Not too long ago, State Senator and chairman of the Committee on Judiciary, Brad Hoylman-Sigal, despatched a letter to the New York State Inspector Basic Lucy Lang, asking her to analyze whether or not or not the Dormitory Authority of the State of New York (DASNY) bought bonds from Yeshiva College in error. The senator asserted that YU misrepresented itself to DASNY to be able to safe the bond financing. 

A big quantity of background concerning YU’s relationship with DASNY might be discovered within the many publicly obtainable DASNY and YU paperwork that handle this. Drawing from the official bond agreements, the DASNY board assembly minutes, YU’s monetary audits and different publicly obtainable DASNY paperwork, we will start to grasp the background of what’s at the moment occurring. We’ll first briefly handle what DASNY is, then transfer on to summarizing the historical past of YU’s relationship with DASNY earlier than remarking on some tangentially associated information that have been reported within the audits. 

The Dormitory Authority of the State of New York has a considerably deceptive title, as most of its present actions have little to do with dormitories. Slightly, DASNY funds development tasks inside New York State for municipal, healthcare and academic amenities. DASNY gives the funding by buying bonds from the group doing the development. As soon as the bonds mature, the company that acquired the financing repays the bonds with curiosity. DASNY works with each private and non-private firms to help them in paying for the development and upkeep of amenities. The Dormitory Authority will get its title from its unique objective within the Nineteen Forties, when it was tasked with developing dormitory amenities at instructor’s faculties all through New York State. Over time, the New York State authorities expanded DASNY to finance municipal, healthcare and academic amenities broadly.

Yeshiva College, being an academic company, is eligible for DASNY financing for any of its amenities. Yeshiva has taken full benefit of DASNY’s providers over the past 30 years. Already in 1994, Yeshiva offered $31 million price of bonds to finance the development of the constructing positioned at 1859 Eastchester Street for Albert Einstein Faculty of Medication. In 1998, YU acquired one other $30 million to renovate the constructing at 55 Fifth Ave. for the Benjamin N. Cardozo Faculty of Legislation. 

YU acquired one other $65 million in 2001, a 3rd of which was used to refinance the 1994 bonds and the remaining was divided up amongst many purchases of latest properties and renovations of present buildings. Many of the funds went to buying and renovating dormitories and classroom area on the Beren Campus. The Nineties and early 2000s noticed a terrific enlargement of amenities on the Beren Campus together with the acquisition of the Schottenstein Residence Corridor (1995), thirty fifth Road Residence Corridor (1997), 215 Lexington Ave. (1999) and thirty sixth Road Residence Corridor (2000). All the above are listed as having been at the least partially financed by means of the 2001 sequence DASNY bonds. Renovations in 245 Lexington and 253 Lexington have been additionally financed by means of the DASNY bonds. Then, in 2004, YU acquired one other $100 million from DASNY. 90 p.c of this funding went to financing the development of the Michael F. Worth Heart for Genetic and Translational Medication at AECOM positioned at 1301 Morris Park Ave. (The debt from the 2004 bonds was transferred to the newly unbiased Einstein in 2016.)

YU as soon as once more acquired DASNY cash in 2009, a complete of $140 million. About $16.8 million from these bonds went to refinancing the 1998 sequence bonds. The remainder of the cash was divided up between a number of tasks that lined all of YU’s Resnick, Wilf and Beren campuses. A big portion of the cash went to financing the development of the Glueck Heart for Jewish Research at 515 West 185th St., which started development in 2006 and opened in fall 2009. One other portion additional contributed in the direction of the price of constructing the Michael F. Worth Heart for Genetic and Translational Medication at AECOM. Some $15 million went to upgrading IT and wi-fi web on the Beren and Wilf campuses. In 2011, YU offered one other sequence of bonds to DASNY, price $90 million. $46 million went to refinancing the 2001 bonds. The opposite $44 million was allotted for financing upkeep on YU’s Resnick, Wilf and Beren campuses.

YU’s most up-to-date DASNY bonds have been issued in 2022, totaling just below $153 million. Over $131 million of the bonds went to refinancing the remaining debt of the 2011 and 2009 bonds. The remaining $20 million are designated for renovations to enhance vitality effectivity in buildings on each the Wilf and Beren campuses. These enhancements contain upgrading the heating and cooling methods in addition to modernizing the elevators within the following buildings: Belfer Corridor, Furst Corridor (Belz Constructing), Stanton Corridor (245 Lexington), Schottenstein Residence Corridor, 215 Lexington and Brookdale Residence Corridor. There may be nothing about these bonds that seems out of the bizarre, and YU has been capable of work with DASNY to finance development and upkeep for nearly 30 years. 

This quiet relationship has been introduced into public discourse by the initiation of State Senator Brad Hoylman-Sigal’s investigation into bonds. In response to YU’s present litigation with the YU Satisfaction Alliance, during which YU claims to be a spiritual establishment, Hoylman-Sigal famous that YU was recognized as a “nonsectarian” establishment within the 2009 and 2011 bond agreements. The implications of this potential contradiction might imply that DASNY issued these bonds in error, for the reason that settlement might have misidentified YU’s nature. It’s price noting that the phrase “nonsectarian” was unnoticed of the clause figuring out YU within the 2022 bond settlement, doubtlessly signaling a shift in YU’s authorized self-identification. The outcomes of Hoylman-Sigal’s investigation stay to be seen.

The DASNY bond agreements include a lot details about YU’s funds past the small print of the bonds which can be the first objective of the settlement. Any get together getting into right into a bond settlement with DASNY has to reveal particulars about its funds to show that it is going to be capable of repay the bonds as soon as they mature. There are just a few particulars of curiosity that we seen whereas studying by means of these paperwork. 

The 2022 bond settlement affords some particulars about how YU has responded to among the lawsuits it’s at the moment litigating. In a piece detailing liabilities born out of litigation, YU assured DASNY that, “There isn’t any materials pending litigation in opposition to the College at this date for which sufficient insurance coverage protection doesn’t exist or which might have a fabric hostile impact on the monetary assets of the College.” This part went on to particularly reference the Youngster Victims Act instances with out mentioning every other litigation that the college was going through as of June 2022. It’s doable that this insurance coverage data is outdated because it seems to have been taken instantly from the 2021 PWC audit, which solely recorded monetary particulars for the fiscal years ending on June 30, 2021 and June 30, 2020. As such we can not draw any conclusions about how YU is responding to more moderen litigation from this bond settlement.

Additional, the DASNY bond agreements lend a glimpse into how Yeshiva College has been utilizing its belongings to stabilize its funds. The 2022 bond settlement and the hooked up PWC monetary audits reveal an association that YU entered in 2017 to consolidate a few of its debt. On April 21, 2017, YU transferred 5 of its Manhattan properties to a holding firm known as Y Properties Holdings LLC. These 5 properties are the Gottesman Library, Belfer Corridor, 253 Lexington, 245 Lexington and 215 Lexington. On the identical day, Y Properties, which is wholly owned by YU, entered right into a 15 yr, $140 million mortgage with Argentic Actual Property Finance LLC on its 5 properties that refinanced $137 million of pre-existing debt. The primary ten years of the mortgage have comparatively small annual funds that balloon in 2027 to be able to repay the remaining $132 million principal. YU has expressed an intention to refinance the mortgage earlier than 2027, which it’s entitled to do at any time earlier than 2032. 

Take a look at https://lazymasmid.blogspot.com/2023/05/yu-dasny-bonds-bibliography.html for a bibliography of our sources.

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Photograph Caption: The DASNY headquarters in Albany

Photograph Credit score: Matt H. Wade / Wikimedia Commons