The Birch Wathen Lenox School

BUILD NYC RESOURCE CORPORATION
PROJECT COST/BENEFIT ANALYSIS
January 14, 2014
APPLICANT
The Birch Wathen Lenox School
210 East 77th Street
New York, New York 10075
PROJECT LOCATION
The Birch Wathen Lenox School
210 East 77th Street
New York, New York 10075
A. Project Description:
The Birch Wathen Lenox School (the “School”), is a not-for-profit co-educational school for
students in kindergarten through twelfth grade. The School is seeking approval for the
issuing of approximately $8,000,000 in tax-exempt bonds. Proceeds of the bonds will be
used to: (1) refund the New York City Industrial Development Avenue Civic Facility
Revenue Bonds that had a principal balance of $15,750,000 (the “Series 2004 Bonds”) and
(2) pay certain issuance costs.
The proceeds from the Series 2004 Bonds were used to finance (1) the improvement and
equipping of an existing approximately 38,800 square foot building located at 210 East 77th
Street on Manhattan’s Upper East Side, including (a) the construction of an addition to
accommodate a new soundproof gymnasium, (b) the expansion of the rear of the existing
building to house an improved and enlarged auditorium and (c) the expansion of the east and
west sides of the existing building to provide additional air circulation and a fire escape all
for use by the School as classrooms, auditorium and gymnasium space and for other related
facilities and (2) certain costs incidental and related to the issuance of the Series 2004 Bonds.
B. Costs to City (New York City taxes to be exempted):
Mortgage Recording Tax Benefit:
Estimated NYC Forgone Income Tax on Bond
Interest (estimated NPV 15 years @ 6.25%)*:
Total Cost to NYC
$
121,875
26,515
$
148,390
*The exact amount of personal income tax revenue that will be lost as a result of this transaction depends on
factors including (but not limited to) the percentage of bond bought by entities subject to New York City personal
income taxes, the interest income generated from the bonds and the tax rate applied to bond purchasers.
C. Benefit to City (Estimated NYC direct and indirect taxes to be
generated by Company) (estimated NPV 15 years @ 6.25%):
$
9,108,142
Benefits Application Checklist
BENEFITS APPLICATION
Applicant Name: THE BIRCH WATHEN LENOX SCHOOL, INC.
Name of operating company (if different from Applicant):
Operating Company Address: 210 EAST 77TH STREET, NEW YORK, NY 10075
Website Address: bwl.org
EIN #:
NAICS Code: 611110
State and date of incorporation or formation: New York, 2/1991
Qualified to conduct business in NY? x Yes
No
Applicant is (check one of the following, as applicable):
General Partnership
Limited Partnership
Limited Liability Company
Natural Person
Are any securities of Applicant publicly traded?
Yes
C Corporation
x 501(c)(3) Organization
S Corporation
Other: ______
x No
Applicable Financial Assistance (check all that apply)
Please note the following: When Build NYC is the entity providing Financial Assistance, the Project Financial Assistance may be limited to deferral from
mortgage recording taxes and tax-exempt conduit bond financing.
x
Bond Financing
Real Estate Tax Benefits
Sales Tax Waiver
x
Mortgage Recording Tax Deferral
Applicant Contact Information
Name/Title
Company
Address
th
Applicant
Contact Person
Ann Glickman
The Birch Wathen
Lenox School
210 East 77 Street,
New York, NY 10075
Attorney
Jonathan Russo
Pillsbury Winthrop
Shaw Pittman LLP
1540 Broadway, New
York, NY 10036-4039
Accountant
Larry Rozanski
Loeb & Troper
655 Broadway, New
York, NY 10017
Consultant/Other
Paul Lamas
Roosevelt & Cross,
Inc.
55 Broadway, 22nd
floor, New York, NY
10006
1
Email
Phone
Core Application - Project Information
Background
Please provide a brief description of the Applicant’s history and nature of its business, including a description of the industry, competitors and services
offered, on a separate sheet. SEE SCHOOL PROFILE
Proposed Project Activities
Please provide answers to the following four questions on a separate page.
1. Please provide a brief overview of the entire proposed Project. If necessary, break down by tax lot to describe activities at each
Project Location. REFINANCING OF EXISTING BOND
2. Please provide a brief description of how the proposed Project will affect current operations. NOT APPLICABLE
3. Please provide a brief description of renovations/construction of the proposed Project. NOT APPLICABLE
4. Please provide a brief timeline for the entire proposed Project. NOT APPLICABLE
Project Financing
Amounts provided should be aggregates for all Project Locations.
