Battery Park City Expansion

[NoyokA]

The Slatin Report:

NYC 10 27 05

EXTEND AND BLEND

Peter Slatin

Should Battery Park City be privatized?

It's certainly a hell of a lot more than a $64 million question. And it's what Charles J. Urstadt, who was appointed by New York Governor Nelson Rockefeller as the first chairman and CEO of the Battery Park City Authority in 1968, thinks should happen. Urstadt, who rejoined the BPCA board under Governor Pataki as vice chairman, called for the state-controlled authority to put at least the commercial components of the 92-acre parcel up for bid, placing a value on the property of $3 billion. Floating the idea in a speech at a dinner in his honor – and on his 77th birthday – held by the Steven L. Newman Institute, Urstadt then called on the city and state to extend the existing Battery Park City another 2,000 feet to the north. Urstadt put the cost of such an exercise at $300 million, barely denting the profits from the net lease of the original property.

The idea would be to enter into a master lease for the existing site, allowing the revenues from ground rents paid by commercial office and residential developers to flow to the leaseholder, similar to the deal that was struck between the Port Authority and Larry Silverstein for the World Trade Center site.

With millions of square feet of office space held by Brookfield Properties and thousands of rental and condominium units developed by leading New York real estate companies, from LeFrak to Related to Albanese, the site offers a veritable garden of blue-chip cash fountains for potential investors, from private-equity players to REITs to institutions.

So what would New York State, which controls the authority, get out of doing such a deal – or deals? The Battery Park City pie could be sliced up into residential and commercial neighborhoods and net leased to different developers or institutions.

To start with, a big chunk of change to get at that cash flow. In 2004, Battery Park City paid $130 million in surplus to New York City; Urstadt believes that figure could rise to $200 million in the next few years. And perhaps even more tantalizing is the prospect of having a big chunk of liability removed from its balance sheet when the lease is assigned.

"The state or city shouldn't control it," Urstadt told The Slatin Report recently. "They should take the money out of it and continue to own the land. It should be privatized the way the Port Authority privatized the World Trade Center."

James Gill, who was appointed chairman of Battery Park City by Governor George Pataki, was – to put it mildly – cautious about the privatization option.

"It's a long way off," he told The Slatin Report. "A long way off."

The prospect brings up a host of questions. Would the current system of payment in lieu of taxes (PILOT), that private-sector developers participate in at the site, be converted to typical taxes? If so, how would that change their tax burdens?

Of primary concern would be preserving the integrity of the Battery Park City's award-winning and very popular public spaces. These occupy 30 of the 92 acres and are paid for from the rental stream – and also add tremendous value to the site. A private owner would be sorely tempted to divert some of that stream into other uses.

Another issue: the city's share of the spoils. According to Urstadt, the site is owned 50-50 by the state and city; although the state has a master lease, the city is not likely to let a deal pass without partaking.

Urstadt, a major Republican supporter, heads publicly traded REIT, Urstadt Biddle Properties, formed from a family fortune in real estate holdings. He self-published a book, Battery Park City: The Early Years, , detailing what he describes as the battle to get the project going in the late 1960s and early 70s as city and state, Democrat and Republican interests battled for control.

The 40-year effort to build Battery Park City, which should be concluded at the end of this decade as development of the last site is completed, saw gradual evolution and dramatic change in design philosophy, political leadership and market conditions. The site's placid facades and graceful parks belie the bitter, contentious infighting that often ruled the process. But its present success has arrived as much in spite of rather than because of that process. Markets and tastes have come to match what Battery Park City has to offer, and Battery Park City has been allowed to adapt to changing values in both realms. Whether that holds any lessons for its sister public development across West Street, whose excavation in the 1960s provided almost one-fifth of Battery Pak City's landfill, and the redevelopment of which is beginning to define contention, remains to be seen.

[pianoman11686]

Last updated: May 18, 2007 07:49am

Urstadt Calls for 50-Acre Battery Park City North

By Katie Hinderer
http://www.globest.com/news/909_909/.../160761-1.html

NEW YORK CITY-Charles Urstadt, vice chairman of Battery Park City and chairman of Urstadt Biddle Properties, spoke at the Associated Builders and Owners luncheon on Thursday and called for the creation of Battery Park City North. Although he admits that there is a five-in-one chance that the project will never go forward.

As the man that oversaw the creation of Battery City Park, and is often dubbed the “father” of the project, he told attendees that the city needs another space that can be developed to handle the city’s projected expansion. The current Battery City Park is composed of 93 acres, with 9,000 residential units and six million sf of office space. But with all the sites built out or spoken for, Urstadt told attendees that the Battery Park City Authority has no future--a problem which can be remedied by expanding both south, to Battery Park, and North, to the Holland Tunnel.

He estimates it would cost $75 per sf to create the 50 acre site he is talking about by dredging the river and using dirt from several Downtown office high-rise projects. And he argued, the process would be easier this time around as the people and knowledge are already in place since the first phase has now been completed.

