Newsday reported last week that Solomon Schechter has been paying $400,000 in annual net rent on the school building it currently leases in Glen Cove from that city. This for a smaller school building without ball fields in an inconvenient location on a property that has a market value of less than 60 percent of the Cross Street school property in Williston Park, to which the school plans to move in July, at a fraction of the rent, courtesy of Dr. Nagler.
In fact, reviewing the actual lease, it appears the net rent payable to Glen Cove is $482,500 for the current year, and would have been $505,465 next year, if not for the proposed move.
This is two and a half times as much as the $200,000 rent Dr. Nagler is proposing for Cross Street, a bigger school in a better location with on-site fields.
In fact, the discrepancy between the two leases is even greater than the rent numbers show. This is because Solomon took the Glen Cove property “As Is” on a true net lease, wherein it has been responsible for all costs on the property from soup to nuts, including utilities, trash, system repairs, telecom, insurance etc. Everything.
Therefore, the rent amount it pays Glen Cove is a true net rent. This unlike the proposed Cross Street lease which, at last word, has the school district taxpayers picking up the tab for many of the costs associated with the building, including maintenance, trash, landscaping, IT system support/system management, snow removal and sanding costs, to name just some.
Hence the $200,000 in annual rent, which is already less than 40 percent of market value, based on the Glen Cove lease, is not even a net amount. The true net rent is less. How much less we’ll have to wait to find out. This as Dr. Nagler has stated that he won’t release the lease to the public until after the board has voted to accept it. Another strong indication that he understands it won’t withstand close scrutiny.
As bad as the rent comparisons are, there’s more. Because in Glen Cove, in addition to paying the city a much higher rent than Dr. Nagler proposes, and being responsible for all costs associated with the property, again as distinguished from Dr. Nagler’s lease, Solomon was additionally obligated, during the first six years of the lease, i.e., 2002-2008, to expend $2,300,000.00 in capital improvements on the property.
This averages to $380,000 annually on a pro-rated basis. In addition to the rent. So the total benefit to Glen Cove was the rent amount plus the capital improvement expenditures. Since the rent amount commenced at $350,000 in 2003 and escalated from there, this means that Glen Cove was realizing, on average, in net rent and capital improvement expenditures, more than $725,000 annually for that period.
Compare this to Dr. Nagler’s proposed lease, which had the taxpayers paying for the capital improvements that are going to be made to benefit Solomon Schechter at Cross Street. While he claims this clause has been changed, it appears that this is only partially true, at best. This as Dr. Nagler has said that Solomon Schechter will now pay for the work that is “bid out.”
But not all the work is being bid. In fact, Dr. Nagler advised at the March 16 board meeting that much of the Cross Street work was going to be done by Mineola school district staff in-house.
So district taxpayers, including those in Williston Park who are going to be adversely affected, are still going to be subsidizing at least some of the proposed capital work at Cross Street. Moreover, the district, not Solomon Schechter, appears to be picking up all soft costs, i.e., architect fees, attorney fees, traffic study costs, etc, another significant item of expense.
Hence Dr. Nagler, while claiming to inform, continues to deceive. Yet he still touts his lease as a good deal for the taxpayers, despite all evidence to the contrary. Who is he kidding.
In fact, the numbers confirm what some of us have been saying all along. The proposed Cross Street lease is a sweetheart deal. It doesn’t obtain fair market value for the taxpayers, as required by law. Not even close.
It doesn’t appear to be the product of an arms length transaction between competent parties. In fact, the leasing of Cross Street appears to have little to do with raising revenue for the school district ($200,000 is just .25 of 1 percent of the budget) and everything to do with obtaining a central Nassau location for Solomon Schechter, at a bargain basement price.
This appears to have been the intent all along. That’s why the property was never advertised for lease or sale, was never marketed and why no true market value was obtained. Because doing any of those things would have jeopardized the ability of those responsible for this fiasco from delivering Cross Street to Solomon Schechter, under extremely favorable terms (such as the two year termination clause), which seems to have been the end game all along.
This deal appears to be the product of either an undisclosed relationship between someone on the Solomon Schechter side and someone on the Mineola side or of gross incompetence on the part of Mineola personnel. I’m guessing the former. But it’s a guess. I could be wrong. It might be the latter.
Given these figures, the lease should be withdrawn and those responsible for what has gone on, including Hornberger and Hale, the two trustees running for re-election, voted out of office.
The budget should be voted down as well. If the district can afford this giveaway, it doesn’t need any more money from the taxpayers. It obviously has more than enough already.
John O’Kelly
East Williston
