Community Board 1 (CB1), along with a coalition of public-service organizations, is opposing a request by the owners of 200 Water Street to privatize more than 4,700 square feet of public amenity space. This space consists largely of arcades — the columned porticos that adorn the ground-floor facades of more than a dozen Water Street buildings — that would be enclosed to create new retail space at street level, as well as three new market-rate rental apartments at the second floor level, in addition to several hundred square feet of outdoor space on the plaza in front of 200 Water Street, which will be used for a cafe.
In a controversial 2016 move, CB1 endorsed a de Blasio administration proposal to allow the owners of buildings along Water Street to enclose a dozen-plus arcades in exchange for a promise to maintain and upgrade the adjacent open-air plazas that are found in front of many of the same buildings. At the time, critics derided this as, “a giveaway to developers” and condemned the fact that public space was being traded away in exchange for a public service (properly maintaining the plazas) that building owners were already supposed to provide.
At CB1’s September 26 meeting, Bruce Ehrmann, who had supported the 2016 resolution, said, “this one of the worst votes I ever cast in 19 years on CB1.” Mr. Ehrmann, who serves as co-chair of the CB1’s Landmarks & Preservation Committee, and is also a member of its Land Use, Zoning & Economic Development Committee, added, “I express my regret.”
This sentiment was echoed by CB1 chair Anthony Notaro. At the September 26 meeting, he said of the City’s plan to fill in arcades, “we jumped the gun and there wasn’t enough due diligence. We’ve learned a lesson.”
Recalling a presentation from July of this year, in which the owners of 200 Water Street outlined their plans, Mr. Ehrmann continued, “I’m mostly concerned with the aesthetic of this plaza. The owner’s lawyer said they have new aesthetic values. I asked what those were. He paused for about ten seconds, and then said their aesthetic consists, ‘of a few benches for people to sit on.'”
In exchange for this modification to the plaza at 200 Water Street, the owners of the building will be compensated handsomely. Roger Byrom, chair of CB1’s Landmarks & Preservation Committee, noted at the September 26 meeting, “it’s a disgrace that we are being forced to give up something for which the landlords are probably going to get a million dollar per year in perpetuity. Rental income from dwelling units alone will be $600,000 per year. Add to that increased profit from expanded retail and the open-air cafe they want to create on the plaza, plus the resulting increase in value to the building. It’s clear that this is not a fair trade.”
Mr. Byrom added, “for improved transparency and an equitable public-private exchange, developers seeking to fill in Water Street arcades in the future should be required to provide a full financial analysis.”
At the same meeting, CB1 enacted a resolution calling upon the City Planning Commission to veto the planned changes to the arcades and plaza at 200 Water Street, saying, “CB1 believes the proposed plaza designs are generic, mundane and lack aesthetic vision for this iconic space.” The resolution continues, “there is no adequate compensating amenity to justify enclosing 4,743 square feet of the double height arcade, constructed in return for additional building [floor-area ratio], and converting it to private use by infilling the arcade,” and notes, “the proposed infill of the second level of the arcade with three market-rate apartments contradicts the City’s mission to increase affordable housing in the neighborhood and provides no public benefit.” The measure concludes, “CB1 has serious concerns about the Water Street zoning as a whole, particularly in terms of public benefit and equity. The Department of City Planning has agreed to meet with CB1 to discuss Water Street zoning and we will follow up with a resolution detailing our position on the zoning as a whole.”
The arcades at 200 Water Street (along with those in many nearby buildings) were created as a result of zoning regulations in the 1960s and 70s that were intended to encourage builders to add public amenities to their plans, in exchange for which they were permitted to erect taller, bulkier skyscrapers. In the case of 200 Water Street, the original “floor-area ratio” (FAR) permitted for the site was 10.0, meaning that the developer had the right to construct a tower that had an square footage ten times the size of the lot on which the structure was built. This would have allowed for a building with 334,000 square feet of interior space. But, in exchange for adding arcades and a plaza at the building’s entrance, the original developers were permitted to increase the size of 200 Water Street by 61 percent, to 541,000 square feet. The financial upside from this extra space — in terms of both increased rental income each year since the building opened in 1973 and increased overall value to the building — is almost impossible to calculate. But it can be reasonably assumed to range in the tens of millions of dollars, if not more than $100 million.
