By Lincoln Anderson
Facing a growing deficit and with major capital improvement projects — like Pier 40 — needing to be addressed, the Hudson River Park Trust is moving toward designating an independent fundraising entity to solicit private money for the waterfront park.
The group being considered for the role is the Friends of Hudson River Park, a 10-year-old, 501-c-3 nonprofit organization that has been the park’s biggest advocate — but which has also sued the Trust twice.
The idea was announced at the July 22 board of directors meeting of the Trust, the state-city agency that is building and operating the 5-mile-long park between Chambers and W. 59th Sts.
At the meeting, Connie Fishman, the Trust’s president — or top paid staff member — presented the issue to the directors.
In short, Fishman said, the Trust’s annual operating and maintenance budget is projected to have a deficit of $10 million, cumulatively, over the next five years. The park’s annual operating deficit is $1.2 million, and with new sections of the park opening and inflation, operating costs are only rising.
Money from a private fundraising group, Fishman explained, would be used to supplement the park’s operating budget; also to create an endowment of up to $100 million “to protect Hudson River Park’s future”; and to “plug the capital maintenance hole that really has existed since the park was created 15 years ago,” as she put it. In other words, the private group would be able to raise funds for capital projects and “special projects,” such as Pier 40, she said.
The private group’s goal would be to raise about $5 million annually.
Fishman said the Trust is consulting with a pro bono law firm to see if Trust board members would be allowed to serve on the private group’s board. But, she said, really all that’s needed to designate the outside group as the Trust’s private fundraiser would be a change in the Trust’s bylaws.
The Trust, meanwhile, would continue to operate and maintain the park, per the regulations of the Hudson River Park Act of 1998.
Fishman said the idea had been in discussion for the past few months, and that the Trust had asked the Friends of Hudson River Park if they were interested in becoming the agency’s independent private fundraiser, or as she said, “to see if they would be interested in transitioning their purpose into this entity.”
The Friends have created a task force to investigate the proposal, and will hold a board meeting in September, when they will take up the issue. The Trust also meets in September, after the Friends, and it’s hoped that the new arrangement will be in place by the end of the year.
If the Friends reject the offer, the Trust would tackle the issue itself, by creating a different independent fundraising group, Fishman said.
Fishman further said that the Trust would want to “seed” the independent fundraising entity with $250,000 to help it get started — though, she added, $750,000 would really be a better amount for the first year to help the initiative get off the ground.
‘We need more money’
Diana Taylor, the Trust’s board chairperson, indicated she thinks soliciting private funds for the park is a good idea.
“The bottom line is we are not making enough money in the park to pay for all the maintenance,” she said, “mostly because we’ve been unsuccessful in developing Pier 40. So that’s left a huge hole in the budget. This is money that needs to be internally generated — we’re not going to get it from state or local government.”
In a unique arrangement, Hudson River Park is supposed to be self-sustaining; several key economic development “nodes” in the park — including Pier 40 at West Houston St. and Chelsea Piers — generate revenue for the park, which goes to fund its maintenance and operations. The Trust rakes in $15 million annually from the tenants on these designated piers, including the parking operation at Pier 40. Still, it’s not enough.
Park could get ‘schlubby’
“If the park doesn’t get more money, we won’t be able to keep it operating at a high level as it should be, in the way everybody likes,” Fishman said. “I don’t think anyone wants to see the park looking schlubby. One of the things that people like about the park is that it’s really nice.”
Deputy Mayor Bob Lieber, a Trust board member, said the park definitely needs private fundraising.
But Henry Stern, another Trust board member and former city Parks Department commissioner, said the fundraising group would only succeed if its members are high-powered park people.
“In my experience, a great deal of this depends on the effectiveness of the people involved — their connection with the park world, their connection with rich people and potential donors,” Stern said.
At the same time, he noted, “A lot of these have to be indigenous and homegrown people who are really interested in the park.”
Stern said he was leery of the Trust’s committing such a large sum as $750,000 to the independent fundraising group. He added that the group would be more effective fundraising for specific projects and initiatives, rather than for simply maintaining the park.
Regarding Pier 40, he noted the sticking point has been “substantial differences between the Trust and the communities as to what was appropriate development. Basically, the communities wanted minimum development and the Trust was seeking development that would pay for the operating of the park.”
Pier 40 plans failed
Within the past decade, the Trust has twice tried — through two R.F.P. (or request for developers) processes — to find a private developer to fix up the pier and add new uses on it to generate more park revenue. The first attempt saw proposals for the world’s largest oceanarium and a waterborne FedEx operation. More recently, a second attempt saw a plan by The Related Companies for Cirque du Soleil theaters and a Tribeca Film Festival multiplex — dubbed “Las Vegas on the Hudson.” A mix of economic factors, community opposition and the lack of a long-term lease for the pier have combined to sink all the proposals thus far.
Describing the community opposition to the mega-development of Pier 40, Stern said, “You have a Village — and they’re a highly organized constituency, and they don’t want it.”
Board member Franz Leichter, a co-author of the park act when he was a state senator, said the Trust was “on the right track” in setting up a fundraising mechanism. However, he said he was concerned about the fundraising body gaining control over park decisions.
“If you have fundraising and advocacy together, who raises the funds controls the park,” he stated. Another thorny issue, he noted, is that “The advocacy at certain times may involve suing the Trust.”
