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BY LINCOLN ANDERSON | With a lack of government funding, plus Pier 40 on the verge of sliding under the waves to a watery end, Hudson River Park is facing some daunting challenges.
With costs of $23 million for 2012 outstripping projected revenue of $16 million for 2013, the park is facing a $7 million operating deficit.
The Hudson River Park Trust is hoping to push for legislative changes to the Hudson River Park Act to diversify revenue-generating possibilities for the park. But with word now coming that there won’t be a special legislative session in Albany next month, it means the soonest any legislative changes could be passed would be in March, cobbled in with the approval of the state budget.
Among such changes, the Hudson River Park Trust’s leadership thinks allowing residential use on Pier 40, for one, could be an option to help solve the park’s problems, in that the residential developer would foot the cost of repairing the crumbling West Houston St. pier, plus would pay substantial rent, helping generate revenue to operate and maintain the entire 5-mile-long park. Residential use, however, is only among a number of options the Trust is exploring for the pier, and the agency has not formally endorsed this use.
Although supported by local youth sports leagues — which recently offered their own proposal for towers next to but not on Pier 40 — the residential option has faced opposition from Assemblymember Deborah Glick and many community members.
Less controversial by far and offering a better chance for funding help in the near future is a proposal for a neighborhood improvement district, or NID, for the waterfront park as well as its surrounding blocks.
Indeed, Glick has previously voiced support for the concept, both to this newspaper and at public meetings. Although, speaking this week, she expressed her concern that most residents don’t have a clear grasp of the plan because there hasn’t been enough outreach.
“I think it has potential,” she said, “but I think it has a lot of open questions. One big one is how informed and engaged are the neighborhoods that will be affected?”
The NID, which would be nonprofit, could be up and running by 2014, when it would make its first tax assessment.
The district’s eastern boundary would extend, on average, two to three blocks into the neighborhoods bordering the park’s length.
Like a BID — but a NID
The NID would have the same structure and funding mechanism as the city’s existing 67 business improvement districts, or BIDs. It would be set up under the city’s BID regulations and go through all the approvals that a BID goes through. However, this district is being called a NID simply because it includes a very large park and also because one-third of its property outside the park is residential — a high percentage for a BID.
Also, it’s being called a NID since, at its heart, it would not be a vehicle for business improvement, but rather for maintaining and improving the park, as well as keeping up the plantings on the West Side Highway median, making highway crossings safer — possibly by even using crossing guards — and greening and cleaning the residential and commercial blocks near the park.
Commissioned by Friends of Hudson River Park, a 2008 study by the Regional Plan Association and the Real Estate Board of New York demonstrated Hudson River Park’s impact on surrounding property values. The park has helped fuel $3 billion in new construction since 1999, the study found, with 94 buildings — either new construction or renovations — adjacent to the park since its groundbreaking. There has been a $1.1 billion increase in property values within two blocks of the park, the study found, attributing 20 percent of that amount to the park’s development.
When they began exploring the idea a few years ago about how to capitalize on the park’s increase of property values, the Friends first looked at the idea of using tax incremental financing, or TIF — under which a percentage of the increased property taxes would be funneled toward the park. However, while other cities do have TIF, New York does not, so the Friends instead turned to the idea of an improvement district.
7.5 cents per square foot
Under the NID, residential property owners would pay a special annual tax assessment of 7.5 cents per square foot. Commercial property owners would pay 15 cents per square foot. Under this formula, the owner of a 600-square-foot, residential studio apartment would pay $45 per year; the owner of an 800-square-foot, one-bedroom apartment would pay $60 a year; and the owner of a 1,000-square-foot, two-bedroom apartment would pay $75 per year. Public housing and nonprofit owners would be exempt.
Commercial owners can pass the assessment on to tenants. Co-op residential buildings would be assessed as a whole, with the tax then broken down for individual unit owners, while condo apartment owners would be assessed individually.
A.J. Pietrantone, executive director of the Friends of Hudson River Park, said the NID could raise $10 million a year, with at least $6 million of that going toward the park, which would account for about 20 percent of the Hudson River Park’s total annual budget. Regardless of how many feet are being assessed, the NID would never raise more than $10 million.
Where money would go
A PowerPoint presentation showed at a recent Greenwich Village outreach meeting for the district showed a breakdown of how the money would be allocated. In addition to spending $6 million on park conservation and stewardship, $1.35 million would be allocated for “connectivity” and safety initiatives, making West Side Highway pedestrian crossings safer. (Illustrating the need for greater safety, the PowerPoint showed a white “ghost bike” along the Hudson River Park bike path where a cyclist was killed by a tow truck crossing the path.) The NID would spend $1.3 million to keep up the plantings in the highway median and to landscape the bike path’s edges, as well as enhancing other public spaces. Another $600,000 would be spent on community-park partnerships; $400,000 would be earmarked for studies, design and analysis; and $350,000 would go toward the NID’s administrative costs.
Steering committee members
The proposed funding district’s steering committee currently includes a mix of park advocates, community leaders and property owners. Among them are David Gruber and Corey Johnson, the respective chairpersons of Community Boards 2 and 4; Tom Fox, former head of the Hudson River Park Conservancy, the Trust’s predecessor; Maria Passannante-Derr, a former C.B. 2 chairperson who owns property near the park; Joe Restuccia, of Clinton Housing Development Company; and Steve Spinola of REBNY.
