Messrs. Novogratz and Pietrantone enjoying the park. (FHRP/Flickr)

The Friends of Hudson River Park have traded a real estate big for a Wall Street one.

Today, the West Side park booster group announced that Michael Novogratz, head of Fortress Capital, will take over from Douglas Durst, the former board chair, who left last month over a dispute about the future of Pier 40 and the direction of the trust that overseas the park.

Mr. Novogratz has been a board member of Friends for some time now, and an announcement calls him "an avid user of the park." After all, the hedge fund manager and city's foremost wrestling booster lives around the corner in a multimillion-dollar compound he has assembled at 110 Hudson Street in Tribeca.

Mr. Novogratz said he will continue to focus on expanding the donor base at Friends, among the controversial moves that drove off Mr. Durst. Previously, it has been more of an advocacy and oversight group, but increasingly it has been called upon to raise funds for the money-hungry waterfront oasis.

“I am excited to serve as the new Chairman of the Friends,” Mr. Novogratz said in a statement. “The next few years will be a critical time for the Park as we work together to combat the substantial financial and infrastructure challenges we face. My focus will be on expanding the number of donors for the Park’s operations and raising capital funds so that we maintain its status as one of New York’s premier parks.  We also need to make sure that this park, which is so important to the west side community, gets completed in a timely fashion."

The Friends also announced that A.J. Pietrantone, executive director of the Friends of Hudson River Park, will be stepping down, having successfully completed the new integration between the group and the trust. “I am confident that Mike will help to further strengthen and grow our assets, while ensuring a smooth transition for staff leadership as well," Mr. Pietrantone said.

“The Trust and the Friends enter this new phase of cooperation more aligned than ever,” said Madelyn Wils, director of the trust.

Sink or swim. (David Shankbone)

When Sandy swept into the town almost two months ago, Hudson River Park—as its name might suggest—was among the places inundated by the swelling sea under more than a dozen feet of water.

The surge washed over the historic piers and brand-new lawns, filling skate parks, swamping ball fields, submerging mini golf holes and surrounding the merry-go-round. Yet much of the park, in the traditional sense, came through fine."I think we lost only five trees and a few plants,” Madelyn Wils, president and CEO of the Hudson River Park Trust, said at a post-Sandy conference last Thursday.

It was the more manmade features, the development that undergirds the park and pays for its upkeep, that struggled to weather the storm.“The buildings, however, did not fare quite as well," Ms. Wils explains. "We’re still without power, because we are on our own grid, and we’ve had to work on our own to restore that.”

This is only the latest, and in some ways the least, of the troubles on the waterfront, where a bitter disagreement between Ms. Wils and the park's biggest backer, developer Douglas Durst, reveals cracks in the public-private model by which the city’s parks are so often built and maintained these days. These partnerships are both sustainer and straightjacket, leading to the creation of more parks in a generation, but also limited means to keep them up and running. Call them libertarian parks.

On October 29, the very night Sandy hit, Mr. Durst, the iconoclastic developer, was scheduled to appear before Community Board 2 to present a study he had recently paid for out of pocket on the dilapidated Pier 40, the earliest centerpiece of the park.

The 14-acre pier, built just off Spring Street in 1964 as the New York base for the Holland America Line, has more than  2,000 parking spaces along with two massive ball fields. Also home to a kayak launch, two harbor cruises and the New York Trapeze School, the pier is not only an asset for the community, but also for Hudson River Park itself, as it generates some $6 million a year in revenues for the park trust.

But the pier has slowly become a drag on the park, its roof starting to crumble—leading to the closing of a rooftop soccer field and a number of parking spots—and the nearly 4,000 pilings holding up the two-story structure starting to give.

While Ms. Wils and the trust estimate the price of repairing everything to be as much as $125 million, Mr. Durst had planned to go before the community board and argue that the repairs could be made for only $30 million, and that they should be paid for as soon as possible with the trust’s money.

