approximately 2018.
217) The Office of the State Comptroller warned that the HYIC debt "may be perceived by the financial community as a moral obligation of the City of New York and could adversely affect the city's credit rating.
231) Inaccurate projections could leave the HYIC with insufficient revenue to service and repay the project debt, which likely would prompt the City to raise taxes or take money from its general fund to cover any shortfall.
235) And even if the project generates revenue in excess of what is needed to service the debt, the excess may not be available to pay for these facilities, because the HYIC is not obligated to transfer the excess to the City's general fund.
Mayor Bloomberg unilaterally determined that the HYIC debt will be repaid from PILOT revenue rather than from the City's budget.
Furthermore, as is often the case with TIF agencies, (240) the HYIC officials will be appointed rather than elected by voters.
244) In contrast, the HYIC plans to issue almost $3 billion in TIF-like debt, which is ten times the size of the largest preexisting TIF bond issue on record.
The HYIC was created pursuant to section 1411 of New York's Not-for-Profit Corporation Law, which authorizes the creation of local development corporations.
Prior to conversion, all project revenues must be used to pay bond interest and HYIC
expenses and then, if any excess revenues are available after interest has been retained for the subsequent fiscal year, to pay down principal once bonds are callable.