Sources of Funds
(If needed use an additional sheet to indicate all sources and uses)
Uses of Funds
Bond
Proceeds
Commercial
Financing
(Loan 1)
Commercial
Financing
(Loan 2)
Affiliate/
Employee
Loans
Capital
Campaign
Company
Funds
Other
(Identify):
Total Uses
Land & Building
Acquisition
Construction Hard
Costs
Construction Soft
Costs
Fixed Tenant
Improvements
Furnishings &
Equipment
Debt Service
Reserve Fund
Capitalized Interest
Costs of Issuance
150000
315000
465000
Other (explain)
Project Fund
7350000
5835000
13185000
Total Sources
7500000
6150000
13650000
Fees (explain):
Operating Pro Forma (for NYCIDA applicants only)
Please provide an operating pro forma or other financial analysis demonstrating how NYCIDA assistance is needed in order to make the Project feasible.
Sourcing
Please list where machinery, equipment and furnishings will be purchased and what percentage of total machinery, equipment, and furnishings relating to
the Project this will represent: N/A
New York City
% of Total?
New York State (excluding NYC)
% of Total?
United States (excluding NYS & NYC)
% of Total?
Outside United States
% of Total?
x N/A – No equipment is planned to be purchased for this Project
2
Core Application – Proposed Project Packet (1of 2)
Please complete Proposed Project Packet for EACH Project Location
Project Location Detail
Project Location
Project Location # 1 of 1
Borough/Block/Lot: 1431-41
Street address and zip code: 210 East 77th Street 10075
Zoning: non-residental
Number of Floors:
Square footage of existing building: 28660
Square footage of land: 340
Anticipated square footage of building following construction and/or
renovation:same
Anticipated square footage of non-building improvements following
construction and/or renovation (i.e., parking lot construction):none
Intended use(s) of site (check all that apply):
Retail
Manufacturing/Industrial
12
Office
x Non-profit
For ALL USES other than Non-profit or Retail, please also complete Energy Questionnaire
Is there any improved space which is currently occupied by existing subtenant(s) (whether Affiliates or otherwise)?
Will any improved space be occupied by subtenant(s) (whether Affiliates or otherwise)?
Yes
x No
Yes
x No
If yes to either, please attach a separate page and provide details such as (1) name of subtenant business(es) (whether Affiliates or otherwise),
(2) square footage of subtenant operations, (3) subtenant lease commencement and termination dates, and (4) copies of leases.
Anticipated Ownership of Premises
1.
Please check all that apply:
x Applicant or an Affiliate is or expects to be the fee simple owner of the Project Location
Applicant or an Affiliate leases or expects to lease the Project Location
(Projected) Acquisition date: already owned
(Projected) Lease signing date:
If you checked the box above, please select one of the following:
Lease is for an entire building and property
Lease is for a portion of the building and/or property.
None of the above categories fully describe Applicant’s interest or intended interest in the Project Location, which may be more
accurately described in a supplementary document (attached).
2. If an Affiliate owns or controls (or will own or control) a Project Location, then describe such Affiliate by choosing one of the following selections and
completing the chart provided below:
General Partnership
Limited Partnership
S Corporation
Limited Liability Company
Natural Person
Other (specify):
Name of Affiliate:
C Corporation
___
EIN # of Affiliate:
Address of Affiliate:
Affiliation of Affiliate to Applicant:
Contact Person:
Title of Contact Person:
Phone Number(s):
3
501(c)(3) Organization
Core Application - Proposed Project Packet (2 of 2)
Please complete Proposed Project Packet for EACH Project Location
Employment Information
The following information will be used as part of the Agency’s calculation of the benefit of the Project, and as a basis for the comparison with the
employment information that the Applicant will be required to report on an annual basis for the term of the Project Agreement.
1.
Anticipated Facility Operations Start Date: existing
2.
Number of Employees Applicant employed throughout New York City as of the last pay period:
Part-time (working between 17.5 and 35 hours per week): 31 Full-time (working 35 or more hours per week): 171
3.
If Applicant currently occupies and operates at the Project Location, how many Full- and Part-time Employees are employed at Project Location?
Part-time (working between 17.5 and 35 hours per week): 31 Full-time (working 35 or more hours per week): 171
4.
Number of Employees Applicant expect to employ throughout New York City on the Facility Operations Start-Date:
Part-time (working between 17.5 and 35 hours per week): 31 Full-time (working 35 or more hours per week): 171
How many of these employees are expected to be relocated to the Project Location on or about the Facility Operations Start Date? N/A
Part-time (working between 17.5 and 35 hours per week):
5.
Full-time (working 35 or more hours per week):
Estimated New-growth Employment. Complete the following chart to indicate the number of new employees that are expected to be hired at the
Project Location in each year. Note: Year 1 is the year following the Facility Operations Start Date; Year 2 is the second year following that date;
Year 3 is the third, etc. Please be sure to include back-up documentation (i.e., historical payroll data) which inform your employment
projections.
