Comptroller John Liu believes that the city’s Economic Development Corporation (EDC) owes the city $125 million in funds, and he is calling on the agency to repay that money immediately – a claim EDC refutes.
Liu, whose office released a more than a year-long audit of EDC on Wednesday, April 28, said that EDC took money on behalf of the city on behalf of the 42nd Street Project, a dormant public purpose fund and the sale of city assets and then inappropriately kept the funds.
“EDC should pay the money to the city right now,” Liu said during a conference call. “This is money we clearly need in the time of very difficult budget situations.”
The audit detailed that EDC should have to repay more than $98 million in payments it collected from the 42nd Street Project, $10.7 million in a dormant Public Purpose Fund and $16.5 million in net proceeds from the special sales of city assets.
Included in those city assets is nearly $7.9 million from the sale of the Queens Family Courthouse in 2007, even though its quarterly financial plans classified the transaction as a special sale of a city asset and indicated that the proceeds would be transferred to the city.
“While, of course, NYCEDC will continue to work with the city to refine and enhance its existing processes, it believes that these processes do generally classify its revenue amounts due to the city properly and are generally appropriately transparent,” EDC said in a statement in response to the audit.
Liu believes that the audit, which listed a number of other recommendations that EDC should consider – some the agency agreed with and some they rejected – shows that EDC should repay the $125 million, which would allow the city to use the money to plug some of the more than $4 billion budget gap.
“We will use every authority we have in this office, and I would imagine the Mayor would do that same thing to get the $125 million,” Liu said.
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