Tonight (Wednesday, February 13), the Battery Park City Authority (BPCA) will host its first Open Community Meeting of 2019. The meeting, which begins at 6:00 pm, will be held at Six River Terrace (opposite the Irish Hunger Memorial and next to Le Pain Quotidien restaurant). Admission is free, and no R.S.V.P. is necessary.
One topic likely to come up as residents question BCPA executives is the ongoing crisis of affordability that plagues both rental tenants and condominium owners. These related issues were raised during the public comment session of the January 29 meeting of the BPCA’s board, when longtime Battery Park City resident Jonathan Jossen said, “as a real estate broker, I have my thumb on what’s going on. And everybody’s asking about the same thing: the land lease.”
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Resident and real estate professional Jonathan Jossen: “Everybody’s asking about the same thing, the land lease. We’re watching valuations go down.”
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This was a reference to the exotic nature of property ownership in Battery Park City, where homeowners, landlords, and developers do not own outright the land they occupy, but instead lease the space (through the year 2069), in exchange for yearly payments of ground rent, as well as so-called “payments in lieu of taxes.” Concerns about this arrangement have grown acute in recent years, as more residents have come to realize that, under the current terms of the ground lease, their homes will disappear in the 50 years, as ownership of all the real estate in Battery Park City reverts to the Authority. For condominium owners, this will mean that their property is effectively confiscated, while renters will face the prospect of eviction. Both owners and tenants will be rendered homeless under this scenario.
“What’s happening with the land lease?” Mr. Jossen continued. “Are we getting any closer? We’re watching valuations go down.” In a nod to the complexity of this agreement, he added, “half the brokers down here don’t understand it – don’t understand how each year, the land lease goes up. But they all think it’s something awful.”
“The second thing is Gateway Plaza,” Mr. Jossen pressed. “Everybody wants to know what’s going on there. Is everybody going to get pushed out? It ends the 2020, so are there any answers or any enlightenment?”
This was a reference to the agreement between the LeFrak Organization (the owners of Battery Park City’s largest residential complex, Gateway Plaza) and the BPCA, from whom they lease the land on which the complex is located, through the year 2069. A series of accords stretching back to the 1980s have limited rent increases for Gateway tenants to those approved for stabilized apartments by the City’s Rent Guidelines Board. The most recent agreement, reached in 2009, protects legacy tenants (meaning those in residence at the time of the agreement) only through 2020.
Responding the Mr. Jossen, BPCA chairman George Tsunis said, “I can give you something very generalized. Not only do we understand, we over-stand. And whereas I’m not going to discuss negotiations in public, right now I will tell you that we’re well into it and that we understand the angst that some of these things create and we’re working very diligently to put these matters to bed. Hopefully we’ll have some positive news for you in the coming weeks and months.”
Mr. Jossen raised the same issues at the January 22 meeting of Community Board 1 (CB1), when he said, “I’m very concerned about the land lease at Gateway and very concerned about the land lease in Battery Park City as a whole. In 2020, the end of stabilization is coming at Gateway. And we have 50 years left on the lease for the rest of the community. Is there any response? Do we know what’s going on? Everybody says nobody is talking to anybody.”
CB1 chair Anthony Notaro replied, “the update is that there is a coalition of homeowners, and they have made a proposal to the Authority, and are waiting to hear back.” (A similar group, the Gateway Plaza Tenants Association, represents renters at that complex, and is also advocating for a renewal to the affordability agreement that protects rent stabilization there.)
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Cuomo administration housing chief RuthAnne Visnauskas: “We are aware of that and we are working on the issue. It is on our radar to be addressed.”
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The replies by Mr. Tsunis and Mr. Notaro contrasted with those offered by the State’s top housing official, RuthAnne Visnauskas (who heads New York State Homes and Community Renewal) at the January 22 meeting. During a question-and-answer session, she was challenged by the observation that, “what people here are facing is, best case, three percent per year fixed-cost increases in perpetuity. Worst case, that sunsets and we go to six percent of fair market value of the underlying land and everybody is bankrupt, people walk away, and their homes go into foreclosure.”
Ms. Visnauskas replied, “we are aware of that and we are working on the issue. It is a concern on Roosevelt Island, as well, where there are land leases that have shorter tenure. It is on our radar to be addressed.” Ms. Visnauskas’s perspective is germane because the administration of Governor Andrew Cuomo controls the BPCA, by appointing its board. In this context, any indication that Albany perceives affordability in Battery Park City to be less than an urgent priority may be seen as a discouraging portent.