The meeting was rained out, and now Mr. Durst pegs his plan at $44 million, because he believes the central ball fields, along with some other important pieces of the pier’s infrastructure, should be elevated out of the floodplain post-Sandy.

Mr. Durst has long been a staunch advocate for the park, serving since 2002as chairman of the board of Friends of Hudson River Park, an affiliated group that acts as both a fund-raiser and watchdog for the trust that operates the park. He was also its largest donor, giving a total of $2.3 million over that span and frequently buying the biggest tables at the annual fund-raising gala.

Since the summer, Mr. Durst began to float an idea that the pier should be fixed up as soon as possible, with the parking consolidated to the lower floor, and the upper areas turned into office space for tech firms and art galleries. The ball fields and other facilities would remain intact.

Meanwhile Ms. Wils and other Friends board members have been pushing for an approach in which a private developer would come in and pay for the repairs, along with what is expected to be a transformation of the pier. It would no doubt be a grander project, but also a more expensive one, and probably a more privatized one too.

Housing has been bandied about as a sort of panacea—ever since Richard Meier built his Perry Street “lofts,” who wouldn’t want to live on the Hudson River waterfront?—but locals also hate the idea of allowing the park to become some millionaire’s backyard.

That is why Mr. Durst has been pushing his plan for adaptive reuse on his own. It is also why Mr. Durst quit the Friends board last week. His name has already been wiped from the advocacy group's website, along with that of vice-chair Ben Korman, who used to run the parking at Pier 40 and also quit the board in protest.

“There was a difference of opinion of the direction that the park should go in,” Jordan Barowitz, a spokesman for Mr. Durst, told The Observer on Friday. “Douglas is still deeply committed to the park, but given his difference of opinion from the leadership of the park, it became impractical for him to continue with the trust and with Friends.”

One person close to the situation said this amounted to “a pissing match” between Mr. Durst and Ms. Wils, who was appointed president and CEO of the trust in June 2011. “He’s taking his ball and going home,” said the source.

But in many ways, the pair, who both share a passion for the park and its future, would not even be having this fight if Hudson River Park were not so desperate for funds, a conundrum that is at the very foundation of the park's creation.

It goes without saying that every open space needs money coming in, but for Hudson River Park, it is especially crucial. This is, after all, one of the first public-private, or “self-sustaining,” parks created in the city. Championed by Governor Pataki and launched through an act of the Legislature in 1998, Hudson River Park has become a popular model for fostering new parks, particularly for the Bloomberg administration.

The public-private model has taken hold everywhere from Governors Island to the High Line to Brooklyn Bridge Park, the idea being that the government pays the up-front costs of getting the parks built, but after that it is up to quasi-public agencies to keep them up and running, usually through a mix of commercial activities and fund-raising.

It is a controversial arrangement, since it can often mean that what was once public space must now be given over, at least in part, to private interests. But many supporters of the model, especially in this age of fiscal austerity, argue that without such arrangements, the parks would never get built at all. Those privatizers are winning for now.

On Monday, Brooklyn Bridge Park announced it was seeking developers for the third apartment complex to be built on public land on John Street, within the waterfront park, while a competition earlier this year to develop housing at Pier 1 attracted some of the city’s top builders. On Wednesday, prospective tenants for historic buildings on Governors Island, ranging from local chefs to national chains, will tour the island, hoping to open up shop in one of the 48 pre-Civil War structures. And when the third section of the High Line broke ground in September, nearly one-third of the construction funds came from the Related Companies and Oxford Properties, which are developing the Hudson Yards project the elevated park will surround. All of them are hoping to cash in on the parks, which will benefit the public too, but the question remains: who benefits more?

This is not how it always was. Look at the original urban park, Central Park, which was developed in part to buoy real estate values uptown, but was largely paid for and maintained by the public, as a public benefit that subsequently paid for itself through rising property values.

The Bloomberg administration last year touted the $2 billion boom that resulted from its $150 million investment in the High Line. But the city contributes almost nothing to the ongoing operations of the park—easily the most expensive for a park of its size, with a $9 million annual budget.

