Glen Cove Mayor Reginald Spinello has proposed creating a new local development corporation to issue bonds on behalf of nonprofits. The city would not be liable for the debt.
The City Council is expected to vote on the creation of the Glen Cove Local Economic Assistance Corporation at its Tuesday meeting. The corporation would be formed as a nonprofit with a five-member board, initially taken from the city’s Industrial Development Agency.
“These things are set up to promote and conduct economic development activity in the city,” Spinello said. “It’s a vehicle for assisting with financing for various purposes, it sort of complements the IDA.”
Its first bond issuance would be for the Regency at Glen Cove, an assisted living facility on School Street. The bonds are expected to be between $10 million and $12 million. The Regency, which has struggled financially in recent years, plans to expand with a new Alzheimer’s ward and to restructure its debt which was originally issued by the city IDA in 1992.
In the past, local industrial development agencies regularly issued bonds on behalf of nonprofits to build civic facilities but that authority expired in 2008. Many municipalities across New York have since created local development corporations to fulfill that role.
The state Authorities Budget Office raised concerns about the proliferation of local development corporations in a report this year in part because, depending on how they are formed, they may not be subject to state open meetings law or Freedom of Information Law disclosure.