A Ribbon of Green That Hasn’t Got Any

The five-mile-long Hudson River Park was born from the rubble of Westway—the controversial plan to sink the West Side Highway and cover it with park, which met an ignominious end in 1985.

But reclaiming the waterfront—and getting the hookers off the piers—still sounded good to pretty much everyone.

So planners conceived a new ribbon of green around the edges of lower Manhattan, and phased in a little bit of profit-making development, too, to maintain the greenery. In fact, they even went so far as to say that the park would pay for itself.

But that was 1995, and the financial plan showing that the park can indeed pay for itself hasn’t been revised since.

Rents from developments like Chelsea Piers still cover the rent, but only for a small part of the planned park. Some 70 percent of the park remains to be built—and who will pay for that?

“The party line is that it will be totally successful,” said Albert Butzel, the president of Friends of Hudson River Park, a booster group that has helped raise funds for the park, which is controlled by a city-state agency. “The reality is that it is going to need a lot of help.”

Building the park will require some $450 million, and aggressive fund-raising will be required to obtain that money. But more harrowing to some park critics is the lack of a budget for day-in, day-out costs like mowing the lawns, picking up litter and patrolling the property, which may reach $17 million to $20 million once the park is finished.

Mr. Butzel is thinking of something normally taboo: a new tax.

The argument is simple enough: The park, created in 1998, has increased property values; beneficiaries should chip in something in return. The rub is that not only will some property owners balk at the unexpected cost, but opponents of a proposed self-financed park in Brooklyn Heights are already pining that their park be run the same way.

“Initially, my sense is that this is not what we all bargained for when the Hudson River Park sold the park to the city. It was supposed to be self-sustaining,” said Edward Baquero, managing partner at Coalco, a real-estate investment company that owns two properties that abut the park, including a building with Diane von Furstenberg’s studio on West 12th Street.

But he doesn’t rule out a special assessment district. “We should see what really went wrong,” Mr. Baquero said. “Was it a judgment error? If not, why was it off? I think they need to be very transparent.”

“They,” in this case, is the Hudson River Park Trust, the quasi-public agency overseeing the park. The costs of both constructing and operating the park have climbed since first outlined in a 1995 brochure issued by Mayor Rudolph Giuliani and Governor George Pataki.

The annual operating cost once completed was supposed to hit $10 million. Currently, with just 25 to 30 percent of the park up and running, the budget is about $12 million, paid for by rents, concessions and other revenues. As more parkland will come on line, the trust will gain a few more profitable ventures—like a banquet hall and marina planned for Pier 57 at 15th Street—but Noreen Doyle, executive vice president of the trust, said that no one knows whether the new revenues will offset the new expenses.

Park Tax?

The Friends of Hudson River Park, Mr. Butzel told The Observer, is two or three months away from releasing an analysis of 15 years of data comparing properties in the West Village—which is where the first sections of the waterfront park have been completed—with those elsewhere in Manhattan. The group is pursuing a two-pronged strategy, he said: The data may, in and of itself, convince enough people to contribute voluntarily, or it may persuade them to form a type of business-improvement district that would make those contributions mandatory for owners of property within its boundaries, which he said would probably extend about two blocks in from West Street.

“We haven’t received any feedback from property owners. This isn’t even a public idea,” Mr. Butzel said. “This is still years away.”

He said the study, undertaken with the Regional Plan Association, a nonprofit planning group, would consider a number of variables that may have contributed to value appreciation, such as proximity to a subway station, as well as the citywide real-estate boom.

“Even between one block and three blocks from the river, you can see the difference,” Mr. Butzel told The Observer.

The tax, which would be imposed on top of regular city property taxes, would technically be called an “assessment” and would come only after a majority of property owners decided to create the type of business-improvement district that exists on retail strips throughout the city. The district would have its own budget and its own officers, which would allow property owners to control how much to tax themselves and whether to spend it all on the park or not.

“I think all of these are good ideas,” said Ms. Doyle, adding that the trust wasn’t involved in the tax-district study.

But if the Hudson River Park administrators don’t see a problem in the future, the city and state do. As more and more waterfront parks are planned under the pay-your-own way mantra, the cost of operating these parks—and the desire to create massive development nearby to help fund their construction and maintenance—has become crystal clear.

The Brooklyn Bridge Park, a 72-acre park to be built largely on former shipping piers, would include seven buildings—condominium towers, a hotel and a retail arcade, two of which already exist—covering about eight acres. The development rights and annual fees are supposed to cover the $15.2 million estimated annual budget. (State officials say the park is 85 acres, but that’s including water.)

“I think the Hudson River Park was not so focused on the issue of self-sufficiency. No one was in charge like Charles Gargano, who wanted to make sure it was really self-sustaining,” said Mr. Butzel, who is also a board member of the Brooklyn Bridge Park Conservancy, a support group for that park. “The Brooklyn Bridge Park Development Corporation has leaned heavily in that direction so that revenues would be adequate, and the price of that is that buildings may be higher than they need be. But I think that residential development is a reasonable strategy. We are talking about one 30-story building. Why are people so upset about this?”

Mr. Gargano, the Governor’s chief economic aide, who is also the chairman of the Brooklyn Bridge Park Development Corporation, didn’t respond to a request for an interview, but his associates often say that the self-sufficiency idea for the Brooklyn park stemmed from “the community” a long time ago and was codified in “13 guiding principles” in 1992.

Those principles also state, however, that “Specialized commercial uses … shall be encouraged and residential and office uses shall be discouraged.”

Of course, residential development is exactly the kind envisioned for the park, and for good reason: A marina just would not make much money. Brooklyn’s new park would need six Chelsea Piers in order to pay for itself.

The other document that state officials point to is a 2002 agreement between Governor Pataki and Mayor Bloomberg. That agreement repeatedly refers to a “sustainable” park but never elaborates. (Environmentally sustainable? Financially sustainable?) At one point, the document permits but does not require commercial development to take place on the park: “the development of appropriate commercial uses may occur within the project area, provided that all revenues derived from such uses shall be used exclusively for the maintenance and operation of the project.”

Of course, there is a liberal argument that new parks should pay for themselves whenever they can, so the public money can go to parks in poor neighborhoods that are poorly maintained. It’s the reverse of environmental racism, of putting all the transfer stations and power plants in poor neighborhoods where property values are low anyway and the residents are too disorganized to raise hell. We’re not even talking about power plants here; we are talking about luxury condos with river views.

The state and city are already chipping in plenty of land and money to create both the Hudson River and Brooklyn Bridge parks; the self-sustaining part only pertains to the operation and maintenance budgets.

Besides, some park lovers—or at least park administrators—argue that relying on the city and state to pay annual expenses is just a bad management practice.

“Government has its ups and downs, and over the years, if you have a built-in ability to make sure you always have the bathrooms clean and lawns maintained, how much better would it be,” said Tupper Thomas, the administrator of Prospect Park in Brooklyn and the president of the Prospect Park Alliance, a private support group. And fund-raising, she added, doesn’t qualify as a “built-in ability”; it’s a very hard thing to do.

The opponents of Brooklyn Bridge Park, who fear that the condominium owners will turn the park into their private domain, would welcome the chance to try out a special assessment district.

“We proposed that last year. We called it a P.O.D., a parks oversight district, or a P.I.D., a parks improvement district,” said Judi Francis, the president of the Brooklyn Bridge Park Defense Fund. “We are not stupid. We know that it will improve our real-estate values. But give us the tax burden of the park without the privatization.”

In other words, why can’t Brooklyn be more like Manhattan? A Ribbon of Green  That Hasn’t Got Any