In 2008, The Regional Plan Association did a study that found the Greenwich Village segment of Hudson River Park had generated $200 million in economic development while only costing $75 million to build up to that point. Yet very little of that money was reinvested in the park. Meanwhile, capital funds from the city have fallen from a high of $42 million in 2008 to only $7 million this year, due to recessionary cuts at City Hall. Operating expenses for the park are roughly $14 million a year, almost all of it coming from the trust.

“The biggest thing that concerns me is that Hudson River Park was the first in this new, quote-unquote sustainable park model,” Holly Leicht, executive director of advocacy group New Yorkers for Parks, said in an interview. “What we’re seeing right now is not very reassuring for this model.”

This debate is at the heart of the fight between Mr. Durst and the rest of the park’s leadership. He wanted up-front investments to protect the park, while other board members wanted the private sector to pay—perhaps rightly so, since the park could barely afford even the $30 million-to-$44 million tab Mr. Durst had touted.

“If it was up to me, not one more dime goes into Pier 40,” Diana Taylor declared at a recent board meeting. “Period.” (In addition to being a Friends board member, Ms. Taylor is, of course, Mayor Bloomberg’s girlfriend and in some ways his surrogate.)

The problem is that the legislation that created the park—by virtue of it being the first—is the most restrictive of the public-private parks in the city. It limits residential and certain other types of development and caps leases at 29 years. In comparison, more than 1,000 apartments will be built as part of Brooklyn Bridge Park, with leases up to 99 years.

The trust has been lobbying Albany for years now to relax the restrictions, often to fierce outcry from locals, who oppose most forms of new development. (It’s the Village and Soho, after all.) So far, everything from an outpost of Cirque du Soleil to a Major League Soccer stadium has been proposed, but all have been sunk by neighbors.

The trust insists it does not favor housing, it simply wants that as one of the options on the table. “The community needs to understand that if they want a park, they need to be willing to do what it takes to maintain a park,” Ms. Wils told Crain’s in May, when she unveiled plans for a 115-room hotel and 800 apartments on the pier—but with expanded open space as well, a palliative to all that development.

“It’s never what you want to do, for sure,” said Rob Pirani, a vice president at the Regional Plan Association and member of the Governors Island Alliance, that park’s watchdog. “It’s the difference between a real estate project and building a neighborhood.” But he also conceded that without the public-private partnerships, public officials might not have agreed to underwrite these parks in the first place.

Meanwhile, the entertainment complex Chelsea Piers, the other big money-maker for the trust, has sued, alleging two decades of deferred maintenance on its piles. The repair costs have been estimated at $100 million, a price the trust could hardly afford. (The fact that there is an expensive place for people to rock climb, ice skate and drive golf balls on what is ostensibly public land, meanwhile, gets at the heart of the problems with this type of park. It’s a nice amenity for the neighborhood, but only for those who can afford it.)

There is some hope on the horizon, as the park’s third major commercial project, Pier 57, is finally getting underway after years of delays. Young Woo, a hip downtown developer, has teamed up with designers Lot-Ek, known for building with shipping containers, to transform the pier into an artisanal market. Cute, but again, commercial. There will be a public walkway around the pier and expansive open space on the 1.6-acre roof—but there would be even more public space without those stores. The proposal was just approved by the Community Board last week, the first step in the months-long public approval process.

“Despite these and other challenges, including the recent impact of Superstorm Sandy, the Friends and the trust remain wholly committed to working together to secure resources for the park and sustaining its future,” Ms. Wils and Friends executive director A.J. Pietrantone said in a statement released after Mr. Durst’s departure.

Ms. Leicht hopes they can pull it off. “I do think getting it right here is essential before we continue to forge ahead on these types of parks,” she said.

