Thursday, March 17, 2011

Durst & FHRP In BID To Create New Tax For Hudson River Park

Pay-To-Play. A prominent real estate developer, and an area non-profit he runs, want area residents and businesses to pay a special tax to fund Hudson River Park's upkeep. Douglas Durst, chairman of the Durst Organization and Friends of Hudson River Park (FHRP) - which he is Co-Chair - are spearheading a funding scheme in the form of a new tax to help pay for the City/State park's operations. Under the proposal, residential and commercial properties could be required to pay a special tax which tax proponents hope will generate between $5 million and $10 million annually. The Park Improvement Area (PID) area could include 1,700 properties. (Photo: Geoffrey Croft/NYC Park Advocates) Click on image to enlarge.

The Neighborhood Improvement District Steering Committee pushing the new tax includes a number of area landlords. The committee plans to meet in April to review the initial responses and then, by early June, create a draft district service plan for the area. The group hopes to submit a final plan to the City Planning Commission and New York City Council for approval by the end of the year. The highly controversial plan is expected to face strong opposition.

A similar Park Improvement District (PID) proposal supported by Mayor Bloomberg to pay for maintenance and operation (M&O) of the High Line esplanade in Manhattan was quickly scrapped after strong public criticism emerged. A similar scheme to fund Brooklyn Bridge Park was also not warmly received.

Mr. Durst is on the Board of Directors of the Bryant Park Corporation BID. His building, One Bryant Park, generates $150,000 of the BID's gross annual revenue. Bryant Park is a public park which the city allows to be run privately.

Dedicated funding streams from non-government sources create enormous disparities.

Douglas Durst - Chairman
Douglas Durst, chairman of the Durst Organization. The company owns and manages more than 8.5 million square feet of office space and over 1 million square feet of luxury residential rentals according to their website. He is a director of the Real Estate Board of New York, The Trust for Public Land, and Project for Public Spaces. He is also the co-chair of Friends of the Hudson River Park. Durst Fetner Residential (DFR) hopes to begin building West 57, a 600-unit building on across the street from the park in 2012, and boasts, "courtyard open views towards the Hudson River." Mr. Durst's distinctive bright yellow New York Water Taxi fleet are a familiar sight along the park. - Geoffrey Croft


Property owners around Hudson River Park, which will ultimately stretch five miles from the southern tip of Manhattan to 59th Street, could be required to pay a special tax totaling million of dollars annually to fund the park's operations, according to The Wall Street Journal.

The Friends of Hudson River Park, a nonprofit, has begun the public process required for the creation of a business or neighborhood improvement district. Such districts have the right to assess a tax on property owners within their boundaries. By law, the district can't be formed if more than half of these property owners object.

While the formal boundaries of the improvement district have yet to be determined, they would loosely encompass all the property owners along what will ultimately be a 550-acre park, west of Hudson Street and 10th Avenue. The area could include 1,700 properties, and the tax assessment would apply to both residential and commercial properties.

A Hudson River Park neighborhood improvement district would likely rival the size of the Downtown Alliance, which has a $13 million tax assessment, the largest in the city. The Friends of Hudson River Park say it hopes to generate an assessment between $5 million and $10 million annually.

Although members of the steering committee say the assessment to any single property owner would be modest, they expect to face some resistance. "No matter what you do in New York, there's opposition," said Douglas Durst, a prominent landlord who is helping organize the improvement district.

Since the first business improvement district was established in 1984, 64 have been created in New York. All strive to supplement existing city services, be it through sanitation or programming.

On March 3, A.J. Pietrantone, the executive director of the Friends of Hudson River Park, sent a letter to the Department of Small Business Services announcing the first step in the public outreach process—the circulation of a district needs survey to area property owners.

Mr. Pietrantone sent the letter on behalf of the Neighborhood Improvement District Steering Committee, a group that includes Julie Menin, chairwoman of Community Board 1, and a number of area landlords, including Mr. Durst, chairman of the Durst Organization; Lisa Silverstein, senior vice president at Silverstein Properties; and Two Trees' head, Jed Walentas.

"I think we have come to accept the fact that because of the pressures on government funding, the private sector needs to play a role in maintaining parks the way we want them to be," Mr. Pietrantone said.

Hudson River Park is part of a new model for parks development, one that relies on revenues from privately run concessions within the park as well as tax assessments. It is an evolution of the sort of public-private partnership pioneered by the Central Park Conservancy and Prospect Park Alliance in the 1980s. Both are nonprofits that operate government parks relying, in part, on private donations.

The Friends of Hudson River Park maintains that because the park has bolstered real estate values in the area, it makes sense for those who have profited from those increased values to give back to the park. According to 2008 Friends report that used data analysis by the Regional Plan Association, "Approximately 20% of the value of properties within the first two blocks of the Greenwich Village section of the Hudson River Park can be attributed to the park."

"You've got all of these residential developers who have developed buildings all along the park…and when you look at their marketing brochures, they market access to Hudson River Park," says Ms. Menin.

The park was conceived following the 1985 demise of Westway, a controversial proposal to construct an underground highway off the West Side of Manhattan and build on top of it.

It was not until 1998 that the Hudson River Park Act was approved, allowing the city and state to appropriate $200 million toward the creation of a 550-acre park. The Friends of Hudson River Park took shape the following year.

According to Mr. Pietrantone, the park needs another $160 million for its completion, and is expected to be finished by 2018 at the earliest. The improvement district's assessment would also go toward improving access to the park, creating park-like areas in places where the park is narrower and perhaps augmenting the care of the city parks within the district's bounds.

Read More:

Resistance Expected From Owners
The Wall Street Journal - March 14, 2011 - By Dana Rubinstein

A Walk In The Park - August 4, 2009

New York Post - July 29, 2009

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