With the credit market frozen, authority looks for cutsWith the credit market frozen, authority looks for cuts


By Julie Shapiro

Volume 21, Number 42 | The Newspaper of Lower Manhattan | Feb. 29 – March 6, 2009

The Battery Park City Authority is considering delaying a neighborhood community center that will be in these residential towers under construction. The YMCA and Asphalt Green are negotiating with the authority to operate the space.

With the credit market frozen, authority looks for cuts

The Battery Park City Authority may delay capital projects like the new community center to save money.

David Cornstein, a board member, suggested the delays after hearing Tuesday that the authority had only about $5 million left in its capital budget.

“I just think it’s time to pull back,” Cornstein said. “In any business there are no capital projects. Everything is on hold until you see what’s going to happen in the economy and what kind of resources you have…. Where you can slow down or delay something, my advice would be to do so.”

Cornstein’s comments came after authority president Jim Cavanaugh said the authority had not succeeded in borrowing the $100 million necessary to replenish its capital budget. The authority tried to borrow the $100 million last fall but did not do so because of the credit crunch, Cavanaugh said.

Cavanaugh hopes the authority will be able to borrow the money soon, but in the meantime, the authority voted Tuesday to use up to $100 million from its operating budget for capital projects. The authority will eventually reimburse the operating budget once the borrowed capital funds come through. The city has signed off on this plan, Cavanaugh said.

In 2009, capital costs will run about $32 million, Cavanaugh said after the meeting.

During the meeting, Cavanaugh listed four major capital projects planned for the next few years: the $27 million community center adjacent to the ballfields; the $25 million new headquarters for the Parks Conservancy at Site 3; a $30 million seawall reconstruction project; and the less expensive reconstruction of Vesey St. for the Goldman Sachs tower.

Under the 2005 agreement the state and city made with Goldman, the Vesey St. work has to be done this year. Also, the Parks Conservancy building is nearly done, but the seawall “is probably something we could look at and slow it down,” Cavanaugh said. “The seawall certainly needs work to make sure that it’s good for the next 50 or 100 years, but whether you did that project this year or two years from now or five years from now may not be that material.”

Cornstein had similar thoughts on the community center, which is going in the base of the residential towers Milstein Properties is building and was supposed to open at the end of 2010.

“If that community center was six months later, life would go on also,” Cornstein said.

Cavanaugh hesitated, then agreed.

When told of the possible delay of the community center, Barry Skolnick, a B.P.C. resident, said since the authority has leftover operating money each year, Skolnick doesn’t see the reason for the delay. But he did not want to criticize the authority without knowing the full picture.

The earlier part of Tuesday’s B.P.C.A. meeting took on a much happier tone as C.F.O. Robert Serpico described the brighter side of the authority’s finances.

The authority generated a $92.7 million surplus last year, and even as the economy crumbled, the authority earned 5.75 percent on long-term investments and 3.02 percent on short-term investments, Serpico said.

“This is extraordinary,” chairperson James Gill said. “There’s not much good news around these days. It’s nice to come here and get a little.”

After Serpico listed more figures, Gill added, “If we were a corporation, they would be carrying the board of directors around the property in chairs.”

But Gill’s chair stayed on the ground during Tuesday’s board meeting, and the euphoric discussion of revenue soon took a turn for the somber as Cavanaugh broached the discussion of the capital budget. Later, Cavanaugh and Steve Harper, the authority’s vice president of safety, detailed a smaller financial problem for the authority: the sharp increase in the cost of Park Enforcement Patrol officers hired from the city.

The authority decided to slightly reduce the size of the PEP force it hires, but even so, the authority will still have to pay more money this year. Last year, the authority paid $1.84 million for 25 officers and six supervisors, plus four seasonal employees for six months of the year. Under the new contract, the authority will pay $2.185 million for 21 officers and five supervisors, plus four seasonal employees for nine months of the year.

Skolnick, the B.P.C. resident, was upset to hear that there would be fewer PEP officers patrolling the parks, particularly after some incidents of violence in the past year.

“There’s an increased population using the parks,” Skolnick said. “If anything, we would need more protection rather than less.”

At the authority board meeting, Harper said the staff reduction would not be noticeable, because the authority would “deploy our resources in a more effective way,” he said. “We’re doing more with less.”

The reason for the cost increase is that the fringe rate for PEP officers, which is the cost of benefits above the hourly wage, has been rising steadily and is now at 45 percent.