Little help? (agent j loves nyc/Flickr)

The problems of Pier 40 are well documented by now. Once the golden goose of Hudson River Park, the pier is now so deteriorated, it costs more to maintain than it earns for the libertarian park. In two years, the pier might have to be shut down all together. With hopes of MLS soccer headed to Queens instead and a housing proposal on the rocks, what's a park to do?

Well, it looks like Douglas Durst to the rescue.

Acting as "a private individual with knowledge of residential development" rather than chair of the Friends of Hudson River Park, which supports a housing plan, Mr. Dust said he did not think this would work, according to the Post’s Steve Cuozzo. Instead, he wants to rejigger the parking to one level instead of three, freeing up room for additional profit generating development.

It would have the same number of parking spaces, currently 1,700, by converting it from a self-parking facility to one with attendants who would move cars into a three-level “stack,” which would fit into the existing ground floor with 20-foot ceilings.

Freeing up the second floor and roof would make room for 500,000 square feet of commercial space, Durst said. But he wouldn’t build or operate it himself; rather, the Trust would solicit proposals from other developers.

Given the area's booming tech sector, he seems to think this good be a good spot for a technology campus of some sort, or, pitching to the neighborhood's other historic strength, galleries and shops.

Mr. Durst argues this plan is preferable because office space is less contentious than residential development, and it might have an easier time getting approved in Albany, which must approve any changes to the pier's financial structure. If done right, it might not even need Albany's approval at all. Wouldn't that make life easier?

Abandon pier! (ThisIsCosmosCountry.com)

What was once the life preserver of Hudson River Park is now dragging the waterfront park under. Pier 40, the popular athletics venue and parking lot might, after years of attempting to rehabilitate it, be shutting down, according to The Tribeca Trib.

Almost a decade ago, the Legislature signed the Hudson River Park Act, an act aimed to transform NYC’s west side into a pulsating parkland aimed to promote wellbeing, but instead the pier has become more of a health hazard than a health benefit.

Fast forward to 2012 and there are still no developers in sight to come and whisk the property off its feet and recreate it.  Therefore, the Hudson River Park Trust, which has been waiting for the developer-in-shining armor, has begun talking about a possible segmented shutdown of the pier.

“If it was my decision right now, I would completely cut [Pier 40] off and say ‘Not one more dime goes into that pier, period,’” HRPT Board Chair Diana Taylor said at a Trust board meeting last week. “And we just close it down as we have to.”

The re-ignited debate of whether or not to shut down the dilapidating peer follows a major push by the Trust to spread the word about the severe financial state of Pier 40, which with repairs it faces in 2013 would cause the pier to operate at a loss.  The trust pushed for legislative changes that would allow new commercial developments along the piers to bring in revenue and activity to the area.  According to the Trust President, Madelyn Wills, with repair cost-estimations reaching $30 million, “by 2015, those repairs could deplete the Trust’s reserve fund entirely.”

The board is expected to discuss the fate of the pier again in September and will factor in the affect the closing would have on the public.

Should New Yorkers fear for their safety out on the pier, that would only make things worse, driving down revenues further. Talk about a sinking ship.

This might be a goal! (Courtesy of NYT)

The Major League Soccer (MLS) association is looking to expand and include a 20th team, to be based in New York (the Red Bulls don't count).

The league has surveyed nineteen possible locations in the city and narrowed the list to a dozen with Flushing Meadows Park in Queens and Pier 40 on the west side of Manhattan taking the lead, The Times reported.

Officials from the league and Hudson River Park Trust sat down last Thursday to discuss the plausibility of a stadium and its potential size at Pier 40:

Though M.L.S. has several designs, any stadium at Pier 40 would take up about nine acres, seat 20,000 to 25,000 fans and include youth soccer facilities. Trying to expand the size of the pier would probably be very problematic for environmental and political reasons.

The stadium is in the very early stages of development, having to figure out the way around several obstacles, The Times notes: repairing the pier (about $100 billion), finding money to build the stadium, community outcry over the destruction of the older soccer fields, and, of course, finding owners for the new team.

