Audit of Astoria Studios reveals unpaid city bills

In a recent audit by New York City Comptroller William C. Thompson, Jr., it was found that Astoria Studio Limited Partnership II under-reported their income and did not pay water or sewer charges for over a decade.
In September 1982, Astoria Studios Inc., affiliated with Kaufman Astoria Studios Inc., entered into a lease agreement with the City’s Public Development Corporation, now known as the Economic Development Corporation (EDC) to restore, expand, and manage motion picture and television studios in Astoria. The EDC is responsible for overseeing the lease agreement.
Most of the operating revenue comes from leasing offices and stages at Astoria Studios to film industries and commercial businesses. According to the report, the auditors found that while Astoria Studios Inc. “paid all rents due in a timely manner,” they under-reported its net income to the city by $591,704.
They also failed to pay water and sewer charges dating back to 1995. Water and sewer payments are a requirement of the lease agreement. The failure, according to the report, was attributed to Astoria Studios failure to contact the DEP about not receiving water and sewer bills.
The DEP immediately inspected the meters and adjusted the billing information, billing Astoria Studios for $135,237 for water and sewer use between April 2002 and April 2006.
Since New York Water Board rules prohibit the DEP from billing customers for water and sewer use more than four years old, Astoria Studios will not be billed for use between 1995 to April 2002, Thompson said.
Also going against the lease agreement, Astoria Studios did not name New York City and EDC as “additional insured entities under its excess liability policy,” according to the report. Astoria Studios also did not submit audited financial statements to the EDC in a timely manner.
Thompson recommended that Astoria Studios, among other actions, accurately calculate net income and additional rent payments in accordance with the terms of the lease agreement and to maintain documentation to support allocation of administration expenses for Kaufman Astoria Studios.
Astoria Studios Inc. does not have to pay any extra money other than what was owed for under-reporting income, according to Ebony Meeks at the comptroller’s office.
Deborah Green Taffet, spokesperson for Astoria Studios, said that the results of the 11-month audit revealed that, “the studio paid its water bill once the water bill was received from Department of Environmental Protection,” and that, “to date,” the Studio does not owe New York City any money.
Astoria Studios, she said, has responded to the recommendations in the audit, and does not owe the city any money.
She also explained that the audit also “pointed out an error in the Calculation of Additional Rent,” and that it has been confirmed that the studio does not owe the city any rent.