Saturday, January 28, 2012

Reliance On Self- Sustaining Hudson River Park "Model" Continues To Plague Project

Chelsea Piers, a tenant of the Hudson River Park Trust sued in November for at least $37.5 million to repair damage by marine borers to wood pilings supporting the piers. The park - which was created to be self-sustaining according to its by-laws - has run into a number of financial issues for both its daily operating expenses and capital needs. Douglas Durst, chairman of the Durst Organization and Co-Chair of Friends of Hudson River Park (FHRP) are spearheading a Park Improvement Area (PID) funding scheme where area residents and businesses would pay a special tax to fund Hudson River Park's upkeep. A similar proposal to benefit the Friends of the High Line was quickly quashed when area residents and businesses complained bitterly. A similar proposel for Broklyn Bridge Park also met the same fate. (Librado Romero/The New York Times)


It is supposed to be the model for New York City parks to come — built from dilapidated industrial structures, self-sustaining and financed by commercial ventures operating on parkland. And Hudson River Park, which stretches five miles along the Manhattan waterfront from Battery Place to 59th Street, has succeeded in drawing millions of visitors and billions of dollars in development to the West Side. But it now finds its future in doubt, according to the New York Times in a follow up from the NY Post's 2009 story.

Capital funds from the city and state have fallen to just $7 million from a high of $42 million in 2008, because of the recession. Meanwhile, two of the park’s planned revenue-producing commercial piers have yet to be developed, leaving the Hudson River Park Trust, which runs the park, short of the money it needs for routine maintenance.

Adding to its woes: A lawsuit filed in November by the owners of Chelsea Piers, the sports and entertainment complex, which leases three piers from 17th to 23rd Street from the trust. The suit seeks to force the trust, and by extension taxpayers, to spend “at least $37.5 million” repairing damage its piers have sustained over the past two decades from small marine borers known as gribbles and teredos.

This month, the trust fired back in court with a motion to dismiss, arguing that the lawsuit amounted to nothing more than a “for-profit commercial venture trying to secure a huge public bailout for longstanding problems of its own making and for which it bears the sole legal responsibility.”

The suit is a contest between the Bloomberg administration, state officials and the trust on one side and on the other, a well-connected group of investors led by Roland W. Betts, whose list of friends includes George E. Pataki, Michael R. Bloomberg and his Yale fraternity brother George W. Bush. The trust’s board chairwoman is Diana L. Taylor, Mayor Bloomberg’s live-in companion.

Hudson River Park grew out of the ill-fated proposal to build Westway, a superhighway, on 200 acres of landfill along the West Side.

State and city officials in 1998 estimated the park’s cost at $300 million — within a year, that had jumped to $370 million — and its completion date as 2003. The city and the state have already put in $340 million in capital funds, and the trust says another $200 million is needed to finish the public areas of the park. Fourteen years after it began, the park is 70 percent complete.

The cost of caring for structures built on or over water is enormous because they are constantly subjected to battering by tides, winds, fungi and marine borers, problems largely unknown at landlocked properties. Indeed, the biggest hurdle in the park’s development has been the piers themselves.

“It’s far more expensive to replace, repair and take care of these piers than anyone anticipated,” said Madelyn Wils, president and chief executive of the trust and a former executive vice president of the city’s Economic Development Corporation. Ms. Wils said demolishing and replacing Pier 54, at West 13th Street, where the wood pilings are severely deteriorated, would cost $33 million; constructing its planned amenities would cost an additional $30 million.

Pier 40, at Houston Street, is even more problematic. The 14-acre pier has thousands of steel pilings that are severely corroded; a recent estimate for their repair came in at $80 million to $90 million.

Pier 40 also happens to be one of the piers designated for commercial development, with revenues to cover park maintenance. The others include Chelsea Piers and Pier 57, at West 15th Street, where plans are moving ahead for an urban market fashioned from recycled shipping containers, as well as a rooftop park.

The annual budget for routine maintenance at the park is $15 million, a figure Ms. Wils says has not grown despite a doubling of the landscaped areas in recent years. Almost half of the $15 million comes from fees at the covered parking area on Pier 40 — revenue that is now threatened by a leaky roof.

