Some Much for Bramson Lectures on “Process”; Good Profit to Proceed Without MOU

Written By: Robert Cox

Since August, Mayor Noam Bramson has defended his one-sided approach to the Good Profit proposal for the New Rochelle Armory on the grounds that there was some sort of sanctity to “process”, referring to the RFP process for the adaptive reuse of the New Rochelle Armory. At the last Citizens to be Heard meeting in October, the Mayor lectured the audience for 15 minutes on the supposed sanctity of process to explain why he would not allow the proponents of the Veterans Performing Arts Center to make a presentation in September before the City Council made an “unofficial” vote to move forward with Good Profit. As late as November 1st, the Mayor told the City Council that Good Profit was unable to move forward with an MOU because email was down to Hurricane Sandy.

Tonight, the Mayor is proposing to move forward with Good Profit on the basis of a so-called “Letter of Agreement”.

UPDATE: The Council held off consideration of the Good Profit deal until next week.

This raises a number of questions:

  • What is the legal difference between an MOU and an LOA?
  • Under the Echo Bay MOU, Forest City was required to have $75,000 in escrow. Will Good Profit be required to place funds in escrow?
  • Is there some reason that either the City or Good Profit declined to negotiate an MOU? If so, what is the reason?
  • Was a Letter of Agreement part of the RFP process or is this something new?
  • Is the LOA a precursor to an MOU? If so, when?

Talk of the Sound has been reliably informed that the real issue here is that Good Profit does not have the money to put into escrow. Further, that as an excuse Good Profit is claiming that they are not putting up the money because the City does not have the authority to make the Armory available for the purpose Good Profit intends. This goes back to the Home Rule issue here the New York State legislature must alter the terms of the deed restrictions.

The letter was not provided to City Council until just minutes before the Good Profit deal was taken up for discussion by City Council. Council Member Shari Rackman noted that the Letter of Agreement stated, in item #8, that the escrow fund would not be established until an MOU was executed. Bramson said that the resolution would be updated to reflect an LOA not an MOU.

The letter follows:

1. A 180-day period of due diligence is established to allow (1) Good Profit to review, study and consider policy and financial implications with respect to the development of the New Rochelle Armory: (2) Good Profit and Forest City Residential to consult on the development of a site plan for the project: and (3) the City of New Rochelle and GoodProfit to define the terms of any public-private partnership aimed at successfully pursuing and completing the project.

2. Good Profit shall conduct this review at its own risk. The City agrees that it will not enter into any negotiation, discussion, or agreement with any other firm, person or other entity with respect to the New Rochelle Armory.

3. Good Profit agrees to defend. indemnify and hold harmless the City, its agents, servants and employees from and against any and all claims by whomsoever asserted which arise out of Good Profit’s access to the New Rochelle Armory property or any action taken in connection with its due diligence activities.

4. Prior to the conclusion of the due diligence period, Good Profit shall submit the following documents to the City for its review:

Detailed site plan
Analysis of public costs and benefits
Detailed financing program

5. The City shall work in concern with Good Profit to seek any approvals from New York State necessary to facilitate the project.

6. The City shall determine the degree of environmental review necessary to examine and approve the project.

7. The City shall pursue in good faith and in a timely fashion all local approvals necessary to facilitate the project.

8. An escrow agreement shall be established whereby Good Profit will fund the City’s expenses associated with any necessary consultants’ review of the Project on behalf of the City. Such fund will initially be established at $50,000. upon execution of the MOU LOI and replenished if it drops below S25,000.

9. The City shall grant Good Profit a right of access for the purposes of environmental testing, engineering and design or other purpose related thereto.
10. The Agreement shall expire one hundred eighty (180) days from execution.

The argument was made that there was really no difference between a Letter of Agreement or Memorandum of Understanding as if it were a matter of semantics. This is not the case but, so far, the Corporation Counsel, has not given a full explanation of why a Letter of Agreement was put forward rather than an MOU when at the previous Council meeting the Mayor was still talking about an MOU. There is at least one major difference — there is no environmental impact statement required in the LOA and therefore no DEIS clock ticking.