However, Fishman said, there are different kinds of park fundraising groups. The Central Park Conservancy, which is now 30 years old, has “complete control” of Central Park, she noted, whereas the conservancy for Brooklyn Bridge Park only does the park’s programming.
Chance to give back
Fishman said having a fundraising entity would basically tap into the value that Hudson River Park has added to nearby real estate.
“The park has done a tremendous amount for the neighborhoods that are within a couple of blocks of it on the West Side,” she noted. “There are places there that never would have been built without what the park has been able to do to improve the neighborhood. And I think a lot of those people — whether it’s for large or small amounts — would be willing to be a part of that kind of organization.”
Added Paul Ullman, a Trust board member who lives in the Village: “We’re offering an opportunity for the park constituency — the people that use the park — to support the park, which is something that people are waiting for.”
Friends are ‘very interested’
In an interview after the Trust’s board meeting, A.J. Pietrantone, executive director of Friends of Hudson River Park, said his group’s board “is very much interested in being much more collaborative with the Trust to raise private-sector capital to help the park.
“It’s very much within our mission to be a private fundraiser,” he said of the decade-old group. “It would be more a change of emphasis rather than a change of mission. I think our mission is pretty clear: We exist to see that the park is completed and maintained.”
Pietrantone has been the Friends’ executive director for two years. He said, during that time, he helped persuade the Trust to move away from the idea of creating its own new independent fundraising group and instead move toward working with the Friends.
As for the Friends suing the Trust, Pietrantone admitted it was “a delicate issue.”
However, he said, “I think there’s no way we can raise funds without being advocates.”
Yet, he noted, there have only been two lawsuits, and they’ve both had positive results for the park. The first suit — to get the city’s garbage trucks off of Gansevoort Peninsula, so it can be transformed into a park — has already netted the park $27 million in late fees that the city had to pay the Trust as part of the suit’s settlement. The second lawsuit — over the W. 30th St. heliport — recently succeeded in ending tourist helicopter flights in the park.
“Most of the actions we’ve taken have simply been enforcing elements of the Hudson River Park Act,” he noted. Pietrantone said, with the park three-quarters completed and the Friends poised to become the Trust’s fundraiser, the Friends are now “looking for someone else to take up that responsibility of enforcing the park act.”
Regarding concerns that the Friends would become the park’s de facto operator if they were its fundraiser, Pietrantone said, “I think we’re not interested in running the park, by any means. We’re a small organization. We have six staff.”
He said the Friends, in its new role, would not be known as a conservancy or a partnership, per se, but rather would be what he termed a “designated private fundraising partner.”
Incremental approach
He said it’s realistic to think the Friends could raise $5 million a year for Hudson River Park, plus other single-time donations for special projects. It surely would be a challenge to raise all at once the $50 million to $60 million that’s needed to repair the 14-acre Pier 40’s crumbling and corroding infrastructure. On the other hand, “an incremental approach” would work at Pier 40, he said: Sections of roof could be repaired bit by bit, and, similarly, rusting metal support pilings could selectively be encased in concrete to protect them from the salt water. To fully “repurpose” the pier to accommodate added new uses would cost up to $150 million, he said.
If the Friends show they can help cover the park’s operating costs, the city and state might even be persuaded to kick in money for capital costs, like fixing Pier 40, he opined.
A private fundraising group also might be able to issue tax-exempt bonds for the park, which the Trust cannot legally do, he added.
Showing they can bring in the bucks, the Friends fundraised $25,000 for the maintenance of the Linden Miller Garden in the park’s new Chelsea section. Through fundraising dinners, they’ve raised a total of $60,000 that they’ve given to the Trust over the past two years.
If they are made the Trust’s official fundraiser, they’ll be able to attract a lot more cash, Pietrantone assured. The dollars are out there, he guaranteed.
“I think there is an organized constituency of people in the community who want to see Hudson River Park succeed,” he said. “There are quite a few people of means who are involved in the park. The Mike Novogratzes and Paul Ullmans of the world are on the Trust board and use Pier 40.” Both Novogratz and Ullman are in finance, with Novogratz — a recent gubernatorial appointee to the board — a billionaire. They both have children who play in youth sports leagues on the popular courtyard athletic field at Pier 40.
And while the Friends’ 30-member board currently contains mainly grassroots community activist types, it also has some heavy hitters, Pietrantone noted. Developer Douglas Durst is co-chairperson of the Friends’ board, while Susanna Aaron — wife of Gary Ginsberg, a former top executive at News Corporation — also recently became a board member.
“We began as a group of activists, and have remained a group of activists,” Pietrantone said. “But since I’ve come on board, the people on the board are less connected to the creation of the park. We’ll have room for both the activists and the philanthropists.”
Park improvement district
On a related subject, Pietrantone added that the Friends’ plan to create a Hudson River Park improvement district that would assess a special tax on property owners near the park is still alive. But, he said, they’ve learned from the recent experience of the aborted High Line improvement district proposal, which failed when neighboring residents and property owners balked at the idea of paying a tax just to help the park.
“The High Line showed it can’t just be the park,” Pietrantone explained. “We’re looking into spending resources on greening the east side of Route 9A [West St.], and looking at if we can build a bridge across the highway at a certain point.”
In an e-mail, Noreen Doyle, the Trust’s vice president, said the discussion of private fundraising for Hudson River Park isn’t linked to any decisions about the future of Pier 40.
“Our board has not made any new decisions regarding Pier 40 — that remains subject to separate study,” she said. “I can, however, confirm that no major R.F.P.’s are currently underway.”
