In the 1970’s, the prospect of filling in a corner of New York Harbor for apartment and office towers was so ambitious and poorly timed that Battery Park City nearly defaulted before it even opened. But the neighborhood has since rebounded so robustly that it has become an embarrassment of riches.
It spends more per acre to take care of its parkland than is spent on just about any other city park. Its apartments rent above market rates. And it has given birth to some of the city’s—and even the world’s—first green-certified residential high-rises.
Its treasury is so well stocked, in fact, that the community, which is regularly ridiculed for its seclusion on the far side of West Street, regularly funds nonprofit organizations throughout the five boroughs and well into the suburbs. These are not contributions made voluntarily by residents and tenants, but instead are general revenues distributed by the Battery Park City Authority’s seven-member board, or its staff, from fees and assessments that developers and occupants must pay.
According to data obtained by a Freedom of Information Act request, these contributions come to about $900,000 annually. Over the past two years, for example, the Battery Park City Authority donated $7,000 to the Queens Library Foundation; $10,000 to the American Institute of Architects; $20,500 to the New York State chapter of the National Association of Minority Contractors; $10,000 to the Chinatown YMCA; and $10,000 to the Greater Jamaica Development Corporation.
Giving away public funds to nonprofits is a time-honored tradition in this republic among city councils and state legislatures as well as public authorities. Some people even affectionately call it pork.
But, on Oct. 9, Attorney General Andrew Cuomo criticized the charitable giving of one public corporation in an opinion that could affect every other authority throughout the state. The Long Island Power Authority, Mr. Cuomo wrote, “is not authorized to make payments to business, civic and not-for-profit entities that do not directly relate to LIPA’s mission. …”
Battery Park City Authority has taken another look at its giving, although it has yet to propose changes.
“We are not in a position to comment on the opinion. We are still analyzing it,” the authority’s president, James E. Cavanaugh, told The Observer. “We are obviously going to comply. Our initial take is that we are in substantial compliance.”
Assembly Member Richard Brodsky, a Westchester Democrat, questions why public authorities—whose board members are usually appointed by the governor instead of being elected—are giving away the public’s money.
“These are not set up to enhance the charitable infrastructure of the state,” Mr. Brodsky said. “They are set up to run ports and run subway systems and run roads. A pattern has emerged in some places where the choices are relatively arbitrary choices. It helps to know a board member, for instance.”
Some of these nonprofits do know Battery Park City Authority board members, although officials deny those ties play any role in funding decisions. Historic Hudson Valley, a self-described “museum of historic sites” in Westchester and Dutchess counties, received $19,000 over the past two years. One of its board members is Charles Urstadt, the vice chairman of the Battery Park City Authority.
Another $20,500 over the same period went to the Borough of Manhattan Community College Foundation. One member of the foundation’s board is Leticia Remauro, a vice president at the Battery Park City Authority and the person most responsible for determining the authority’s discretionary giving. The community college foundation’s chairman is Robert Mueller, a Battery Park City Authority board member.
TO DETERMINE WHETHER the Battery Park City Authority’s giving practices, which date back at least a decade, are legitimate requires a clear idea of what the institution’s mission really is. Its 1968 enabling legislation said that the authority was supposed to improve a “blighted area”—some of which was so blighted, one might add, that it was underwater. So the authority was created to borrow money, pour landfill into the river and then lease properties on its 92 acres to developers for apartments and offices. This “major new residential and commercial community,” Governor Nelson Rockefeller said in his signing statement, would contribute to the city’s budget 30 times the tax and rental income the dilapidated waterfront was then paying.
In 1986, an amendment to the original legislation entreated the authority to “promote the employment of minority group members and women” on Battery Park City contracts. In addition, in 2000, the authority’s board (which then consisted of three members appointed by the governor, and now has seven), passed a resolution calling for all subsequent development to be environmentally friendly.