The Park Trust is looking for ways to turn around its declining park revenue, which have dropped from $8 million to $5.5 million in recent years because of worsening conditions and appeal at the piers.

Madelyn Wils, the trust's president, noted in a statement that "[The Hudson River Park Trust is] still actively engaged in our process, and are optimistic we will find creative community-based solutions for Pier 40 as well as the entire five-mile Park."

mewing@observer.com

The plan to use funds from the development of the West Side waterfront to finance new park construction and maintenance seems to be collapsing. While this doesn’t mean an end to these partnerships, it is a signal that public amenities still require public investment. There really is no such thing as a free lunch.

The latest episode in the Pier 40 saga took place on March 28, when Hudson River Park officials rejected a plan by Related Companies to build a $625 million performing arts complex on Pier 40, located at West Houston Street. The Hudson River Park Trust is the joint State-City agency responsible for building and operating the Park. After a failed bid in 2003, in August, 2006, the Trust issued a request for proposals (R.F.P.) to redevelop the pier. According to the R.F.P., the Trust's objectives for redevelopment were to:

However, the Hudson River Park Act prohibits the use of the pier for, hotels, residential units, office uses not related to permitted park uses, manufacturing, “big box” retail, warehousing and gambling vessels. The Act requires that at least 50 percent of Pier 40’s footprint be devoted to non-commercial park space. In addition, the Act specifically states that commercial parking at Pier 40 be used for long-term monthly parking.

The pier, which contains approximately 1.2 million square feet of space and spans 14 acres, is one of the largest in the city. It was used briefly by the Holland America Line after opening in 1963, but has been used as a parking garage for most of its existence. Today, 2,000 long-term parking spaces, excursion boats and the offices of the Hudson River Park Trust call the pier home. A three-acre courtyard in the center of the pier’s roof has been transformed into soccer and baseball fields used mostly for little league games and funded in part by the Lower Manhattan Development Corporation (LMDC) and grants from Nike and the U.S. Soccer Foundation. According to the Trust, the parking spaces provide a reliable revenue stream of more than $5 million, which is about 40 percent of the park’s operating revenue.

The Related Companies proposal rejected in late March, was one of two bids to redevelop the pier and generate cash for the park. This rejection came one day after Related lost out to rival developer Tishman Speyer in the bidding process to develop the Westside Hudson Rail Yards. According to a March 27 article in The New York Sun:

The Act was amended to allow a 49-year term at Pier 57 because the prospective developer was able to demonstrate that the project would provide superior benefits to the community and Trust. However, Related's plan had been opposed by community groups that use Pier 40 for its soccer and baseball fields, and did not generate the political support needed to get a longer lease.

The Camp Group, a for-profit consortium that organizes day camps, is now the only developer bidding on Pier 40. They have a little more than two months left to submit plans for development of Pier 40 and are now working with the Pier 40 Partnership, a non-profit group opposed to commercial development that has pledged to raise $30 million in private donations to redevelop the pier. The Pier 40 Partnership was created by Friends of Hudson River Park, a collection of environmental and civic groups, neighborhood and community organizations, businesses and individual citizens working to raise private-sector advocacy and financial support for a world-class park on the Hudson from 59th Street to Battery Park. Their goal is to create an “urban waterfront.” According to the group’s website, “Pier 40 is one of Hudson River Park's greatest potential assets. With its 14-acre footprint, it has the potential to provide the largest contiguous park space in the Park; and it is the only site that can support large-scale athletic fields for youth and adult sports.”

Those heading the Pier 40 Partnership feel their conservancy, not a for-profit group, must be in charge on the pier. In a Feb. 26 letter to Council Speaker Christine Quinn, Connie Fishman, the Trust’s president, revealed the Trust’s current thinking: A goal is to see if elements of the three plans can be combined “in some fashion by a nonprofit developer to create a tax exempt-eligible proposal that could be financed in the required 30-year term.” (See this article in The Villager.) According to a Jan. 30 New York Times article: “Opponents such as State Senator Thomas K. Duane and Assemblywoman Deborah J. Glick, who represent the area, say “a mega-entertainment destination” that enriches a private developer in a public park is the wrong course to follow. “Those venues already exist in Manhattan,” Ms. Glick said. “What we don’t have is park space.”

