(203) The Mayor unilaterally authorized the IDA to transfer the PILOTs to the HYIC. This violates the City Charter, which requires the Mayor to seek legislative approval before appropriating public funds.
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.
Even though bondholders will have no legal claim against the City, (215) the rating agencies may regard the HYIC's PILOT debt as City debt.
(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.
(175.) 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.