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Feature Story - October 2003


DASNY
A profile on one of the leading financiers and builders in New York State

By Mary Beth Sammons

The Dormitory Authority of the State of New York was founded in 1944 to speed dormitory construction to house GIs returning from World War II.

But soon, dining halls for students became the niche that drove the authority's construction projects.

The 60s brought dorms for nurses at teaching hospitals, and with that, the medical-care facilities themselves. The 70s served the senior set, with a host of new living centers for the aged.

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Since then, DASNY has gradually widened its scope to finance libraries, health-care facilities and nonprofits. These days, doctors, professors and judges are included in the authority's projects.

DASNY recently built the nation's first judicial training and research facility - the New York State Judicial Institute at Pace University School of Law. The facility includes a mock courtroom, where such pressing societal issues as domestic violence, drug addition, juvenile crime and environmental waste are heavily debated.

In almost 60 years of service to New Yorkers, DASNY has grown into one of the largest financiers and builders of major institutions in the country.

"We go to Wall Street more often than any other municipal bond issuer in the country," spokesperson Claudia Hutton said. "We're in there once every two weeks."

DASNY went to market with 34 bond issues in 2002. The New York City Transitional Finance Agency was next in volume with 24 sales.

The Albany-based DASNY oversees a portfolio of 135 construction projects totaling more than $4.6 billion. For fiscal year 2002-2003, the Authority has spent more than $800 million on the projects it manages.

DASNY specializes in tax-exempt revenue bonds, which are repaid through revenues generated by the facilities themselves. The state isn't on the hook in the case of a default - not that default is a problem.

No DASNY bond issue has gone into default in the authority's history, and the high ratings its bonds receive reflect that sterling record. A consortium of investment banks underwrites each bond issue and markets the bonds to investors.

Financed largely by DANSY bonds, the construction projects range from higher-education facilities to hospitals, courtrooms and homeless centers.

Clients include the Metropolitan Museum of Art, Roswell Park Cancer Institute, New York City Health and Hospitals Corporation, psychiatric centers operated by the State Office of Mental Health, the City and State Universities of New York and New York City's Unified Court System.

A recent project is the $320 million Bronx Supreme/Criminal Court Complex .

DASNY also is a major force in the modernization of New York's health-care system, through its medical buildings, diagnostic centers and hospitals. In much the same way DASNY has shifted its focus from dorm rooms, hospitals also have moved beyond construction tied to adding bed space. They're making investments in their emergency departments, outpatient clinics and diagnostic facilities.

To that end, DASNY is playing an intregal role in the New York City Health and Hospital Corporation's $1.1 billion modernization program.

"Twenty years ago we were all about building large dormitory-style rooms and bed units for hospitals, "said Robert Walsh, DASNY's director of health and hospital programs."Used to be a hospital's revenue came from inpatient care. Now it is the opposite."

Walsh said DASNY's purpose is to finance and build facilities for higher education, health-care providers, court facilities and certain nonprofit institutions and public agencies. The authority issues tax-exempt securities, then lends the proceeds to clients to finance the construction, rehabilitation or equipping of facilities needed to furnish services to New Yorkers.

"Basically, we oversee everything in the construction from start to finish," Walsh said.

The growth in the last six decades speaks volumes about DASNY's expanding roles. The authority was the third-largest issuer of municipal bonds in the nation for the first six months of 2003, according to The Bond Buyer, a daily newspaper covering the financial markets. What's more, it sold $3.204 billion in bonds from January-June 2003, the newspaper reported.

The largest issuer was the state of Illinois, with $10.46 billion, followed by the state of California with $6.086 billion.

DASNY also has become aggressive in environmental efforts, recently teaming with the New York State Energy Research and Development Authority to form a partnership to create innovative, energy-saving projects. A pilot project was the Lake Shore Health Care Center in Chautauqua County.

The two agencies joined efforts to help the hospital install a new energy-efficient plant, which saves the facility more than $160,000 in annual energy costs.