But creating a large northern expanse of Battery Park City would be a significant investment, and one Urstadt said the city government could not take on. Selling bonds might be able to get the project done, but it’s uncertain. His suggestion? Privatize the whole project. He estimated the whole 143-acre site could sell for $3 billion.

Opposition to a plan like this would abound, according to Urstadt, who has already taken this idea to Mayor Michael Bloomberg. Community groups that do not want to be privately owned, and environmentalists, he said would be the hardest battle to overcome. “But like a turtle, you can’t get anywhere unless you stick your neck out,” Urstadt told attendees.

The Gov. Eliot Spitzer and Assembly Speaker Sheldon Silver would need to be convinced of the need for the project. “There needs to be a threat,” to push it forward, Urstadt said. He suggests that “threat” could be the loss of downtown’s vitality as a financial hub. Faced with the option to build more to secure Manhattan’s status in the financial industry or let it slip away, Urstadt said progress could then be made.

But he ended by saying that this would be a 10-year process once it got up and running and he wasn’t the man for the job.

Copyright © 2007 ALM Properties, Inc.

[MikeW]

They could extend it all the way up to Chelsea Piers.

[lofter1]

Yeah, sure, and bring in even more fill -- pile it up all the way across to Jersey and over to Staten Island ...

Let the course of the Hudson shift over to the East Side ... after all, we don't use that damned River for much of anything nowadays, so let's just fill it all in.

Towers all the way from Hudson Yards to the Palisades

And all the way up to Urstadt's front door ...

[brianac]

October 16, 2007
Man’s Vision to Carve Prime Real Estate From Hudson River Proves a Tough Sell
By PATRICK McGEEHAN


Charles J. Urstadt has long aspired to add 40 to 50 acres of landfill in the Hudson River and develop a second Battery Park City.

Developers have long argued that you cannot go wrong buying waterfront land because no more is being created. But Charles J. Urstadt’s dream is to extend Lower Manhattan a little bit farther into the Hudson River.

Having overseen the creation of the landfill in the 1960s that became Battery Park City, Mr. Urstadt believes it can be done again. And he refuses to drop the idea, no matter how far-fetched others may find it.

Mr. Urstadt, who was the first chairman of the Battery Park City Authority after it was created in 1968 and is now its vice chairman, has for years been advocating the potential benefits of adding 40 or 50 acres to Lower Manhattan. As a champion of filling in more of the river, he has stood nearly alone and attracted scant notice.

But lately, some New Yorkers wary of even the slimmest possibility that this notion could take hold have started paying more attention.

“I hadn’t really taken it seriously,” said Julie Nadel, chairwoman of the waterfront committee of Community Board 1. “People say to me, ‘That’s a silly idea.’ But I’ve seen sillier ideas than that happen. This could be one of those ideas.”

So, Ms. Nadel, who also has a seat on the board of the Hudson River Park Trust, a state authority that is redeveloping the West Side waterfront, has scheduled a public discussion of Mr. Urstadt’s proposal when her committee meets on Monday. Environmental advocates including Marcy Benstock, the executive director of the Clean Air Campaign, are expected to rebut the idea as a threat to local marine life.

“Building in the river is ruinous public policy,” Ms. Benstock said in an interview on Friday. “The stretch of the river just north of Battery Park City is a crucial habitat for sustaining fisheries up and down the whole East Coast.”

Richard N. Gottfried, an assemblyman from Manhattan who sponsored the Hudson River Park Act, called Mr. Urstadt’s idea “outrageous.” He said that law prohibited using landfill in the river between Battery Park City and 59th Street.

“This idea keeps rising from its coffin,” Mr. Gottfried said.

Such strident criticism does not seem to faze Mr. Urstadt. He says he has heard it all before, in the 1960s and 1970s, when he was the point man for Gov. Nelson Rockefeller’s audacious plan to create Battery Park City by filling in almost 100 acres of the Hudson.

Mr. Urstadt, who is now 78, is chairman of Urstadt Biddle Properties, a company based in Greenwich, Conn., that owns shopping centers throughout the Northeast.

He served as chairman of the state authority that was created to develop and run Battery Park City from late 1968 until 1978. Gov. George E. Pataki then reappointed him to the authority’s board in 1998, a perch he has used as a platform for his campaign for more landfill.

He recently pitched his idea in a meeting at City Hall with James Whelan, the chief of staff to the deputy mayor for economic development, Daniel L. Doctoroff. Mr. Whelan suggested that Mr. Urstadt first seek the backing of the governor, Mr. Urstadt said.

Mr. Urstadt admits that even Mr. Pataki dismissed the quest as futile because of the inevitable opposition from environmental groups. But Mr. Urstadt maintains that those arguments could be countered again, as they were during the planning of Battery Park City.

“What’s their rational reason to oppose this?” Mr. Urstadt said, referring to environmental advocates. “To my knowledge, we didn’t kill one fish in creating Battery Park City.”

The original development is the cornerstone of the argument for expansion, Mr. Urstadt said. Battery Park City, he argued, has been a roaring success. Its high-rise apartment buildings house more than 9,000 residents, and it has more than nine million square feet of commercial space, including the headquarters of Merrill Lynch and American Express.