Mr. Cavanaugh, the authority’s president, maintains that those policies justify contributions to programs that train minorities and women for construction and related jobs and to organizations that promote green building. In addition, the authority argues that the grants to Lower Manhattan museums and institutions make the area more vibrant and livable, increasing the prices of apartments and offices and allowing the authority to pass on more money to New York City’s treasury.
“If an organization contacts us for financial support, they have to fit into our written guidelines,” Mr. Cavanaugh said. “We ask, ‘Does it support Lower Manhattan? Does it have projects that provide some public benefit for Battery Park City? Does it encourage the employment of women and minority owned businesses?’”
Historic Hudson Valley, which operates six historic attractions up north, qualified because it runs programs promoting “the preservation of the Hudson River and its environs,” Mr. Cavanaugh said. Mr. Urstadt, who is often called the founder of Battery Park City, took exception to the idea that he had played a role in those contributions.
“Absolutely not,” he told The Observer. “I haven’t exercised any influence or made any requests. I haven’t used my influence at all.”
The Queens Library Foundation received money because it had given the authority advice on setting up a branch, Mr. Cavanaugh said. In the end, however, it will be the New York Public Library that will establish an outpost on Battery Park City property using money donated by Goldman Sachs.
The Borough of Manhattan Community College Foundation has traditionally set aside one seat on its board for an authority officer because the Battery Park City Authority underwrites scholarships for minorities and women, according to Ms. Remauro, the authority vice president who is also a foundation board member. Mr. Mueller, meanwhile, was on the foundation’s board before he joined the Battery Park City Authority, according to the college.
“What my participation on the board makes sure is that the foundation’s money goes to these minorities and women so they can continue their education,” Ms. Remauro said.
Battery Park City’s donations pale in comparison to the approximately $110 million the authority passes on to New York City each year to make up for property taxes the city would receive if the land were not owned by the state. But some affordable housing advocates, who are still smarting over the abandonment of a 1969 master plan that envisioned a neighborhood with equal parts low-income, middle-class, and market-rate apartments, believe the charity is still misplaced.
“There are two things that are very troubling about this,” said Brad Lander, the director of the Pratt Center for Community Development. “The first is that since these are redirected tax dollars, they ought to be spent as part of the state and city’s spending strategy and not by a small board of directors. The second is that they have an unfunded commitment of some $700 million for affordable housing and ought to be using that for a down payment on that commitment.”
Mr. Cavanaugh counters that Battery Park City has made good on its affordable housing commitments, which were made above and beyond the annual tax payments. The problem, according to a 2004 report by the city’s nonpartisan Independent Budget Office, is that the city failed to use almost $600 million of Battery Park City Authority revenues for affordable housing, as it was intended to be.
The authority runs three charity programs, although it admits that it does not advertise them or have a uniform application form. The board, as part of its fiscal year budget that ends Oct. 31, authorized $200,600 to sponsor events, $200,000 for employees to attend fund-raising events and $68,500 for affirmative action scholarships. Ms. Remauro said that she determines whether the requests—which number more than 100 a year—meet the authority’s written criteria, and Mr. Cavanaugh approves them. But the largest recipient of voluntary donations is one that Mr. Cavanaugh does not consider to be voluntary at all: the Alliance for Downtown New York, a business improvement district that covers Lower Manhattan up to but not including Battery Park City.
This annual contribution—it was $432,000 in 2007—is a line item in the budget that gets approved by the authority board. The amount equals the assessment that the authority would be liable for if it were privately owned and part of the business improvement district, Mr. Cavanaugh said. It is justified, he said, because the alliance operates a shuttle bus that runs through Battery Park City and also staffs an information kiosk on Battery Park City grounds. However, Ms. Remauro said that the alliance does not provide other benefits to Battery Park City that it does to its members, such as sanitation services, street furniture and security patrols, since the authority does those itself.
Another $200,000 line item goes to The Battery Conservancy, a private organization that raises money to care for the Battery, which lies directly to the south of Battery Park City.
By contrast, the Long Island Power Authority—the agency that prompted the attorney general’s opinion—gives out about $125,000 a year to nonprofit organizations.
Follow Matthew Schuerman via RSS.