DASNY, which portrays itself as apolitical, is run by an 11-member board that the governor indirectly controls. He appoints only five board members and picks one as chairman, while the state comptroller, Senate majority leader and Assembly speaker have one appointment each.

Governor-appointed commissioners of the three agencies most involved with DASNY (education and health and the division of the budget) also have posts.

"The board is the most active board I've ever seen," said Craig Love, former budget director for DASNY and now commissioner for the Department of Information Technology for Nassau County. "They take their job seriously."
Despite the expansion in its role, DASNY's fundamental mission remains the same. It acts as agent to protect the customer's interest during both design and construction phases of all projects. That includes selection of an architect, reviewing all design documents, soliciting bids and holding contracts on behalf of the customer.

Once construction starts, DASNY supplies onsite supervisors and enforces the schedule. Other roles include purchasing of furnishing and equipment, overseeing interior design and real estate property services.

TEAM BOX:

Developer/Construction Manager: Forest City Ratner Cos., Brooklyn, N.Y.

Architect/Planners:
The Ives Group, Architects/Planners, Fair Lawn, N.J.; Swanke Hayden Connell Architects, New York City

Façade Architects:
Hardy Holzman Pfeiffer Associates LLP, New York City

Civil Engineer:
Kravchenko & Associates, E. Northport, N.Y.

Structural Engineers: Dewberry-Goodkind Inc., New York City; Cantor Seinuk Group Inc., New York City

MEP Engineers: Cosentini Associates, New York City

Landscape Architect: Abel Bainnson Butz LLP, New York City

Steel Contractors: Empire City Iron Works, Long Island City, NY; Interstate Iron Works, Whitehouse, N.J.

Exterior Panel Contractors: Eastern Exterior Wall Systems, Inc., Bethlehem, Penn., Artex Systems, Ontario.

Plumbing and Heating Contractor: Almar Plumbing and Heating, South Ozone Park, N.Y.


Under Construction
DASNY has 135 capital projects totaling $4.6 billion currently underway

It was a "Who's Who" of state judicial leaders. In May, Chief Judge Judith Kaye, Lt. Gov. Mary Donohue and more than 200 top judges and lawyers from throughout New York gathered in the three-story atrium lobby for the grand opening of the New York State Judicial Institute at Pace University Law School.

The legal eagles where there to celebrate the opening on Law Day of the $15 million "college for judges," the nation's first judicial training and research center built specifically for a state court system. It will hold programs on such issues as integrated domestic violence, jury trial innovations and drug-related crimes.

The 28,000-sq.-ft. complex is just one of the dozens of "creative" building projects under way statewide under the guidance of the Dormitory Authority of the State of New York. The projects range from dormitories at SUNY Farmingdale, Old Westbury and Stony Brook to dozens of emergency rooms, library expansions, high-tech research facilities and medical equipment purchases.

DASNY is currently involved in 135 major capital construction projects totaling $4.6 billion for dynamic players in health care, higher education, government and other key industries across the state. The projects serve all demographic populations, from the agency's original teacher population to the ill, the elderly, the disabled and those hungering for a higher education.

"We have undertaken a whole new direction in helping to build some state-of-the-art high-tech research laboratories and it's very exciting," said DASNY spokesperson Claudia Hutton. "No other state has an organization involved at this level in building its medical facilities, city colleges, research facilities and all that we do."

There are also two potential high-tech projects on the horizon.

One is the Buffalo Life Sciences Center, to be run by Roswell Park Cancer Institute and SUNY Buffalo. The project is awaiting final legislative approval this fall, Hutton said.

There's also the proposed Wadsworth Laboratories (an arm of the New York State Health Department). If it is approved by the federal government next fall, it will be one of two national laboratories for the study of viruses and other biotechnical research. The proposed site is Grifiss Air Force Base near Rome, N.Y. (See sidebar for more details).

The authority also has financed numerous medical facility and specifically ER projects including $320 million in bonds for Memorial Sloan Kettering's expansion in Manhattan and onto Long Island. It also issued bonds to build the new wing of the Gurwin Geriatric Center and to finance Long Island Jewish Medical Center's new generator.