Critics of the authority point to its abandonment of a plan to set aside equal shares of its units for wealthy, middle-income and low-income tenants. Most of its residents now pay market rates.

Each year, the authority, which collects payments from building owners in lieu of property taxes, turns over more than $100 million to the city government. That amount could increase significantly if the space for more development were created, Mr. Urstadt said.

“It’s economically desirable,” he said. “We can create that land for $75 a square foot. Depending on what you put on the land, it’s worth $2,000 to $3,000 a square foot.”

What Mr. Urstadt says should go on the 40 or 50 acres of landfill is a mix of residential buildings, commercial space and parks, similar to the makeup of Battery Park City. His idea involves filling in a swath of the river, about 1,000 feet wide and 2,000 feet long, with sand dredged from the bottom of Lower New York Bay. Until recently, he said the landfill should stretch north from the upper edge of Battery Park City.

A few weeks ago, however, when he was on his way to meet with Mr. Whelan at City Hall, Mr. Urstadt spotted a formidable obstacle. The Hudson River Park Trust had begun rebuilding Piers 25 and 26, which extend into the Hudson just north of Battery Park City.

Mr. Urstadt said he immediately recognized that this development posed a problem for his plan, but not an insurmountable one. The simple solution, he said, would be to shift the site of the landfill several blocks to the north.

So, on the fly, he decided the landfill would have to be between the rebuilt piers and Pier 40, near Houston Street. It would cross over the Holland Tunnel tubes, but Mr. Urstadt did not flinch because Battery Park City sits atop the tubes of the PATH train.

This proposed landfill would not be contiguous with Battery Park City, making it a separate property rather than an extension. Mr. Urstadt, however, believes it still should fall under the jurisdiction of the Battery Park City Authority.

Some supporters of Mr. Urstadt’s proposal to expand Battery Park City were surprised to learn of this revised plan last week. James Gill, the chairman of the Battery Park City Authority, said he “would be in favor of extending our boundary to the north” by as much as 2,000 feet, but he said he did not know that Mr. Urstadt had laid out an alternate vision to Mr. Whelan.

“What Charlie is talking about is a totally different thing,” Mr. Gill said. “He’s talking about another Battery Park City.”

Indeed. Mr. Urstadt dubbed it Battery Park City North.

Some people who know Mr. Urstadt described him as stubborn, but a longtime friend and colleague, Robert R. Douglass, said Mr. Urstadt was simply a determined optimist.

Mr. Douglass, the chairman of the Downtown Alliance, a group supporting the redevelopment of Lower Manhattan, helped Mr. Urstadt hatch the expansion idea and has endorsed it for several years. He said opposition was so automatic that he had never bothered to seek support from other directors of the Downtown Alliance.

“When it comes to any fill at all in the water, it’s almost like a red light that stops any real discussion of it,” Mr. Douglass said.

Except for Mr. Urstadt, who barrels on.

“It’s just an idea he wants to keep alive,” Mr. Douglass said. “Hopefully, someday somebody will buy into it.”

If so, Mr. Urstadt could start talking up another idea he has cooking: “How about filling in the Harlem River?” he mused. “It doesn’t do any good. The only thing it’s used for is the Circle Line.”

Copyright 2007 The New York Times Company

[TonyO]

^ This is not a crazy idea. Lower Manhattan's coastline is largely man-made.

[lofter1]

A commenter at CURBED pointed out that the law which established the Hudson River Park FORBIDS more landfill along the river there ...

[Derek2k3]

It also says it in the article.

[ASchwarz]

A commenter at CURBED pointed out that the law which established the Hudson River Park FORBIDS more landfill along the river there ...

Then change the law, or change the definition of Hudson River Park.

This is a recent law, and I don't doubt it can be amended (though there will be inevitable kveching from the usual suspects, a few of which are mentioned in the article).

[Tectonic]

Always wondered why BPC was extended since its so successful.

[MikeW]

In any case, this probably couldn't be done without some sort of state level legislation being passed anyway, so including a reversal of this law wouldn't be any bigger of a problem than getting it through in the first place (which would be a huge problem)

A commenter at CURBED pointed out that the law which established the Hudson River Park FORBIDS more landfill along the river there ...

[lofter1]

Definitely coudn't change the law without the help of Speaker Sheldon Silver -- who happens to represent the district where this sits.

ergo: It will never happen while Silver is in office.

[Dynamicdezzy]

What happened??? I thought I opened the thread and posted the above articles???? Why was I removed?

[ASchwarz]

Definitely coudn't change the law without the help of Speaker Sheldon Silver -- who happens to represent the district where this sits.

ergo: It will never happen while Silver is in office.

Assuming he doesn't support it. I don't see why he couldn't be convinced to support new parks, schools, affordable housing and public investment in his district.

[TonyO]

Assuming he doesn't support it. I don't see why he couldn't be convinced to support new parks, schools, affordable housing and public investment in his district.

I agree. However, no matter how much sense it makes he would hold his support out until the absolute last minute where everyone else bends over backwards to convince him.