Hudson River Park Trust should be converted into an “authority” like the BPCA

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Pier-40Update March 20, 2013

In response to our essay, below, politicians got off the fence and have decidedly spoken out against allowing residential building within the Hudson River Park. According to local news, “Assemblymember Richard Gottfried, who the only local politician who had been receptive to the possibility of allowing housing at the West Houston St. pier, declared the residential option now should be “off the table” because of “adamant opposition.””

March 17, 2013 By Steven E. Greer, MD

The Hudson River Park Trust (HRPT) was created in 1998 after other grand plans for the area along the West Side Highway, such as “Westway”, never came to fruition. Governor Pataki signed the Hudson River Park Trust Act legislation, which made the HRPT a self-sufficient entity that earns revenue from leased properties, such as Piers 25, 40, 57 and Chelsea Piers. However, the HRPT was specifically prohibited form issuing debt in the form of bonds.

The HRPT is very similar to other New York State “authorities”, such as the neighboring Battery Park City Authority (BPCA), with a few major differences. The HRP Act also specifically prevents the construction of residential buildings. Residential projects are far more lucrative than commercial real estate projects, and generate higher quality tax revenue. The BPCA, which does have residential buildings, earned $236 Million in lease revenue, and was able to raise an additional $121 Million from new bonds, in fiscal 2013.

The HRPT can do none of that, so the key property at Pier 40 is in crumbling disrepair. Should the HRPT have BPCA envy and try to morph into a true “authority”?

The HRPT is generating controversy on two fronts. Pier 40 and its ballfields have two competing real estate groups fighting over the right to develop it, at a profit. The other scandal brewing is related to a controversial new way to tax New Yorkers who live in a five-mile swath of land along the West Side Highway, by using a “Neighborhood Improvement District” (NID) tax. Combined, the HRPT is in the middle of some very convoluted, complex, and agenda-driven messes so typical of the worst of New York City local politics.

The HRPT leadership, most visibly led by the HRPT President and CEO, Madelyn Wils, has been noncommittal toward either of the proposed Pier 40 development projects, and has not been adamantly in favor of the NID tax. Sensing chaos in a leadership vacuum, the billionaire sharks smell blood in the water.

Douglas Durst and his Durst Organization (With the most notable project being the developer of the new World Trade Center) wants to convert Pier 40 into a commercial office space, maintaining the ballfields. The NID Tax was also his brainchild when he served on the board of the fundraising arm of the HRPT (He has since resigned in protest). His plan, and the NID tax, is supported by State Assemblywoman Deborah Glick.

A different group of billionaires, led by hedge fund moguls Michael Novogratz and Scott Lawin (who used to work with Novogratz at Fortress Capital), who are both on the board of the HRPT fundraising arm, want to convert Pier 40 into something more like the BPCA, with residential buildings, and a different idea for the ballfields and sports complex. Their plan would require the HRPT Act to be amended in Albany. This camp is less wedded to the NID tax.

Which of these Pier 40 plans will proceed, and whether the NID tax will be adopted by City Council, are completely uncertain because the HRPT lacks clear leadership. The CEO, Madelyn Wils, who reports to the HRPT Chairwoman Diana Taylor (Mayor Bloomberg’s domestic partner), has been unwilling or unable to take a stand on any of the important decisions that have to be made.

The HRPT seems downright schizophrenic at times. On one hand, former HRPT member Doug Durst resigned from the HRPT in protest over leadership, but yet the HRPT still supports his NID tax. On one hand, the HRPT cannot support residential building projects projects, yet the new Chairman of the HRPT fundraising committee is the leading proponent of that type of plan. Muddling the process even more is an extra layer of bureaucracy created with the 1998 HRP Act, that establishes a 51-member Hudson River Park Advisory Council to oversee the HRPT.

The Durst and Novogratz groups are not the first to attempt to develop Pier 40. In 2002, several proposals and bids were evaluated, but nothing was approved. In 2005, the entertainment group Cirque de Soleil wanted build and theater and complex, but that too did not materialize.

There is a good reason that every attempt to rebuild Pier 40 over the decades has been shot down. The HRPT is a poorly designed entity that cannot lead. It should be dissolved, and in its place should be a new “authority” capable of building residential properties and issue bonds, such as the BPCA does currently. The Hudson River Park Trust needs to come down with a bad case of BPCA envy.

Durst = Glick = NID tax to Tribeca

Pier 40 board member buys adjacent St John’s complex

Tribeca CB1 discusses Hudson River Park NID Tax

The long unsuccessful history of attempts to fix Pier 40

Conflicts of interest exposed between CB1 Tribeca and NID tax groups

Open Letter: The Hudson River Park Tax

Opposition to the Hudson River Park NID tax

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