A $178 million, $245,000-sq.-ft. diagnostic treatment center is under way at Kings County Hospital Center in Brooklyn. The project designer is Skidmore, Owings & Merrill and the construction manager is Gilbane/TDX Construction Co.

Some of the major current projects include:

New York State Judicial Institute at Pace University in White Plains (as mentioned above):

Part of the state's Unified Court System, the institute is responsible for training New York's 1,300 state judges and more than 2,000 town and village judges. The new building will end a 20-year practice of using rented or borrowed space in courts, hotels and bar association meeting rooms to provide judicial education.

Erik Kaeyer, vice president of Kaeyer, Garment & Davidson Architects, the project's architect, said the construction schedule was "one of the tightest we've ever had. They held our feet to the fire to make sure we got this opened. And, it happened."

Kaeyer said architects faced the challenge of creating a significant physical presence for the new building, even though it was to be located in the back of the Law School campus - or as Kaeyer described it, "in the shadow of the other academic buildings."

Architects also had to bring light into the building's land-locked environment. The solution: a three-story atrium carved into the center of the building.

The DASNY project team was led by managing director Douglas VanVleck with Philip Piscatella, director of DASNY's New York City Courts Program; project manager Frank Frasco; and architect Erik Kaeyer of Kaeyer Garment & Davidson Architects of Mount Kosco, N.Y.

Stonybrook University Hospital: The State University of New York at Stonybrook:

Construction is under way on a 40,000-sq.-ft. cardiac care center, which is intended to serve as the hub of heart care in Suffolk County.

The $25 million center is only a small part of a five-year, proposed $ 300 million renovation, which will also include plans to build a $40 million, 678-bed dormitory.

Construction on the four-building project on the northwest side of campus began in the spring. At least three of the buildings, and possibly all four, are scheduled to open before the beginning of the 2004 school year, according to Dick Mann, the school's vice president for administration.

The project is part of a long-term capital plan funded by DASNY bonds. The project is being designed by Manhattan-based architecture firm Urbahn Associates. Builders will bid on the construction job after the design is finished.

The Maritime College, a specialized college of The State University of New York (called SUNY Maritime) (See related sidebar):

Located in Throggs Neck, N.Y., the project includes a new, four-story, 300-bed residence hall for the 125-year-old college, which was the nation's first commercial maritime institution. Phase two includes a second 150-bed unit.

The project is being built on a fast-track basis and is scheduled for completion in two phases - the first 300 bed units in March and another 150 beds in August.

Skanska USA Building Inc. of NewYork is handling the construction, and Mach Architecture & Engineering, PC, based in Williamsville, N.Y., is the architect and engineer.

Bellevue Hospital Center in New York City:

Construction is under way on a $178 million, five-story, 207,000-sq.-ft. ambulatory-care facility and the renovation of critical care units. The job is scheduled for completion in November 2005.

In addition to the new facility, the project includes renovating about 46,000 sq. ft. space in the main building for critical care and another 90,000 sq. ft. in the building for medical/surgical units and upgraded mechanical systems.

The architect for the project is Pei, Cobb, Freed and Partners of New York City. The construction manager is Turner Construction Co. of New York City.

Queens Hospital Center, Jamaica, N.Y.:

The recently completed $149 million major modernization plan included reconstructing the entire main building of this major health care provider, which has served the communities of southeast and central Queens for almost 100 years.

It was transformed into a state-of-the-art facility with 200 beds. A new 360,000-sq.-ft. building was added to create a women's health care center and cancer treatment unit. The cancer unit offers a wide range of services for cancers of the breast, uterus, lungs, colon, prostate, head and neck.

Two architectural firms designed the reconstruction and new construction projects: Perkins & Will Inc. did the reconstruction project and Davis Brody Bond was the designer for the new women's health care and cancer treatment unit. Bovis Lend Lease was the construction manager for both. All three firms are based in Manhattan.