Years following
Facility Operations
Start Date
1
2
3
4
5
6
Total New
Growth
7
Permanent Full-time
1
1
1
2
2
2
2
11
Permanent Part-time
1
1
1
1
1
1
1
7
Wage Information
The questions in this section apply only to Permanent Employees employed or to be employed at the Project Location, and this information should not
include compensation paid to Principals. Please note this information is required to be provided to the Agency on an annual basis.
1. If employees are to be relocated on the Facility Operations Start Date, what will be the average annual compensation per relocated employee?
N/A
Part-time:
Full-time:
2. With regard to the employees currently employed at the Project Location, what is the current average annual compensation per employee?
Part-time: 37323 Full-time: 77518
3. For new employees expected to be hired in the first year following the Facility Operations Start-Date, what is the projected average annual
compensation per employee? N/A
Part-time: 30000 Full-time: 45000
4. For all new employees (again, excluding Principals) expected to be hired during the three-year period following the Facility Operations Start Date,
please project the following:
Part-Time
Average annual compensation per employee: 30000
Annual salary of highest compensated part-time employee: 30000
Annual salary of lowest compensated part-time employee: 30000
5.
Full-Time
Average annual compensation per employee:
45000
Annual salary of highest compensated full-time employee: 45000
Annual salary of lowest compensated full-time employee: 45000
Generally describe all other forms of compensation and benefits that Permanent Employees will receive. Examples: healthcare, employercontributions for retirement plans, on-the-job training, reimbursement for educational expenses, etc. All of the above plus dental, vision, pre-tax
commuter and flexible spending plans.
4
Labor
Labor
The Applicant and its Affiliates hereinafter will be referred to collectively as the “Companies” or individually as a “Company.” If none of the following
questions apply to any of these Companies, answer “NO”; but, for any question that does apply, be sure to specify to which of the Companies the answer
is relevant.
1.
Have any of the Companies during the current calendar year or any of the five preceding calendar years experienced labor unrest situations,
including actual or threatened labor strikes, hand billing, consumer boycotts, mass demonstrations or other similar incidents?
Yes
2.
x No
Have any of the Companies received any federal and/or state unfair labor practices complaints asserted during the current calendar year or any
the five calendar years preceding the current calendar year?
Yes x No
3.
If Yes, please describe and explain current status of complaints on an attached sheet
Do any of the Companies have pending or threatened requests for arbitration, grievance proceedings or other labor disputes during the current
calendar year or any of the five calendar years preceding the current calendar year?
Yes
4.
If Yes, please explain on an attached sheet
x No
If Yes, please explain on an attached sheet
Are all employees of the Companies permitted to work in the United States?
x Yes
No
If No, please provide details on an attached sheet.
Do the Companies complete and retain all required documentation related to this inquiry, such as Employment Eligibility Verification (I-9) forms?
x Yes
5.
No
If “Yes,” please use an attached sheet to briefly describe the nature and date of the inspection and the
inspecting governmental entity. Briefly describe the outcome of the inspection, including any reports that may
have been issued and any fines or remedial or other requirements imposed upon any of the Companies as a
consequence.
Have any of the Companies incurred, or potentially incurred, any liability (including withdrawal liability) with respect to an employee benefit plan,
including a pension plan?
Yes
7.
If No, please explain on an attached sheet
Has the United States Department of Labor, the New York State Department of Labor, the New York City Office of the Comptroller or any other
local, state or federal department, agency or commission having regulatory or oversight responsibility with respect to workers and/or their working
conditions and/or their wages, inspected the premises of any Company or audited the payroll records of any Company during the current or
preceding three year calendar years?
x Yes
6.
No
x No
If “Yes,” please use an attached sheet to quantify the liability and briefly describe its nature. Refer to any
governmental entities that have had regulatory contact with the Company in connection with the liability.
Are the practices of any of the Companies now, or have they been at any time during the current or preceding five calendar years, the subject of
any complaints, claims, proceedings or litigation arising from alleged discrimination in the hiring, firing, promoting, compensating or general
treatment of employees?
Yes
x No
If “Yes,” provide details on an attached sheet. Note “discrimination” includes sexual harassment.
5
THE BIRCH WATHEN LENOX SCHOOL
13-3603578
ATTACHMENT TO IDA BENEFITS APPLICATION
RESPONSE TO “LABOR,” QUESTION 5
In 2012, the New York State Department of Labor (“DOL”) conducted an examination of the
books and records of Birch Wathen Lenox School (the “School”) for the years ended December
31, 2009, 2010 and 2011. As a result of the audit, the DOL concluded that some employees were
reported as independent contractors as opposed to employees. In addition, the DOL concluded
that the School underreported New York State unemployment insurance during the three year
period ended December 31, 2011. In response to the audit, the School submitted amended
returns to the DOL and contributed a total of $17,634.13 in unemployment insurance tax plus
$4,759.08 in accrued interest. The DOL concluded its audit for such three-year period and the
School has no current matters outstanding with the DOL.