C.B. 2, under its former chairperson Brad Hoylman, last year passed a resolution in support of the Hudson River Park NID.
Other park-supporting BIDs
Some of New York City’s existing BIDs do support parks, including those covering 14th St./Union Square, 34th St. and Bryant Park, all of which also have residential assessments. Other BIDs with residential assessments include Brighton Beach, Columbus/Amsterdam Aves. and Grand Central. While the Wall St. area’s Downtown Alliance is the city’s largest BID in terms of tax assessments, the Hudson River Park NID would also be among the larger districts in terms of its revenue, and — at 5 miles long — would probably be the biggest in terms of sheer area covered.
The park NID would have a board of directors of no less than 13 members, weighted toward property owners, but also including tenant members (both commercial and residential), as well as representatives of Community Boards 1, 2 and 4 and local elected officials.
A first round of public outreach hearings is currently wrapping up, with the Village hearing having been held two weeks ago and a Chelsea hearing being held this past Tuesday. A second round of outreach hearings will be held in January and February.
The Hudson River Park NID proposal will be submitted to the city in March, starting the review process leading to an eventual vote by the City Council.
No owners’ vote needed
As part of the required process, a needs-assessment survey — technically not a vote — was mailed out to property owners, and the Council will use the results to determine if there’s adequate support for the plan. Pietrantone said there has been no unified opposition to the NID so far. Under the regulations, a formal vote on the initiative by property owners isn’t required.
At the recent Village outreach hearing, the turnout was very light, which was attributed to the fact that many Lower West Siders were still dealing with the fallout from Superstorm Sandy and the blackout — if not still actually displaced from their homes. Among members of the public who testified, opinion was fairly evenly split pro and con on the NID.
Katy Bordonaro, a West Village Houses tenant leader, said she opposed the NID “as currently structured.” She said she moved to the area when property values were much lower, so it’s not fair for her to have to pay an assessment based on increased property values due to the park.
‘NID’s a no-brainer’
However, Paul Larios, a Hell’s Kitchen resident and member of the West Side Neighborhood Alliance, said the assessment is minor.
“For a 2,000-square-foot apartment, it’s $150 — that’s a dinner,” he said. “It’s so small. It’s a no-brainer. Thirty-seven fifty for a 500-square-foot studio — that’s like a tip for dinner.”
But West Villager Jonathan Kuhn said he felt the city should be providing more money to parks. In 1958, 2 percent of the city’s budget went to parks, he noted, while today it’s less than one-quarter of 1 percent.
Kate Bostock, a Jane St. homeowner, spoke strongly in favor of the NID.
“We need this,” she said. “My family uses the park on a weekly basis. My kids love the Jane St. water-play pier. My husband runs in the park. I walk the dogs there.”
Bostock said she felt people’s concerns about the state of Pier 40 and the Trust’s repeated failures to find a solution for it had created a sense of “mistrust” among the NID’s critics about how the money would be allocated.
Public response at the Chelsea outreach meeting was reportedly more enthusiastic.
Wils: ‘We need money’
In a subsequent interview, Madelyn Wils, president and C.E.O. of the Hudson River Park Trust, said the NID would be a key part of helping solve the park’s financial problems.
“This would make a huge difference for the park — to be self-sustaining,” she said.
There are other areas the Trust hopes to get revenue, or more revenue, from, including Pier 57 and Pier 76, as well as Pier 40, the latter which already does generate millions of dollars for the agency thanks to its parking operation. Hudson River Park is supposed to be economically self-sustaining, and these designated “commercial nodes” within the park are intended to help do that.
“We need money, many things, to make this park self-sustaining,” Wils said. “But the NID would be the biggest boost for readily available funding in the immediate future, which is what the park needs.”
‘Pier 57 no cash cow’
Pier 57, a former city bus depot pier at W. 17th St., is slated for development under a plan by Young Woo that would include a market and entertainment complex. But the pier’s footprint isn’t that large.
“Pier 57 is not going to be an enormous cash cow,” Wils said. “The projections are not large — it would be $1.5 million to $2 million a year when they open.”
The Pier 57 plan still has to go through the ULURP and bidding process, so it would be a minimum of two and a half years before construction there is completed.
As for Pier 76, at W. 36th St., currently used as a city tow pound, the Trust wants to change the park act so that the Trust would control the whole pier, along with its revenue. Currently, half of the pier is slated to be developed as park with the city retaining control of the other half, about 2 acres, which would be developed commercially, with the city keeping the revenue.
However, Pier 40, a 15-acre pier, by dint of its huge size, holds the most revenue-generating potential. Half the pier must be kept for open-use park space, so that leaves 7.5 acres for commercial development.
C.B. 2 Chairperson Gruber is a strong supporter of the NID.
“I think it’s good for the people that live near the park and it’s good for property values,” he said. “It’s $75 a year per 1,000 square feet — it’s not a costly amenity.”
Proactive park protection
While eight or nine other BIDs are organized around parks, most of those were started to revive parks that had already fallen on hard times. The Hudson River Park NID would save money in this regard, Wils said.
“This is the first one that we’re trying to do before that park falls apart,” she said. “It costs more to restore a park than to maintain it.”