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Queens Chronicle

FMCP’s incredible shrinking trust fund

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Posted: Thursday, March 28, 2013 10:30 am | Updated: 5:16 am, Wed Dec 24, 2014.

During contentious votes on the United States Tennis Association’s proposed expansion in Flushing Meadows Corona Park, five out of six community boards suggested the creation of a multimillion-dollar trust fund for the park in their recommendations.

A fund of that size would generate some degree of growth and interest, which would be used to fund annual improvements and upkeep in the park. Or so the thinking goes.

But that not-so-novel means of funding has been tried before in the park in the form of an $8 million trust created with the USTA’s first expansion. The result? Nearly $7 million in usable assets bled dry by a laser-like focus on one facility within the park, rather than the entirety of Flushing Meadows as originally intended 15 years ago.

Now some are worried they’ll see a repeat if a final agreement between the USTA and the city is structured similarly to the first deal.

At its peak, the fund grew by over $700,000 annually. Difficult financial markets and rock-bottom interest rates began stymieing that growth in 2008. Toss in over $2 million spent annually on maintaining a new $66.3 million pool and ice rink, and the trust’s usable assets had dwindled to around $177,000 by the end of 2012, from a peak of $6.8 million in 2008. (As part of the original deal, the principal $8 million cannot be touched for park expenditures.)

A nonprofit called the Flushing Meadows Corona Park Improvement Fund was incorporated to manage the money. It actually sat largely untouched for a decade, accumulating interest. The interest garnered from the $8 million then almost entirely disappeared in the course of four years. How?

Turns out the city’s most expensive facility within a park — the pool/rink — is expensive to maintain as well. It has received $9.28 million in funding from the trust fund’s usable monies since opening in February 2008.

The fund was established in 1998 for “benefitting, improving and enhancing Flushing Meadows Corona Park and for the improvement and development of the park.”

The directors of the fund, as stated by the certificate of incorporation, are the Queens borough president, city Parks Department commissioner and city Comptroller. The principal outlay funded by the USTA would remain untouched as part of the agreement.

Both the Borough President’s Office and Parks Department did not respond to questions as of printing on who decides when to spend the money and how. The comptroller’s office said it essentially serves as an accountant.

“The comptroller’s role is limited to fiscal custodian and investment advisor,” said Scott Sieber, a spokesman for Comptroller John Liu.

The fund took on a semi-mythical status during the most recent community board hearings regarding the USTA’s planned expansion. In some respects, it served as a model for the boards, with Community Board 7 Vice Chairman Chuck Apelian first introducing a stipulation for a $15 million fund for the park, along with $300,000 in annual upkeep funding provided by the USTA.

“You always look back and you say in retrospect it should have been spent differently,” Apelian said of the original fund, adding he did not have suggestions for how any potential new fund would be set up.

The prospect of a similar deal appears in the offing, as the USTA’s plan navigates the Uniform Land Use Review Procedure. Councilwoman Julissa Ferreras (D-East Elmhurst), whose district includes the tennis center, has called for establishing such a fund as part of any deal.

Yet some are leery the fund could be mismanaged or misused or offer the city a reason to bypass funding the park itself.

Some explored the idea of using the $15 million entirely on improvements, then using the annual payments by the USTA to maintain those upgrades.

“To me the $15 million would be better spent now,” said Community Board 3 member Donovan Finn, who is also with the Fairness Coalition of Queens, which opposes a series of projects being slated for the park. “I’m not an accountant but spend it now. Spend it on projects we need today.”

Yet some see a sustained investment in the park as the key. New Yorkers for Parks has advocated a “public-private partnership,” pointing to Prospect Park and Central Park as models (the FMCP fund wasn’t named as ideal).

A fund overseen by a mix of public employees and local residents is ideal, said NY4P executive director Holly Leicht.

“It’s a system of checks and balances where you want to make sure there’s public oversight,” she said.

Finn took a more practical stance.

“The idealist in me says this all ought to be the city’s responsibility,” he said. “The pragmatist in me says the city isn’t going to do it. I hate making that tradeoff.”

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