501270258v2
Financials and Anti-Raiding
Financials
1. Has Applicant, any Affiliate, or Principal, or any close relative of any Principal, ever received, or is any such person or entity currently receiving,
financial assistance or any other kind of non-discretionary benefit from any Public Entities?
Yes
x No
If Yes, please provide details on an attached sheet.
2. Has Applicant, or any Affiliate or Principal, or any existing or proposed occupant at the Project Location(s), obtained, or is any such person or
entity in the process of obtaining, or contemplating obtaining, other assistance from the NYCIDA/Build NYC and/or other Public Entities?
Yes
x No
If Yes, please provide details on an attached sheet.
3. Has Applicant, or any Affiliate or Principal, ever defaulted on a loan or other obligation to a Public Entity?
Yes
4.
x No
If Yes, please provide details on an attached sheet.
Has real property in which Applicant, or Affiliate or Principal, holds or has ever held an ownership interest and/or controlling interest of 25 percent
or more, now or ever been (i) the subject of foreclosure (including a deed in lieu of foreclosure), or (ii) in arrears with respect to any type of tax,
assessment or other imposition?
Yes
x No
If Yes, please provide details on an attached sheet.
5. Does Applicant, or any Affiliate or Principal, have any contingent liabilities not already covered above (e.g., judgment liens, lis pendens, other
liens, etc.)? Please include mortgage loans and other loans taken in the ordinary course of business only if in default.
Yes
x No
If Yes, please provide details on an attached sheet.
6. Has Applicant, or any Affiliate or Principal, failed to file any required tax returns as and when required with appropriate governmental authorities?
Yes
x No
If Yes, please provide details on an attached sheet.
For questions 7 through 12, below, please answer the following questions relating to the Applicant (if the space provided below is insufficient, please
provide complete information on an attached sheet):
7.
List major customers: N/A – Applicant is a K-12 school
Company Name
8.
Contact
Phone
Fax
Email
% of Revenues
List major suppliers:
Company Name
Cater to You
Control Purchasing
Copycats
Govconnection
9.
Address
Address
665 Broadway, Suite
503, New York, NY
10012
50 Main Street, Suite
1520, White Plains, NY
10606
216 East 45th Street,
New York, NY 10017
7503 Standish Place,
Rockville, MD 20855
Contact
Phone
Fax
Email
Phone
Fax
Email
Anthony Trentacosti
Paul Levine
List major Funding sources (if applicable): N/A
Company Name
Address
Contact
6
Financials and Anti-Raiding
10. List unions (if applicable): N/A
Union Name
Address
Contact
Phone
Fax
Email
11. List banks:
Bank Name
JPMorgan Chase
TDBank
First Republic
Address
Contact
79th Street & 3rd
Avenue, New York,
NY 10075
317
Madison
Avenue, 3rd floor,
New York, NY 10017
1230 Avenue of the
Americas,
New
York, NY 10020
Phone
Fax
Email
Account Type
and Number
Nathalie Springer
Victoria Schneider
Stephen Szanto
12. List licensing authorities (if applicable):
Compa800-01112771ny Name
NY State Education
Dept.
NY State Assoc. of
Independent Schools
National
Assoc
of
Independent Schools
Address
89 Washington Avenue,
Albany, NY 12234
17 Elk Street, Albany,
NY 12207
1129 20th Street NW,
Suite 800 Washington,
DC 20036-3425
Contact
Phone
Fax
Email
Mark Lauria
Anti-Raiding
1.
Will the completion of the Project result in the relocation of any plant or facility located within New York State, but outside of New York City, to New
Yes x No
York City?
If “Yes,” please provide the names of the owners and addresses of the to-be-removed plant(s) or facility(ies):
2.
Will the completion of the Project result in the abandonment of any plants or facilities located in an area of New York State other than New York
City?
Yes x No
If “Yes,” please provide the names of the owners/operators and the addresses of the to-be-abandoned plant(s) or facility(ies):
If the answer to question 1 or 2 is “Yes,” please continue and answer questions 3 and 4.
3.
Is the Project reasonably necessary to preserve the competitive position of this Applicant, or of any proposed occupants of the Project, in its
industry?
Yes
No
4.
Is the Project reasonably necessary to discourage the Applicant, or any proposed occupant of the Project, from removing such plant or facility to a
location outside New York State?
Yes
No
7