In exchange for this windfall, the building’s owners were supposed to provide the public amenities of arcade and plaza space at ground level. The original developers, the William Kaufman Organization, complied with these terms, hiring a team of artists to create a whimsical and widely admired space that contained fountains, street furniture, billowing canvas canopies, a neon-lit tunnel fabricated from a corrugated steel, and the world’s largest digital clock. But the building was bought by Rockrose (its current owners) in 1996, and converted from offices into apartments. In the years that followed, the public amenities at the base of 200 Water Street were allowed to deteriorate, as was the case with many other buildings along Water Street that contained arcades and plazas. At 200 Water Street, the new owners were sued by the team of artists who had created the original amenities, an action that resulted in agreement to preserve their work through 2011.
CB1 is not alone is resisting the changes proposed for 200 Water Street. On September 8, the City Club of New York issued an open letter announcing its opposition, saying, “this is a perfectly fine arcade that provides useful (if no longer inspired) public open space at the entrance to the South Street Seaport and at a possible entrance for the Second Avenue subway, should it ever grace Water Street. This is not a space to be thrown away; it should be cultivated.” The letter added that the City, “should not excuse the owner of 200 Water Street from its obligations to provide… public open space that was required for the additional revenue-producing space in its building. It should instead require the property owner to make a best effort to make the existing arcade and plaza… justify the excessive amount of revenue-producing residential space that already exists in 200 Water Street.”
And on September 28, the Municipal Art Society wrote to the City Planning Commission to express, “our grave concern regarding Rockrose Development Corporation’s proposal for the redevelopment of the [amenity space] at 200 Water Street,” adding that, “retail infill at the expense of public space sets a harmful City-wide precedent of putting private gain before public benefit.” The Society also voiced a broader concern that, “the Water Street initiative could become a conduit for facilitating lucrative private commercial and residential development opportunities for building owners rather than for meaningful public-realm improvements.”
These moves come against the backdrop of deepening public skepticism about the fairness of deals made between the City and real-estate developers over so-called “privately owned public spaces” (POPs). A recent audit by the office of City Comptroller Scott Stringer found that of 51 such spaces located in Lower Manhattan, only eight are meeting legally required standards for public access, hours, or the availability of amenities such as artwork, lighting, furniture, plantings, drinking fountains, and bike racks. This represents a significant loss of value to the public, because these POPS were created in exchange for generous zoning variances that allowed the building owners construct towers that were taller and denser than otherwise would have been permissible.
In this context, another civic organization, Friends of Privately Owned Public Spaces, weighed in against the 200 Water Street proposal on October 8, noting that, “the proposed plaza improvements do not adequately compensate for the loss of the arcade. The costs and benefits are skewed in favor of the property and owner to the detriment of the public.” More broadly, the organization noted, “for more than 50 years POPS have contributed to New Yorkers’ quality of life. The City could never have afforded to have provided the acres of plazas, arcades, and interior spaces that it has gained through incentive zoning. The developers were well compensated, with floor area bonuses, for creating these spaces. They should not be rewarded again, for taking them away.”
The next step in the process of determining whether the owners of 200 Water Street will be permitted to move ahead with their proposal is a public hearing before the City Planning Commission later this month (no date has yet been set), at which the plan will be reviewed. (The public will not have the opportunity to speak at this hearing, but may send comments in advance for the Commissioner’s review.) At a separate meeting, now projected to take place in November, the Commission will vote on whether to approve the project.
Alice Blank, who serves as co-chair of CB 1’s Waterfront, Parks & Resiliency Committee and is also a member of its Land Use Committee says, “I sincerely hope our City Planning Commissioners will review this application as carefully as the community has, and recognize that the plan for 200 Water Street does not provide a public benefit equivalent to the precious open space it would remove. There is no public benefit in enlarging a Duane Reade, adding a restaurant on Fulton Street, blocking the views and access to Water Street or adding three private apartments. Lower Manhattan needs its open space and the Citizens of New York should see this location thrive again. The best solution is a simple one: The City should encourage Rockrose to do for the the public what their predecessors generously did and make the beloved public space at 200 Water Street great again.”