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Essay, Opinion February 2, 2013 By Steven E. Greer, MD
After decades of throwing cash into the money pit called Pier A in the southernmost tip of Manhattan, the City of New York managed to unload this headache onto the Battery Park City Authority in 2008. The BPCA, then headed by Chairman James Gill and CEO James Cavanaugh, agreed to take on the task of renovating the outer shell of Pier A, ostensibly because local residents were complaining about the appearance.
The BPCA, an agency jointly controlled by the city and state, and was also doing a favor to then Governor Spitzer and Mayor Bloomberg by assuming control of Pier A. By removing the costs of Pier A from the state and city budgets, those deficits were thereby reduced. However, it was merely a shell game.
To the BPCA’s credit, under the leadership of Gill and Cavanaugh, they were much more effective than the city ever was at getting Pier A close to being ready for public use. However, under the guidance of BPCA Chairman Bill Thompson and his CEO Gayle Horwitz, Pier A fell behind schedule and over budget once again. Exacerbating the challenges to the project, Gayle Horwitz culled the ranks by firing 19 BPCA staffers with institutional wisdom about construction projects in Battery Park City. (The BPCA is now planning to take the savings from those headcount reductions and parley them into raises for the remaining staff, similar to the recent 45% increase in pay for BPCA employee Anne Fenton)
The deal with the city, back in 2008, was for the BPCA to accept $30 Million in funds from the city’s NYCEDC for the development of the exterior building shell of Pier A, while the Pier remained property of the city. The BPCA was the official agency that awarded Pier A to the Poulakakos family to build a restaurant, with approval from the NYCEDC. An Italian heritage group also submitted an RFP application, but the Poulakakos group won, according to a source closely involved with the process.
The BPCA seemed to bypass the usual level of public discussion about Pier A and the RFP during BPCA meetings. Many in the community, such as CB 1 Treasurer John Fratta, felt that the whole process was intentionally secretive and opaque, and that the decision was a “slap in the face” to the Italian Community who wanted a museum to compliment the nearby Jewish and Irish museums.
Now, the Pier A project has exceeded the capped $30 Million allocated by the NYCEDC and has become a financial liability to the BPCA. At the most recent BPCA board meeting, Donald Capoccia said, “We should never be in this position again.”, meaning that the BPCA should never agree to be on the hook for cost overruns of a project managed by a third party, with that third party reaping the benefits of the revenue upside and having no downside risk to cost overruns. A source close to the BPCA believes that the BPCA does have the right to refuse to continue development past the $30 Million budget cap and return the project to the city. BatteryPark.TV does not yet have the actual contract to view.
The plans of the Poulakakos family to develop Pier A are now also becoming unpopular with the community. They intend to turn Pier A into essentially a “booze cruise” destination for party boats that will likely also bring in tour buses to the quiet residential streets. Tour buses are already a top concern for the district.
The ongoing Poulakakos restaurant expansion, from their origins at Harry’s Steak in the Financial District in the 1980’s into Battery Park City, seems overly ambitious. The son of the family, Peter Poulakakos, is the main visionary and day-to-day head of operations, and his track record is unproven. Their expansion onto Stone Street in the 2000’s included mostly drinking pubs with bar food, and a chain of coffee shops. Now, they have been awarded not only the large Pier A, but also the nearby Battery Maritime Building. In addition, as first reported by BatteryPark.TV, the Brookfield company is reportedly close to allowing them to build a 25,000 square foot food court in the renovated World Financial Center, with the goal of emulating the Eataly or Chelsea Market locations in Midtown.
So far, the Maritime Building restaurant and the Pier A restaurant are years behind schedule, and their Stone Street portfolio of Poulakakos restaurants was dealt a major setback after Hurricane Sandy. The Poulakakos family might be overextended and underqualified to expand into Battery Park City with two new large projects.
Pier A is now a money-losing liability for Battery Park City and the BPCA. It is time to seriously reconsider the fate of Pier A and what is best for the residential setting of Battery Park.
If the Poulakakos family wants to bite off the WFC food court project, then they should be required to return Pier A to the BPCA for another developer to complete. Not only are they possibly spread too thin, and unproven, but their monopoly over BPC would have a chilling effect on any local leader who might want to oppose them.
The BPCA should also consider handing control of Pier A back to the city. City Counsel Speaker Christine Quinn spoke to a group of Wall Street executives and mentioned that New York should diversify away from the reliance on the financial sector, and into technology industries and food industries. Pier A would make for an ideal artisan food market, similar to the New Amsterdam Market in the Seaport. With substandard grocery stories nearby, the demand for a market would be tremendous.