The 34th Street Partnership, a New York City-based business improvement district, is postponing a tax-exempt bond issue slated to take place in the early fall, an official from the district confirmed.
The partnership, a nonprofit corporation that became effective in January 1992, would have been the second business improvement district in the city to issue tax-exempt bonds. In April, the Grand Central District Management Association issued $30 million in tax-exempt securities to improve a 50-block area in midtown Manhattan surrounding Grand Central Station.
Both business improvement districts were formed by Daniel A. Biederman, who serves as president of the groups. Mr. Biederman is also president of the Bryant Park Restoration Corp., another business improvement district in New York City.
Andrew M. Manshel, the 34th Street Partnership's counsel, confirmed that the deal has been postponed from its early fall target date. "We are not prepared to do it," Mr. Manshel said. "It's a management decision that has nothing to do with anything external, such as the marketability of our bonds. It has to do with our work load."
Mr. Manshel added that the partnership will complete a bond sale at a later date. He said the 34th Street group would sell fewer securities than the Grand Central district issued during its last deal, but he refused to elaborate.
But one city source said people in the municipal market have speculated that the partnership postponed the issue because it is a relatively new organization that is not widely known among investors. Mr. Manshel denied this account, commenting, "That doesn't make any sense to me."
The partnership, if and when it completes the deal, will pay the principal and interest on the bonds through a tax on commercial real estate within the district's boundaries. The partnership covers an area in Manhattan that lies between 31st and 35th streets and Park and 10th avenues. The bonding will help the partnership make improvements to the area.
At the moment, 25 business improvement districts operate in the city. These organizations are regulated by the city's Department of Business Services.
Wallace L. Ford 2d, the city's commissioner of business services, said that the department was aware the 34th Street Partnership is considering a bond deal, but that the proposal was in its "preliminary stages." Any bond issue from an improvement district must get Mr. Ford's recommendation and receive final approval from Mayor David N. Dinkins.
Although the mayor approved the Grand Central district's bond issue in March, the deal met with a considerable degree of controversy. Mr. Ford initially put the breaks on that deal, which was underwritten by Goldman, Sachs & Co., because the district failed to disclose legal and financial records with the city. The district later supplied the information.
In addition, several city officials said the deal did not receive proper oversight from city government finance officials, such as those in the city comptroller's office.