The New York State Comptroller reports in an audit that Massena G&CC, St. Lawrence Yacht Club, and Twin Brooks Golf Course are each paying less than 10 percent of their assessed fair market rental value.
An audit by New York State Comptroller Tom DiNapoli is claiming the New York Power Authority is leasing property below market value to two golf courses, a private yacht club and a private university in St. Lawrence County and not always collecting the rent, the New York-based Syracuse.com reported.
Power authority officials said the leases are part of the deal for land management in the areas where they operate power plants. NYPA said it would enhance its real estate portfolio management, but took issue with some of DiNapoli’s findings, Syracuse.com reported.
DiNapoli’s report said NYPA was leasing the following properties for less than 10 percent of the assessed fair market rental value:
- The Massena Golf and Country Club, in St. Lawrence County, is leasing land assessed at $1.8 million for an annual rent of $2,000. A fair price would be $180,000, auditors said.
- The St. Lawrence Yacht Club leased property assessed at $180,000 for $2,700 a year. The club is not open to the public. Instead of paying rent, since 2010, the tenant was allowed to make improvements, which included replacing a dock and a shed and purchasing a woodstove. A proper rent would be $18,000 a year, auditors said.
- St. Lawrence University signed a lease for $1, and didn’t pay it, on a boat house assessed for $100,000. A better price would be $10,000 a year, auditors said.
- The Twin Brooks Golf Course, in Waddington, is paying no rent on a property assessed for $123,000. The lease requires a $200-a-year payment, but it has been waived since the 1990s.
The public authority could be earning an additional $214,000 a year, auditors estimated, Syracuse.com reported.
NYPA is a state-owned public authority that runs hydroelectric and gas-powered energy plants across New York. It owns 48,941 acres of property associated with 12 power plants, along with administrative offices in White Plains, the report said.
It is a state-owned public authority, but does not use taxpayer revenue. It raises money by selling low-cost electricity. It contributes about $90 million a year to the state’s general fund for energy and economic development spending, Syracuse.com reported.
“The unusual nature of these deals makes it critical that NYPA fully document and disclose the nature and justification for them,” DiNapoli said in a prepared statement. “NYPA hasn’t shown that these tenants are the only ones that could provide required recreational use of these properties.”
The comptroller said the power authority should try to advertise the space to others when the leases expire to be sure they are the only possible tenants. The report also said the authority is not following the law by informing the governor or the legislature when it enters into a below-market lease on a property valued at more than $15,000, Syracuse.com reported.
Gil Quiniones, president and chief executive officer of NYPA, wrote in a response to DiNapoli’s report that the leases predate the law that requires disclosure to the governor and the legislature. He also said the leaseholders are compliant with their obligations, Syracuse.com reported.
At the time the leases were negotiated, they represented fair market conditions and the requirements NYPA has as part of its mandate from the Federal Energy Regulatory Commission, Quiniones said.
The federal operating license for NYPA’s St. Lawrence-FDR Hydroelectric Power Plant includes providing recreational opportunities to mitigate the disruption of hosting power plants in the community, Syracuse.com reported.