Coney Island Hospital, Brooklyn:

DASNY and Coney Island Hospital topped off the new eight-story patient bed tower in the spring. The project is part of a continuing effort to modernize the hospital, which is part of the New York City Health and Hospitals Corporation.

The $88.6 million project includes construction of the new inpatient bed tower and connecting bridges to link the addition to an existing building. An ambulatory care center will be located on the first floor, with 212 private and semiprivate inpatient rooms, and related spaces for medical and office staff.

The steel-framed bed tower has a façade of masonry insulated metal panels and glass curtain wall. Construction began in August 2002 and is scheduled for completion in summer 2006.

This is the second phase of the Coney Island Hospital modernization. DASNY has completed renovations of the ambulatory diagnostic area and established a cardiac catheterization laboratory. Renovations are under way at the maternity department to add six birthing rooms, and the authority expects that $4 million project to be completed in summer 2004

The Hillier Group, based in Princeton, N.J., is the project architect; Skanska Construction, New York, is the construction manager.

Queens Family Courthouse, Jamaica, N.Y.:

The $104 million courthouse opened its doors last spring with hoopla similar to that at the new Judicial Institute: Chief Judge Kaye and New York City Mayor Michael Bloomberg and other officials were there to celebrate the opening of this the new facility, which has 23 courtrooms, seven hearing rooms, 14 large waiting rooms, chambers for 16 judges and a children's center.

There are also offices for agencies, including the Law Department, Department of Probation, State Office of Mental Health and the Legal Aid Society.

Interior space was designed to help the more than 2,000 people who use the courthouse daily to move efficiently from place to place.

Project architects were the team of Pei Cobb Freed & Partners/Gruzen Samton LLP. Bovis Lend Lease was the construction manager.


On the Boards
DASNY takes advantage of low interest rates and plans for the future

At a time when the interest rates are at their lowest in history, DASNY has aggressively been plotting future development plans, according to Claudia Hutton, spokesperson for the agency.

For the first nine months of the current fiscal year, the authority issued $ 3.47 billion in bonds, more than the $2.69 billion for the previous full fiscal year.

That financing translates into projects on the drawing board for the future, Hutton said. Some examples: The authority recently issued $34 million in bonds for an 850-bed dorm complex at SUNY Old Westbury; $20 million for a 400-bed project at SUNY Farmingdale; and $29 million for the 678-bed dorm at Stony Brook (see above). It also issued more than $100 million in bonds for construction at Columbia University.

Other major projects on the drawing board include:

The New York City College of Architecture:

An existing, though run down, modernist glass-block building - designed and

built in the early 1950s - will be the new home for the City College School of Architecture, which has outgrown its current location in Shepard Hall.

The building was originally a library, but decades of evolving academic and administrative programs have transformed it into a fractured collection of generally inadequate spaces housing administrative functions for the college as a whole.

The campus master plan relocates these administrative functions to other structures and calls for a gut renovation of the existing building.

The $56.15 million project includes extensive exterior work, as well as two floors of loft studio space, an architecture library, exhibit spaces, offices and a lecture hall around a large atrium. At the top of the atrium, a skylight introduces natural light into the heart of the plan and a rooftop amphitheater overlooks the campus.

The architect for the project is Rafael Vinoly Architects of New York City, and the construction manager is the Liro Group of Syosset, Long Island. The design is only 15 percent complete. Construction should be completed by 2005.

Wadsworth Laboratories:

Gov. George E. Pataki in May announced that the State Health Department's application to construct a $200 million biodefense laboratory at Rome's Griffiss Business and Technology Park has cleared the first major hurdle in the federal government's selection process.

A scientific peer review of the application conducted in early June qualified New York's application to move on to the next round of the approval process.

Federal officials are continuing their efforts to select two sites nationally that will share $275 million in federal funding, and the National Institute of Allergy and Infectious Diseases plans to make a final decision on a site this fall.

