BILL NUMBER:S5614

TITLE OF BILL:  An act to amend chapter 830 of the laws of 1986,
authorizing the state university of New York to contract or lease for
hotel/conference center facilities at the state university of New York
at Stony Brook, in relation to extending the aggregate term of said
contract or lease from sixty to eighty-three years

PURPOSE OF LEGISLATION:

To authorize the State University of New York at Stony Brook to amend
the term of an existing ground lease between the State University of
New York and the Stony Brook Foundation Realty, Inc. and the sublease
between the Stony Brook Foundation Realty and Harbor Financial
Management, the operator of the Hilton Garden Inn on the campus of
Stony Brook University.

SUMMARY OF SPECIFIC PROVISIONS:

This proposal would authorize SUNY to amend the term of a 1989 ground
lease with the Stony Brook Foundation Realty (SBFR) and the 2009
sublease with Harbor Financial Management, thereby fulfilling the
original intent of Chapter 830 which is to provide a private developer
with a sixty year ground lease.

JUSTIFICATION:
              

In 1986, the state Legislature authorized the SUNY Board of Trustees
to enter a contract with a non-profit corporation to lease designated
land at SUNY Stony Brook for the construction and operation of a hotel
on the campus, for a term not to exceed sixty years. The hotel is
located on thirteen acres of land bounded on the north by Fine Arts
Drive and Entry Drive, on the east by Nicolls Road, on the south by
HSC Service Drive and on the west by South Loop Road.

In 1989, SUNY negotiated a ground lease with the Stony Brook
Foundation Realty, Inc. ("SBFR"), as tenant. SBFR is an affiliate of
the Stony Brook Foundation, whose sole corporate purpose is to engage
in a broad variety of real estate-related transactions for the
University. The ground lease was approved by the State Director of
Budget, the Attorney General and the Comptroller, and was assigned
State Comptroller's Contract No. L000592.

After the approval, the University faced unexpected difficulties in
securing a developer willing to construct and operate the hotel.
Shortly after the original ground lease legislation passed, the nation
plunged into an economic downturn that made it difficult for private
developers to obtain the financing necessary for the project.  When
the economy did improve, a coalition of the project's opponents
initiated a lawsuit which further delayed development on the site.
The University was finally able to secure a developer in 2009 and, in
2011, broke ground on the project. The hotel, operating as a Hilton
Garden Inn, finally opened in 2013.

The University is making this request to fulfill the original intent
of Chapter 830 which is to provide a private developer with a sixty
year ground lease. As a result, the new expiration date will provide


the assurance of a long-term business relationship that will encourage
the operator's long-term business decisions. It will also protect the
University from negotiating a new lease with a new business owner at
the end of the existing lease term who, at that time, would be
investing in a building that is more than thirty-years old - an age
when the building may require increased maintenance and renovations.

PRIOR LEGISLATIVE HISTORY:

Chapter 830 Laws of New York 1986 and Chapter 200 Laws of New York
1989.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.