Buried inside that employment dispute is another story: a deteriorating steam tunnel, a fight over who would pay for it, and a warning to Albany that never resulted in a repair.
A Lawsuit Comes Back to Life
Susan Rosenthal’s legal fight was supposed to be largely over. On August 10, the Second Circuit gave it another life, vacating the dismissal of her federal due-process claim and sending the case back to the Southern District of New York.
The appeals court did not decide that Rosenthal was wrongfully terminated, that state officials retaliated against her, or that her version of events is true. Its ruling was narrower: previous state-court dismissals did not legally prevent her from pursuing this particular federal claim. The merits of those allegations are now back before a federal court, where they can be argued rather than disposed of on that procedural ground.
Rosenthal served as RIOC president and CEO from approximately June 2015 until June 19, 2020, when she was abruptly terminated. A senior adviser to then-Governor Andrew Cuomo quickly told the press that an investigation had substantiated racially and sexually offensive conduct. Rosenthal has spent the years since challenging both her dismissal and the public account attached to it.
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But inside that employment dispute is another story that has received far less attention: the deteriorating steam tunnel beneath Roosevelt Island’s eastern promenade. It is the same structure RIOC would later spend hundreds of thousands of dollars designing a repair for and budget millions more to fix. Six years after Rosenthal left RIOC, that repair still has not happened.
The Problem She Says Albany Wouldn’t Solve
Rosenthal’s account begins with an engineering problem. She alleges that she became increasingly concerned about the abandoned steam tunnel running along Roosevelt Island’s eastern side. The tunnel once carried steam between municipal hospital facilities, but portions of the structure also serve as part of Roosevelt Island’s seawall.
That underlying condition is not merely Rosenthal’s theory. RIOC itself says the U.S. Army Corps of Engineers concluded in 2001 that approximately 4,200 linear feet of the tunnel also functioned as seawall and required repairs. RIOC says that, to its knowledge, those repairs were never made. Langan Engineering returned to inspect the structure in 2018 and again in September 2020 and documented further deterioration.
Where the record becomes disputed is what happened inside government. Rosenthal alleges that the City bore ultimate legal responsibility for the tunnel but resisted taking it on, while the State, she says, refused to force the City to act.
According to Rosenthal, those discussions included a possible deal in which the State would take on the tunnel repair in exchange for ownership or control tied to the decommissioned Steam Plant property. That description lines up uncomfortably well with the current picture: the Steam Plant is moving forward as part of a broader City-State redevelopment discussion, while communication about the steam tunnel remains vague and unresolved. The Governor’s announcement that the State and City would jointly plan for possible redevelopment of the Steam Plant site only makes that connection harder to ignore.
The Warning to Albany
According to Rosenthal, she did not simply raise the tunnel as an engineering concern. She says she prepared a memorandum warning about the public-safety consequences of continued deterioration and the political exposure Albany could face if the problem remained unresolved. She also says she repeatedly placed the tunnel on a “red flags-green flags” list sent to then-Deputy Secretary for Economic Development Simonida Subotic.
The tunnel itself was already a documented problem long before Rosenthal raised those warnings. The Army Corps had identified needed repairs years earlier, and later engineering inspections found the deterioration continuing. By the time Rosenthal left RIOC, the basic issue was no longer whether the tunnel needed attention. It was who would accept responsibility for fixing it, who would pay, and why years of warnings and negotiations still had not produced a repair.
Rosenthal describes a government problem Roosevelt Island residents would later see play out publicly: multiple agencies aware of a deteriorating structure, responsibility disputed between governments, negotiations occurring outside public view, and no repair following from any of it.
Then Rosenthal Was Gone
On June 19, 2020, Rosenthal was abruptly fired, ending her tenure while the steam tunnel dispute remained unresolved. The public controversy that followed focused on the allegations against her. The tunnel, and the warnings she says she had been sending to Albany, largely disappeared from view.
It would be reckless to conclude from that timeline alone that Rosenthal was fired because she pressured Albany over the steam tunnel. But Rosenthal alleges that the tunnel was one of the major unresolved issues she repeatedly pressed with Albany, that those warnings created political friction, and that she was later removed.
What makes the tunnel harder to dismiss as an after-the-fact theory is that it appeared in the earlier litigation itself. During Rosenthal’s state case, a judge ordered discovery that included communications concerning the steam tunnels and public-safety hazards, government responses to those warnings, the Army Corps and Langan materials, and communications surrounding Rosenthal’s termination. The Article 78 proceeding was dismissed before that discovery produced a public accounting. The records stayed out of public view.
Six Years Later, Check the Tunnel
The clearest way to test the larger significance of Rosenthal’s story is not to begin with her firing. Begin underground. In 2001, the Army Corps identified repairs that were needed. Later engineering work found deterioration continuing.
By October 2021, RIOC General Counsel Gretchen Robinson was telling the board that the tunnel had deteriorated to a condition presenting serious safety concerns. Her memo said negotiations with the City over who would make the repairs had stalled, but RIOC did not want to wait because the project involved health and public safety. RIOC therefore moved forward with a repair design while expressly refusing to concede that it owned the structure or was legally responsible for repairing it.
That sequence is almost a perfect institutional summary of the problem Rosenthal says she had been confronting. Everyone understood that something needed to be done. Nobody wanted the obligation attached to their name. Engineering work advanced, capital money appeared in RIOC budgets, and construction was repeatedly pushed into future years. Eventually, the repair disappeared from the capital plan without the tunnel having been fixed.
The more consequential question for Roosevelt Island is whether she accurately identified the machinery surrounding the tunnel: a known public-safety problem, multiple governments disputing responsibility, years of engineering studies, negotiations behind closed doors, money budgeted and later removed, and no repair.
Six years after Susan Rosenthal left RIOC, Albany remains free to dispute her account of what happened to Susan Rosenthal.
It is much harder to dispute what happened to the steam tunnel.
Nobody fixed it.
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