The state's application calls for constructing an approximately 300,000-sq.-ft. laboratory with specialized areas where microbes can be studied in safe, controlled conditions to allow researchers to develop and test vaccines and medical products.

DANSY would provide construction project management services for the project.


SUNY Maritime
Construction crews run into a wall, but keep going

After successfully overcoming the first hurdle of drafting an architectural design and construction project in less than three months, the construction crews and architects for the $14 million expansion of The State University of New York (SUNY Maritime) were ready to work and meet their tight construction deadline.
And then they hit a wall. Literally.

Poised for a major modernization of the nation's oldest commercial maritime institution, the construction crews discovered a rock-solid sea wall along the Long Island Sound, after they dug 8 in. into the landfill that lined the oceanside campus. Founded more then 125 years ago, the college established a permanent home at its present Fort Schuyler campus in 1934.

"It was one of those sea walls filled with rocks that people want to have built, the kind you see in pictures that are breathtakingly beautiful, except we didn't know it was there," said Craig Belesi, senior vice president for Skanska USA Building Inc. based in Parsippany, N.J.

"We uncovered it under the dirt and landfill that had obviously been piled on it over the decades. It was something we had to remove to put in our pilings for the building. It became a massive project to remove the rocks and stones."

The project needed 220 concrete piles.

One other thing: It was also discovered the property is located on a fault line, said Robin Mach, president of Mach Architecture & Engineering, PC based in Williamsville, N.Y.

And another thing; Midstream into the first month of construction, plans were altered to double the size of the dormitory to 303 beds.

Mach said he brought in help from two of his firm's offices, utilizing a team of 20 to 25 architects to work with the construction team, officials from the Dormitory Authority of the State of New York and representatives from the college to coordinate the project so quickly. The contract was awarded in March, just months before the first shovels went into the ground.

"Many quick on-the-spot decisions had to be made," said Mach, who attributes the successful time execution to working closely with the entire crew and specifically with Dr. Kimberly Kline, CEO of the college.

"This was one of those projects where we all worked together to make the quick decisions that needed to be made and nothing got stymied in politics and all the usual hold ups," Mach added.

Belesi agreed: "This is a project with a no-matter-what deadline, and we've worked aggressively and with a lot of speed to make that happen."

The new four-story residence is a steel structure being built on a steel pile supported by a concrete foundation. A masonry and stone façade will complement the surrounding campus structures and the fort's massive stone façade.

At the rear of the building, sections of glass curtain wall will be installed so that the students can take in views of Long Island Sound while relaxing in any one of the centrally located lounge areas. This building will also provide needed handicap-accessible room suites.

-Claudia Hutton, a spokesperson for DASNY, said the first 150 beds in will be completed by March, and another 150 will be finished in August.

Construction on the SUNY Maritime project began in June 2002 with the excavation of the sea wall. The dorms are scheduled to be opened for students beginning in the fall 2004 semester.

"This is a testament of our vision for the future of the Maritime College," said retired Navy Vice Adm. John R. Ryan, president of the school. "Literally, we are breaking ground for a new residence, but figuratively, we are affirming our vision of the Maritime College as a model in higher education and leadership development."


Maryanne Gridley
Providing leadership for an aggressive financing and building plan

Maryanne Gridley, 53, was appointed Executive director of the Dormitory Authority of the State of New York in April 2002 by the Authority's board of directors.

Prior to joining DASNY and since March 1999, Gridley was First Deputy Secretary to Gov. George E. Pataki. She was appointed assistant secretary to the governor when he first took office in January 1995 and deputy secretary in 1997.

As deputy secretary she managed the Office of Public Authorities within the Executive Chamber. As part of her work there, she directed staff in a statewide effort to ensure that public authorities met policy goals and refocused their missions to better serve New Yorkers.

In that role she was a senior policy adviser to the governor, was responsible for all budget and administrative matters within the Governor's Office and served as the internal control officer.

Gridley joined the Office of the State Comptroller in 1985 as assistant deputy comptroller for investments and cash management and was responsible for the issuance of state general obligation debt and certificates of participation, management of the daily cash flow of the state's general fund and the selection and compensation for the state's banking operations.

