Operation ‘Project Repo’

In late 2006, as a set of projects calling for hundreds of millions in funds languished in their planning stages,

In late 2006, as a set of projects calling for hundreds of millions in funds languished in their planning stages, Dan Doctoroff, then deputy mayor, became frustrated.

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Operating under the code name “Project Repo,” aides to Mayor Bloomberg’s right-hand man for development drew up a clandestine list of where the city could seize control of major initiatives it shared with the state.

Among those considered for a city takeover, according to multiple people familiar with the plan, were the sprawling Queens West housing development near Long Island City; Battery Park City; Roosevelt Island; Brooklyn Bridge Park; and Governors Island.

In theory, muscling the state out of the picture would have stripped away tangles of bureaucracy and set up the city for a speedier groundbreaking.

Alas, the plan never amounted to much more than a memo of aspirations, filed away after city officials encountered a new Spitzer administration reluctant to cede control.
Still, it was representative of the Bloomberg administration’s underlying desire to assert more control over the assets within its borders. And now, more than three years later, under a new deputy mayor, a new governor and a cash-strapped state, the spirit of Project Repo is improbably thriving.

After months of negotiating, the city just announced tentative deals to grab full control of Governors Island and Brooklyn Bridge Park, two waterfront parkland and real estate development projects that have languished under city-state efforts.

The latest venture: Battery Park City. While no official city play for the 92-acre extension of Lower Manhattan has yet been announced, the mostly completed development complex is in the cross hairs of administration officials, particularly Deputy Mayor Robert Lieber, Mr. Doctoroff’s successor, who is pushing for the takeover within the administration.

In classic Bloomberg administration fashion, Project Repo had at its roots a strong distaste for sharing control, particularly with a bureaucracy. On the shared city-state economic development projects, officials involved on both sides had long complained of constant bickering and slow decision making that left city-state projects with a similar legacy: progress at a snail’s pace.

“There’s no mystery that in economic development, the best thing you can do from a city perspective is get the state out of the picture,” said a former city official involved with Project Repo.

Of course, a major barrier always faced the plan’s implementation: There was little in it for the governor. The trade, essentially, would have given the mayor the ability to get the projects moving and then lead the ribbon-cuttings, leaving the state only as a bystander with a bit more cash to put elsewhere. Officials in the Spitzer administration, with an empire-building mentality of its own and not eager to cede control on legacy projects, declined an offer by the Bloomberg administration to take over some of these projects. And that, it seemed, was that.

That is, until the landscape shifted. Now, with a politically weak governor and a fiscally emaciated state government, the Bloomberg administration is whisking away assets co-owned with the state, a gambit they have been able to execute without being asked to give up much, if anything, in return.

Battery Park City, should the mayor indeed make a go at adding it to the list, would not even need the consent of the governor, as the city has long had an option allowing it to purchase the entire property for $1 so long as the debt is paid off. (It would, however, need the consent of City Comptroller John Liu, who has taken a few actions opposing the mayor, and has said he is studying the concept. Fearing political backlash, the Bloomberg administration likely would also be reticent to take control without a nod from Assembly Speaker Sheldon Silver.)

Charles Urstadt, the recently retired vice chairman of the Battery Park City Authority and a founding chairman, has been beating the drum on the issue, urging the city to take control now that the complex is built out and the authority is tasked only with managing, not developing.

“It’s a perversion of the original intent of Battery Park City,” he said of the authority’s putting $30 million a year toward management of a completed development. “The job is finished, and the profits, which are enormous, should be used for affordable housing.”

The attraction to the takeover’s backers is a treasure chest of money that would be available to the city, if not immediately then in future years. In addition to the efficiencies that could be had from streamlining management, the city could save on borrowing costs for the authority’s $1 billion in debt (city bonds currently cost less than authority bonds, generally). That, and the city would not have to go through a sticky political negotiation with the governor and the city comptroller every time it wants to use some of the tens of millions in surplus rents that are created every year by Battery Park City’s buildings (the last negotiation, for $860 million, took more than a year).

For all of the projects, the Bloomberg administration clearly sees now as its best time to strike.

“In past severe economic downturns, the city’s fiscal woes forced it to cede a lot to the state,” a spokesman for the mayor, Andrew Brent, said in a statement. “Today, after eight years of responsible fiscal management, infrastructure investments and planning, the city is in a much different position and can afford to take over and manage the future of certain key sites like Brooklyn Bridge Park and Governors Island.”


Operation ‘Project Repo’