Storm Clouds Over NYU 2031

As a Village resident for the last 20 years, I have witnessed the slow, but steady erosion of the character of this unique and precious community. It has been, and is still being, gnawed at by avaricious real estate developers in their quest to build high rise luxury buildings that are more appropriate for the Upper East Side than the Village.

Our neighborhood has a rich cultural patrimony which is being destroyed as buildings with significant histories have been leveled to make way for ones that are banal and common in their design. In addition to the outside forces buffeting the Village, a more insidious threat has emerged, that of New York University.

NYU, long an intimate part of our community, is expanding at such a rapid rate and in such a manner, that it will drastically change the shape and texture of the neighborhood. It has already destroyed structures that are important in our history, among others, the Poe House and the Provincetown Playhouse. It also intends to usurp the green space, which borders some of its buildings, and it has applied for extraordinary building variances which would, if approved, allow it to add structures which would be out of character in the Village, in both height and density.

While NYU bulldozes the Village, most local politicians kowtow to its President,John Sexton. With the exception of Public Advocate Bill De Blasio and Assembly person Deborah Glick, our local representatives,including BP Stringer and Speaker Christine Quinn have bent over backwards to support the flawed NYU expansion plan called NYU 2013. This, despite the fact that the driving force behind the plan,John Sexton, has recently been given a no confidence vote by the faculty at NYU’s School of Arts and Science. To no one’s surprise, the University’s Board of Trustees,however, reiterated its support for the President. This support is understandable when among its members are many who have intimate connections with President Sexton, including a number of builders and real estate developers.

Adding to the controversy concerning the school’s administration is the position taken by The American Association of University Professors at NYU, which on March 25 called for President Sexton to step down “in the interest of the institution.” Though political support of Sexton continues, this may dissipate as recently there have been serious allegations of unethical, and perhaps illegal, conduct by the NYU Administration.

At the very least, Sexton’s actions call into question whether NYU operates in the best interest of its student body or as cash cow for his cronies. It would seem that in the maniacal drive by Sexton and NYU’s Board of Trustees to be the largest and grandest worldwide teaching institution, they have lost sight of the fact that a university is charged with the proper instruction of its students, not inflating the egos of its administration, and should foster the highest ethical standards in its student body. My information concerning what has been happening at the University comes from two sources: NYU’s news blog, nyulocal.com and a recent letter from a ranking member of the US Senate’s Judiciary Committee,Senator Chuck Grassley, dated March 15th and addressed to John Sexton.

The questions raised by Senator Grassley and reiterated by NYU Local, concern the validity of NYU’s tax exempt status, the benefit of which is intended to be passed on to students to reduce the cost of their education and to increase its quality. When a large number of students are struggling with high tuition and an inordinate amount of debt, why is the University paying its administrators huge sums of money and also advancing them huge loans which in some cases are not repaid because they are forgiven by the University?

According to reports, seven loans of more than $1 million each were made to the school’s top administrators, including $5.73 million to Law School Dean Richard Revesz. This is in addition to his $1.04 million salary.

Among the other criticized financial dealings was one that was between the University and Jacob “Jack” Lew, its former Executive Vice President of Operations from 2001-2006. It seems that during his tenure, Mr. Lew, while receiving a yearly salary of $840,339, was given loans in the form of two mortgages, one of which is said

to have been for $1.5 million and another for $500,000. The half million dollar loan was forgivable in $100,000 per year installments.Mr. Lew’s employment contract ran for five years and thus, it would appear that this $500,000 was more of a gift than a loan. In addition to the foregoing compensation, Mr. Lew was given $100,000 when he signed his employment contract and at the end of his tenure, he was given a$685,000 severance payment when he took a higher paying job at Citigroup.

Additional questions have also arisen concerning NYU’s preferential loan treatment to Citigroup during Lew’s tenure.According to NYU Local, “…the university made Citigroup a ‘preferred lender,’ which would lead students to believe that the bank offered the lowest loan rate. But Citi didn’t, in fact, offer the lowest rates and the university was later to have pushed Citigroup loans in exchange for cash and other incentives. The loans were deemed deceptive and at times illegal’ by the Attorney General, and NYU paid out $1.4 million to students; Citigroup paid $2 million.”

Recently, the NYU Faculty Against the Sexton Plan wrote an open letter to the NYU Board Of Trustees stating that there are a number of the issues that should be investigated, as they pertain directly to NYU’s academic standing and financial health. The letter pointed out that Tisch Asia,the 1st NYU campus offering a degree outside of the US, would be closing after incurring a debt of $9 million to the Singapore government. In addition, the founder and former president of NYU’s Tisch School of the Arts Asia is suing the University for defamation and wrongful termination after she was fired on charges of embezzling.The students at NYU/ Florence are protesting cuts to the studio art and the art history faculty. NYU/London has serious concerns relating to shoddy construction of academic sites and student housing which has left the buildings in an unsightly and unsafe condition.

The location of NYU in Abu Dhabi raises serious human rights and moral concerns regarding lending NYU’s prestige to a repressive state. On a very practical level,that campus is having serious problems in remaining viable. It appears that there are only some 400 students currently enrolled,out of the 2,000 said to be required for NYU/AD to prosper independently.

The question that also remains is whether the cost of expansion under NYU 2031 will largely be borne by the students by way of increased tuition. The problem NYU faces in Abu Dhabi would seem to be one that will have to be faced here in NYC.The problem is twofold: how can scholastic standards be maintained if enrollment is stepped up at a rapid pace and alternatively,if the enrollment is not sufficient to fill all the new seats; what happens to the new buildings and additions that will be unused?

Finally, according to the Princeton Review,funding at NYU for financial aid to its student body is the poorest in the country.Contrast that with the fact that its upper echelon seems to be swimming in dough.Together, decide whether at NYU the interest of its students is really foremost, and whether its Plan 2031 should be supported and if it really is entitled to the building variances it seeks and the tax exemption it presently enjoys.

Gary Tomei is an attorney in practice. He is on the Board of Directors of The Sarcoma Foundation of America and one its founders. Tomei is also founding member of Protect the Village Historic District and President of the West 13 Street 100 Block Association