Tuesday, April 27, 2010

The Absurd Formula to Finance the Brooklyn Bridge Park Chosen By Those in Charge: Noticing New York’s Testimony at Last Night’s Hearing

(Above city parks commissioner, Adrian Benepe, speaking on behalf of the Bloomberg administration at last night's hearing.)

Here for your consideration is the Noticing New York testimony we provided at last night’s hearing with respect to the evolving (“modified”) plans for Brooklyn Bridge Park. We have a lot more to say about the park which we will have to provide in due time but we took our opportunity last night to provide three minutes drilling down on one specific point; that the notions of those in charge that the park should be expected to completely pay for itself by including development such as housing are nonsensical. We were not the only ones speaking last night to hit upon this theme. Not only was it a repetitive theme for members of the public who spoke, but we note that politicians like Brooklyn Borough President Marty Markowitz and City Councilman Steve Levin also expressed various shades of opposition or skepticism to this misguided concept of how the park would be financed. (Shifting to positions more in line with the lead being taken by State Senator Daniel Squadron and Assembly Member Joan Millman.)

Our letter of comment is formally addressed to the Empire State Development Corporation (“ESDC”). Does that make sense? Probably. If in this short post we had to get down to the technical level necessary to explain the labyrinth of public authorities under ESDC (or really Mayor Bloomberg?) your head would reel. That lack of transparency and accountability is some of what other people’s testimony was about last night. Among other things, a major aspect of the modification for which the hearing was being held is that much of the sum effect of all the tangled new documents being put into effect is to achieve an unprecedented amount of power for Bloomberg without corresponding checks and balances. Speaker Doug Biviano, analogizing to the out-of-control Metropolitan Transportation Authority (“MTA”) dubbed the new set-up the creation of the “MPA,” the “Mayor’s Project Authority.” We suggest the “P” in that new acronym could also stand for either “Power” or “Personal.”

Comment that questioned what is proposed to be done in the park extended to other issues as well. People criticized aspects of the park’s design and (often related) spending decisions. Per our comments below, questions were raised about whether the spending is excessive (e.g. "wave attenuators" will be very expensive).

The city parks commissioner, Adrian Benepe, (see picture from last night above) to whose recent statements we twice referred in our own testimony was there to make a very long (eight minute) statement that made one thing very clear: That Bloomberg and the city intend to hold back the $55 million for which it “bought” or obtained control over the park until it gets the financing arrangement it wants for the park. Judi Francis, Brooklyn Bridge Park Defense Fund President, referred to this tactic as the city holding the park improvement “hostage” to development. Is that the way that parks were ever funded before when great parks like Central Park or Prospect Park were created? Absolutely not.

Here then is what we had to say about why the absurd notion that parks should self-finance themselves with development makes no sense.

* * * *

April 26, 2010

Empire State Development Corporation
633 Third Avenue, 37th Floor
New York, NY 10017

Re: April 26, 2010- Hearing on Brooklyn Bridge Park

Dear ESDC:

This comment is being offered in the name of Noticing New York, an independent entity dedicated to the proposition that developing New York and appreciating New York go hand in hand.
1. I have to remark that you* do not seem to know what you are doing in terms of your plans for the financing of this park.

(* those of you in charge)

2. By definition, any successful park, any park that should be created, involves exogenous or external benefit for the surrounding community. That means that, by definition, any formula that is set up to require such a park to pay for itself is wrong and skewed to favor any development (housing, etc.) that such a formula dictates should pay for the park.

3. This park, if we are to believe what most people are saying, is supposed to be a spectacular new asset for the city. If Nicolai Ouroussoff is correct in assessing that the positive effect the park “will have on New York is immeasurable” and if he isn't off-base when he equates Brooklyn Bridge Park with Frederick Law Olmsted's (and Calvert Vaux's) Central Park then the park can be expected to have substantial external benefits far beyond its boarders, which means the idea that it should pay for itself is way off base.

4. This is not to say that there can’t be a question about how much park there should be in the city or how large this particular park should be . That is an entirely different question that needs to be answered in an entirely different fashion.

5. One thing that a formula requiring that a park be paid for by development does is engender a healthy and deserved suspicion on the part of the community about how much a park really needs to cost and whether costs are being artificially inflated in order for an overseeing development-oriented agency (like ESDC) to call for more of what it likes best, which is development catering to developers. (We all remember the fleet of 31 Toyota Priuses and dune buggies.)

6. The question of whether to pay for the park with property taxes from the escalating value of the surrounding property or to pay for it from a PILOT agreement from development in the park is so misleading as to be absurd:

a. No matter what, there will an escalation of real estate values in Brooklyn, (close to the park and farther away) and in the city as a whole because of this park. Even if those escalating values are not tracked and specifically seized to pay for the park they will still accrue and flow into the city’s general fund. In essence, no matter what, they will still be paying for the park. The good thing about these increased taxes is that they will fluctuate appropriately with the economy. When the economy burgeons they will increase; when the economy falters they can, as necessary, be subject, like all other property, to increases in the general levy that comes from changes in the tax rate. If my fellow residents of Brooklyn Heights dwelling close to the park expect that they would somehow not pay more taxes when their property values go up then they unfairly (and we think incorrectly) expect to benefit in a freeloading fashion at other New Yorkers’ expense.

b. Conversely, whenever real estate is developed it ought to pay taxes and it is not a good idea, as proposed in this park development formula, either to segregate those taxes from general city revenues or to lock them into a special amount via a PILOT agreement. These negotiated bargains are likely to benefit the developers too much and for too long as political handouts.

7. Whatever the “right amount” of development for is an area, that’s the “right amount.” It doesn’t make sense to reverse engineer the how much that should be based on a snapshot of what it costs to support a park in a particular year. The Bloomberg administration wants to proceed with development under this formula in the next two years.* Really? Does that mean that development will therefore be greater because today’s newly low real estate prices are projected to go down even more for the next two years?

(* As Commissioner Benepe has spoken about in just the last few weeks.)

8. Another underlying fallacy associated with nominally dedicating funds from one source to support a park is that those funds are fungible irrespective of “dedication,” a point city parks Commissioner Benepe essentially acknowledges when he goes on the Brian Lehrer show to say he is against dedicating park revenues to park support because he figures that whatever is locked in by dedication will just be taken back by the city reducing the budget on the back-end.

9. In sum, you need to thoroughly rethink this so-called plan. It’s very unworkability argues that it is more contrivance and device than anything else.


Michael D. D. White

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