the CounCil

Christine C. Quinn Speaker

the City of new york City hall new york, ny 10007

of

Telephone 212-788-7210

February 13, 2013

Seth Pinsky President New York City Economic Development Corporation 110 William Street New York, NY 10038 Dear Mr. Pinsky: We write to express our strong recommendation that the New York City Economic Development Corporation (NYCEDC) renegotiate its lease agreement (Agreement) with the Marriott Marquis Hotel (Marriott). The Comptrollers February 11, 2013, Audit Report on the Compliance of Marriott Marquis with Its City Lease Agreement (Audit) makes several assertions that are of concern. In particular, the Audit finds that the NYCEDCs 1998 amendments to the Agreement may have been based on an inaccurate analysis of the Agreement and similarly inaccurate calculations about how the adopted changes would affect the amount of revenue that the City receives pursuant to the Agreement. According to the Audit, the 1998 lease amendments have cost the City over $170 million in reduced rent payments and could cost the City tens of millions of dollars more should Marriott choose to buy the property under the current terms. If Marriott were to purchase the property under the current terms of the Agreement, the City stands to lose out on $173.1 million from such a sale. At a time when we face difficult choices between raising taxes or making cuts to public services like education, it is disheartening to learn that the City gave away hundreds of millions of dollars to a luxury hotel in Times Square. Worse still, the City gave away taxpayer dollars to the only large hotel in the City where, according to reports, workers lack access to quality, affordable health care and protections for immigrants. As we have made clear in the past, employers who engage in these types of practices are not worthy of our city.

We recognize that there are situations where the City can and should promote economic development through subsidized lease arrangements, but there was no such justification for the amendments made in 1998. At that point, Times Square was booming and the Marriott was situated on one of the most desirable pieces of hotel real estate in the country. Clearly, you were not responsible for a lease amendment made over a decade before you assumed responsibility for the agency. The question now is, what can we do to make this right? The Comptrollers report notes that, despite having a very favorable lease, Marriott appears to have breached the agreement by failing to retain the necessary documentation of its revenue receipts. If the lease is found to have been breached, we ask that you immediately renegotiate an agreement that is fair, equitable and in the best interests of the public. We appreciate your attention to this matter and look forward to working with you to resolve the issue in an effective and timely manner. Sincerely,

Christine C. Quinn Speaker

Margaret Chin Council Member

Jessica S. Lappin Council Member

Julissa Ferreras Council Member

Leroy G. Comrie Council Member

Jumaane D. Williams Council Member

Annabel Palma Council Member

Helen Diane Foster Council Member

Letitia James Council Member

Peter Koo Council Member

Rosie Mendez Council Member

Elizabeth Crowley Council Member

Michael Nelson Council Member

Robert Jackson Council Member

Daniel J. Halloran Council Member

Brad Lander Council Member

Daniel Dromm Council Member

Mark Weprin Council Member

Ydanis Rodriguez Council Member

Albert Vann Council Member

M. C. Arroyo Council Member

Diana Reyna Council Member

David Greenfield Council Member

Lewis A. Fidler Council Member

Inez Dickens Council Member

Daniel R. Garodnick Council Member

G. Oliver Koppell Council Member

Stephen Levin Council Member

Mathieu Eugene Council Member

Andy King Council Member

Gale A. Brewer Council Member

Jim Gennaro Council Member

Jimmy Van Bramer Council Member

James Vacca Council Member

Darlene Mealy Council Member

Vincent J. Gentile Council Member

Melissa Mark-Viverito Council Member

Domenic M. Recchia, Jr. Council Member

Erik Martin-Dilan Council Member

Deborah Rose Council Member