City Parcel in Manhattan Is in Dangerous Condition, Comptroller Warns

A two-acre city property that stretches from East 18th to East 23rd Streets along the East River has serious structural damage, including corroded piers, water penetration and a parking garage that is at risk of “catastrophic failure,” according to an audit released on Tuesday by the city comptroller.

The 32-page audit urged the Bloomberg administration to pay immediate attention to the site, which the city has leased since 1959. The lease is now held by a private company, New York Skyports, which uses the site as a marina, gas station and parking garage.

“The Economic Development Corporation’s inadequate oversight of this lease may have jeopardized public safety, placed the city at financial risk, and may cost the city upwards of $5.5 million or more to rectify conditions dangerous to the public,” said the city comptroller, William C. Thompson Jr. “The parking garage at the site deteriorated to the point that the Department of Small Business Services admitted ‘catastrophic failure’ was imminent.”

The Department of Small Business Services oversees property management at the site, while the Economic Development Corporation oversees the lease.

For its part, New York Skyports adamantly disputed the findings of the audit. “The report is a subjective, unsupported, unverified and intentionally one-sided presentation,” a lawyer for the company, Philippe M. Salomon of the firm Willkie Farr & Gallagher, wrote in a seven-page response included in the final audit report.

Mr. Salomon said Mr. Thompson’s office had “failed to investigate independently the underlying facts, ignored countervailing but controlling circumstances, misstated matters — some of which have been previously resolved — exaggerated the significance and implications of the current state of affairs, and relied exclusively on the landlord’s contentions and allegations without resort to objectivity.”

The audit, which covered the years 2006 and 2007, found that New York Skyports violated several lease terms and might owe the city nearly $6.1 million, including $5.5 million to fix the dangerous conditions; $464,000 for emergency repairs at the garage; and at least $46,614 in revenue payments resulting from the sale of merchandise and advertising at the site under the lease.

The audit also found that New York Skyports had an outstanding water and sewer bill of $40,677, owed to the city.

Mr. Thompson, who plans to run for mayor next year, urged the Economic Development Corporation to consider terminating the lease and to continue pursuing legal action to recoup all the money owed to the city.

In a one-page response, Christopher Malin, the controller for the Economic Development Corporation, said the agency agreed that New York Skyports had violated the terms of its lease and that the city should seek to recoup the nearly $6.1 million.

Mr. Malin’s letter did not address the harsh criticism of the development corporation in the audit.

By SEWELL CHAN

New York Times