The question raised by Pier 40 is the degree to which public amenities like parks can be financed by the profits of private development. The great park building eras in New York where characterized by public investment in public amenities. Senator Duane and Assemblywoman Glick are arguing that the type of development needed to generate the income needed for the park, can not be co-located with the park. This may be true, and may force us to find a way to generate public funds for the park. The Pier 40 Partnership is hoping that the funds needed can be raised by a private, nonprofit group such as the successful Central Park Conservancy or the Bryant Park Corporation. It appears that the Partnership is hoping that there is enough wealth nearby to pay for this amenity without requiring government expenditures. Of course, the absence of private economic activity does cost the government revenue that would be generated from that activity, but forgone income is less likely to be missed than allocations from the public treasury.

Why is this happening? Why are we unable to find the funds we used to find when we built public parks? The simple answer is that the role of government has changed. The funds that once might have been avail
able for infrastructure like parks, roads, mass transit and schools are now devoted to entitlements such as health care, retirement and welfare. I am not arguing against social welfare programs, simply indicating the source of fiscal stress. At one time, New York City devoted public resources to housing and build a public housing system that still houses 600,000 people. Today, the only new below market rate housing built is generated by set-asides that developers agree to in order to receive permission to build luxury buildings, or by non-profit institutions that build housing for their own clients. Robert Moses was able to build new parks and public housing from the 1930’s to the 1960’s with public funds and labor, today we are looking for park funding from private developers or wealthy benefactors.

The problem with this funding model is that it only works if the parks are located near the homes or businesses of the wealthy. We still need public funding for parks in the South Bronx and in the parts of the city that are not wealthy. In a city that is running out of land to develop, the temptation to sell or lease park land will only get stronger. Pier 40 is a warning about the need to maintain public control over these essential public resources. Open space and river breezes are priceless treasures rather than tradable assets. We should keep that in mind.

The news comes as Madison Square Garden announced it was moving forward with renovations of its existing facility, compromising a $14 billion plan to remake Penn Station and create a new office hub nearby, a plan in which Related, chaired by Stephen Ross, is a 50-50 partner with Vornado Realty Trust.

“The Related proposal is still not feasible within the prescribed 30-year term and for that reason is not currently being pursued,” Diana Taylor, chairwoman of the trust’s board, said in a statement today.

The move casts doubts on the viability of Hudson River Park, at least as currently structured, as state and city officials have been attempting to maintain the area as a “self-sustaining” park that pays for its own operations by leasing out development and commercial space such as Pier 40.

Ms. Taylor said in the statement that she was giving the other bidder, which would keep the uses at the pier similar to those in use today, 90 days to come up with a more viable proposal in conjunction with a local residents’ group that had studied the pier.

Not that Related isn’t trying to be loved.

The firm, with money to be made on its proposal that includes Cirque du Soleil, has thrown bone after bone to the community, claiming in its plan to have more parking than currently exists; two acres more of sports fields and basketball courts (both of which are all free); and a dog run. Earlier this month they presented a plan [PDF] with reduced entertainment space, a move that comes on top of dropping a night club and a beach club.

But this is the West Village with which Related is contending, and in the home of Jane Jacobs, the prospect of some 2.5 million annual visitors and tourists—along with the traffic, attitude, and related development they may bring—apparently doesn’t sit too well.

Last night, a Community Board 2 committee recommended that the Hudson River Park Trust board vote down both Related’s proposal and a more modest plan by the Camp Group that mostly leaves the pier intact but adds restrictions on the playing fields.

Now the ball falls into the court of the Hudson River Park Trust board, controlled by Mayor Bloomberg, Governor Spitzer, and Borough President Scott Stringer; it's slated to vote on the Related and Camp Group proposals on Jan. 31.