Mayor flirting with buying B.P.C.


By Julie Shapiro

After grabbing Governors Island and Brooklyn Bridge Park from the state, Mayor Bloomberg has now set his sights on a new acquisition: Battery Park City.

Bloomberg’s office asked Comptroller John Liu earlier this year to study the feasibility of taking over Battery Park City, which is now under the state’s jurisdiction, Liu told reporters at his office last Thursday.

“The mayor has sought to regain control of Battery Park City,” Liu said.

The city has long had the option of acquiring Battery Park City from the state for just $1, and Liu’s comments confirmed speculation that the city has begun to seriously consider doing so. Liu said he had not decided whether the takeover would be beneficial to the city.

“We’re certainly examining the pros and cons,” Liu said. “Not all the issues are fleshed out yet.”

The biggest advantage of a takeover is that the city would receive all the revenue that flows from the neighborhood each year in property taxes and ground rents. On the other hand, the city would also have to assume the neighborhood’s $1 billion in debt and would face additional maintenance responsibilities.

Liu said he wanted to hear from Battery Park City residents and commercial tenants before he made a recommendation.

“No decision is imminent,” he said, “but obviously my office is going to listen to the concerns of all parties involved very thoroughly.”

Andrew Brent, spokesperson for the mayor, said in an e-mail to Downtown Express this week that the discussions are “far too premature to comment on.”

Bill Thompson, the new chairperson of the B.P.C.A. and former city comptroller, did not comment.

Assembly Speaker Sheldon Silver, who represents Battery Park City, sounded cautious about the idea in an interview last Friday.

“This is not something that can happen overnight,” Silver told Downtown Express. “It’s something to consider…. I would talk to residents, talk to businesses out there, see how they feel, what certainty and security they have in that kind of a change.”

Silver said the authority has been being responsive to residents, especially at Gateway Plaza, where Silver has negotiated deals with the authority and owner The LeFrak Organization extending rent protections until 2020. Silver added that the authority still has several big projects on its plate, including the new K-8 school opening this fall and the proposed pedestrian bridge across West St. at W. Thames St.

Silver, who would not have direct jurisdiction over a transfer, said the mayor has not approached him to ask what he thinks.

City officials also have not spoken to Jim Cavanaugh, president and C.E.O. of the authority. Cavanaugh sounded skeptical that the city would decide to buy back the 92-acre neighborhood, noting that former Mayor Rudy Giuliani had considered the possibility as well but took no action.

Cavanaugh said the authority had no official position on a takeover, but he defended the authority’s current staffing levels and mission.

“For the next two years, the staff is pretty busy here,” Cavanaugh said.

Major projects include building the new Asphalt Green community center, repairing the seawall, and redeveloping Pier A, which the authority is leasing from the city for 49 years. Much of that work will be winding down in two years, and Cavanaugh said the authority would likely reduce its staff at that point, shifting more toward managing the neighborhood than developing it. But if the authority cut staff now, “We would be shortchanging the projects we are working on,” Cavanaugh said in a phone interview.

One of the strongest proponents of the city buying back Battery Park City and disbanding the Battery Park City Authority immediately is Charles Urstadt, the authority’s founding chairperson.

“The job’s finished,” Urstadt said this week. “They’re scratching around for things to do.”

A developer could finish building the community center, and the city could build the bridge over West St., Urstadt said. As for the landmark Pier A, Urstadt repeated his view that “a well-placed tsunami would be the best thing to do down there.”

Urstadt argues that city has nothing to lose in taking over Battery Park City — the city would gain a revenue-producing asset and could offset the $1 billion in debt by selling the neighborhood’s commercial property. The city would also save some of the money that now pays for the authority’s operation, including $900,000 a year in rent, $1 million a year for insurance and $2.2 million a year for the authority’s law department, according to authority figures.

“This is good news,” Urstadt said last week when told of the comptroller’s comments. “It would be for the benefit of the city.”

Cavanaugh, though, said the equation is more complicated than Urstadt’s description. The World Financial Center, Battery Park City’s largest commercial property, may not fetch a good price, because the tenant, Brookfield Properties, is locked in at a below-market ground rent for the land beneath its four office towers, Winter Garden and connecting passages. Brookfield now pays $21.5 million a year for the land, and in 2014 the rent will drop to $17 million a year through 2069, Cavanaugh said in an e-mail. Cavanaugh added that Brookfield could block the sale of the W.F.C. land to a private company.

Urstadt replied that he still thought the city could find a buyer for the World Financial Center land, along with the land beneath the Goldman Sachs headquarters.

“Everything’s got a market and everything’s got a value,” Urstadt said.

Gov. Paterson removed Urstadt from the B.P.C.A. board last month, perhaps because of Urstadt’s consistent calls to disband the authority, whose members are appointed by the governor.

If the city takes over Battery Park City, they would likely keep the B.P.C. Parks Conservancy, which maintains the neighborhood’s 36 acres of public space. The authority’s $28.6 million annual operating budget includes $8.3 million for the conservancy, plus another $2.7 million that goes mostly to the Parks Enforcement Police officers who patrol the parks, Cavanaugh said.

The authority also spends about $800,000 a year on services like trash removal, street light repair and the Stuyvesant Community Center, and another $800,000 on cultural events and programming.

“All this accounts for nearly half of B.P.C.A.’s operating budget,” Cavanaugh said in an e-mail to Downtown Express, “and would be the same regardless of who provided the services, unless of course the services were reduced.”

One specific example is trash pickup: The authority manages centralized trash compactors where buildings bring their garbage. As a result, Battery Park City is likely the only neighborhood in New York with no trash bags sitting on the curb awaiting pickup. If the city took over, it is an open question whether such specialty services would be maintained.

“That alone I don’t think is make or break,” said Tom Goodkind, a Community Board 1 member and longtime neighborhood resident. “But that coupled with 10 or 12 other items that the authority would deal with in a different way than the city does [could] bring down the allure of Battery Park City over time…. It’s a question of how they’re going to maintain it.”

Eric Wallace, a Battery Park City condo owner, who has criticized the authority in connection with the ground rents all neighborhood residents pay, said that while the authority offers many services, it also brings an oft-unnecessary layer of bureaucracy. Wallace would not want to see a reduction in services, but he wonders if the city could provide the same services more efficiently.

“It’s at least worth a debate,” Wallace said.

With reporting by Josh Rogers