Her state government career began in 1977, when she joined the staff of the State Senate Finance Committee, rising to the title of senior legislative budget analyst responsible for budget and program recommendations to the Senate majority on health and social service issues.

In March 2000, the Municipal Forum of New York honored her with its Public Sector Career Service Award.

As DASNY executive director, Gridley will be the chief administrative and operating officer of the public authority that is one of the top 10 issuers of municipal bonds in the nation.

Gridley replaced Thomas J. Murphy, who is returning to the private sector after seven years with the authority.

We asked Gridley her about the biggest challenges facing DASNY, about her time in office, the changes she has put in place and her plans for the future:

What is the biggest challenge of your position?

The biggest challenge is running two businesses: finance and construction. Every day we deal with issues from both lines of business. We are the largest municipal-bond issuer in the country for health and education. We sold more than $4 billion in bonds during the past fiscal year. Our construction program has over 600 projects that we actively manage, worth about $3.8 billion. We spend about $800 million in construction dollars a year.

What changes have you put into place since you were put at the helm of DASNY more than a year ago?

With respect to the authority's organization, very little. I found that it was staffed with competent and knowledgeable professionals. There is a work ethic that seeks to regularly improve our processes and procedures, and of course I will continue to foster that.

However, we began two new financing programs, one using state personal income tax revenues to back bonds issued on behalf of state education and economic development programs, and the other to benefit local school districts. We also are financing the grants awarded by the Legislature for specific economic development, transportation and higher education projects statewide.

We're putting the final touches on an integrated project management system, which will integrate JD Edwards with Expedition software. This will provide better oversight and reporting for our customers.

What is your most exciting project; i.e., a project that will really make a difference in New York's health care or higher education/court system?

All our projects are exciting to our customers, and all of them benefit the end users of the facilities we build. But we have some high-visibility projects worth mentioning:

  • DNA Lab for the New York City Medical Examiner's Office in Manhattan, which will give the city state-of-the-art forensic laboratories.

  • Buffalo Life Sciences Complex in Buffalo, one of Gov. Pataki's Centers for Excellence; a major biotech facility with SUNY Buffalo; and the Roswell Park Cancer Institute conducting world-class research.

  • New York City Health & Hospitals Corporation capital plan, which is rebuilding the city's public hospital infrastructure. We've completed a new Queens Hospital and the first phase of Kings County Hospital. We're in the second phase at Kings, and have major modernization programs at Jacobi Hospital and Coney Island Hospital.

What is your personal mission statement, the why of how this role is allowing you to fulfill personal goals and make a difference?

To enable, encourage and motivate our talented employees to provide quality facilities, financings and customer service.

What lies ahead for DASNY?

We will continue to provide the state and city universities with quality dormitories and academic facilities, and provide health-care institutions with quality construction. We will continue our role in rebuilding New York City's court facilities. We are implementing cutting-edge facility infrastructure, with energy-efficient buildings that are less dependent on fossil fuels.

We are developing expertise in high-tech construction with the state's Centers for Excellence, the DNA lab and the state's application to the federal government to build one of two national biodefense laboratories researching vaccines, diagnostics and therapeutics. (We expect the federal government to choose sites by the end of September.)

What goals do you have for the organization?

I want the authority to be synonymous with quality, on-time construction and low-cost financing for public-purpose facilities. I also seek to manage for organization stability and quality as we continue to grow.

What about your background do you bring to this position?

I grew up in Chemung County (N.Y.), where my father was an elected public official. I got my bachelor's degree at the Newton College of the Sacred Heart outside Boston and my master's degree in public administration from SUNY Albany. I've been in government service for more than 25 years, including 10 years managing New York State's cash flow and debt, and the most recent seven years as a senior policy adviser to Gov. Pataki, particularly on public authority and finance issues.

I live in a rural area outside Albany, where my home is a peaceful retreat from work.


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