“Part of the challenge is how to put together a plan for successful private investment and appropriate redevelopment when you’re basing that thinking on quicksand,” said Vin Cipolla, president of the Municipal Art Society, a nonprofit group dedicated to planning and preservation, and one of 29 members of a new Hudson River Park task force. “There has to be public investment, and the leadership will have to come from the governor. Otherwise we’ll just see more deterioration.”

The task force, formed by the trust in December, is charged with looking at the fiscal challenges confronting the park and considering possible amendments to the state law that established it.

That legislation was highly specific — some say restrictive — in terms of the sorts of commercial activity allowed in the park, with prohibitions on hotels, offices, housing and casinos, as well as limits on the length of leases.

“We want to make changes so we can move ahead and finish building this park,” Ms. Wils said. “This is not an impossible task, but we can no longer sit around and say, ‘What do we do with Pier 40?’ We need to take action.”

The trust also hopes to step up private fund-raising, taking a page from the successful campaign of the nearby High Line park. The Chelsea Piers lawsuit may make that task even more difficult.

The suit describes the dire state of Chelsea’s wood pilings, arguing that the company has already spent $16 million on “necessary emergency repair work.” It contends, as it has several times in the past, that the Hudson River Park Trust has a legal obligation to pay for the rehabilitation of the pilings.

Executives and officials of the piers and the trust were reluctant to discuss the issue because the lawsuit is pending. A spokesman for the trust would say only that it would vigorously defend itself.

The mayor’s office played down the dispute. “This is a good-faith disagreement between the two parties, which is what judges and courts are for,” Stu Loeser, a spokesman for Mr. Bloomberg, said.

Chelsea Piers, which currently pays $3.5 million a year in rent, opened in 1995, three years before the State Legislature created the Hudson River Park. In the late 1990s, Chelsea Piers asked for a rent rebate to pay for pier repairs.

After the trust rebuffed its demands, Mr. Betts went directly to Mr. Pataki, who was then the governor, and won a five-year rent rebate for pier repairs, beginning in 2004, that was worth $2.5 million. The trust insisted, however, that the rebate “should not be viewed as a waiver, modification or concession by the trust to any of the terms and conditions of your lease.” The lease states that Chelsea Piers is required “to make all repairs,” structural and nonstructural.

But the lease also contains an exception: The state will use its best efforts to include Chelsea Piers in any comprehensive, government-sponsored rehabilitation of the Hudson River piers.

Mr. Betts and Chelsea Piers Management contended in the suit that contrary to the lease, the complex had been wrongfully excluded from a multibillion-dollar effort by the city and the trust to rehabilitate the Hudson River waterfront.

To defend itself, the trust hired Randy M. Mastro, who was a deputy mayor in the Giuliani administration and over the past seven years has served as the go-to lawyer for companies suing the Bloomberg administration. He has a reputation as a fierce and combative litigator.

In his response to the lawsuit, Mr. Mastro argues that there is no “comprehensive plan” to repair all the piers on Manhattan’s Hudson River waterfront. Indeed, the trust’s motion states that only about one-third of all the piers on the river have been scheduled for construction work by the trust. The trust also says the cost of repairing the pilings at Chelsea Piers could reach $100 million.

“And now, unable to obtain any further subsidies from its public landlord,” the trust says in its brief, “Chelsea Piers belatedly sues as its ‘last gasp’ effort to avoid its contractual repair obligations, and in the process, threatens to bankrupt a public corporation charged with the development and stewardship of the most acclaimed public park in New York City since Central Park.”

Read More:

New York Times - January 27, 2012 - By Charles V. Bagli and Lisa W. Foderaro

December 15, 2009 - By Tom Topousis and Rich Calder


  1. This never works. Won't they ever learn!

  2. Nice unmasking of the special access and interests behind Chelsea Piers giveaway and the insiders at the Friends of Hudson River Park. Corruption all around and no permanent funding for parks b/c the political parties prefer to play Wall Street against the people.

    "State and city officials in 1998 estimated the park’s cost at $300 million — within a year, that had jumped to $370 million — and its completion date as 2003. The city and the state have already put in $340 million in capital funds, and the trust says another $200 million is needed to finish the public areas of the park. Fourteen years after it began, the park is 70 percent complete."

    Rosy undemocratic projections for redevelopment that benefit Democratic and Republican insiders and then threaten the state and taxpayers with huge costs. The 1% - Democratic and Republican Party fat cats - are making govt so small that they can drown it in a bathtub.