The BroadsheetDAILY ~ 1/6/21 ~ CB1 Discussion Tonight Will Review Skyrocketing Costs of Home Ownership in Battery Park City

Can Anybody Spare $100,000 Per Month?

CB1 Discussion Tonight Will Review Skyrocketing Costs of Home Ownership in Battery Park City

Tonight (Wednesday, January 6) the Battery Park City Committee of Community Board 1 (CB1) will host a discussion about affordability for condominium owners, for whom the cost of owning a home in the neighborhood is becoming increasingly prohibitive. The online meeting, which starts at 6:00 pm, is open to the public. Anyone wishing to attend should browse this link: https://live.mcb1.nyc, and follow the instructions posted there.

The discussion will feature a presentation by a new grassroots organization, the Battery Alliance, which was recently founded by longtime residents Daniel Akkerman and John Dellaportas, both of whom serve on the boards of their condominiums (Hudson View West and Liberty House, respectively). Their organization can be found online at SaveBPC.org, and contacted via email at Info@savebpc.org.

Mr. Akkerman explains that, “I moved here eight years ago, and since then I have become very concerned, as my monthly charges have increased by 50 percent—in a building where the increases are due to the ground lease, civic fees, and payments in lieu of taxes. We need to go to elected officials, because they not only represent us as citizens, but are also our landlord.”

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 acreage they occupy, but instead lease the space (through the year 2069) from a government agency—the Battery Park City Authority (BPCA)—in exchange for yearly remittances of “ground rent,” as well as so-called “payments in lieu of taxes” (PILOT).

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 and absent any change, their homes will disappear in 49 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.

But condominium owners have an even more pressing concern in the short term: Ground leases for several of these buildings contains “reset” clauses, slated for the near future, under which their ground rent payments will jump to six percent of the fair market value of the land on which these buildings sit. For multiple buildings, this amount could be appraised as running into many tens of millions of dollars—in some cases more than $100 million. If not modified, this codicil might cause ground rents at some buildings to jump by several million dollars per year, which in turn could cause monthly expenses to rise by thousands of dollars per year for each apartment in such buildings. This may cause the resale value of those units to plunge. While these provisions have been a feature of Battery Park City ground leases since the community’s inception half a century ago, they have taken on a new urgency as the resets have begun to loom ominously.

For three condominiums—River & Warren, located at 212 Warren Street; the Ritz-Carlton Residences, located at Ten West Street; and Rector Square, located at 225 Rector Place—these resets are imminent, slated for this year, next year, and 2024, respectively. For 11 of the older condominiums, a negotiation in 2011 achieved a $279 million rollback in future ground-rent hikes, by limiting increases to three percent per year through 2039 (in some cases, after significant, initial step-ups in ground rent). After that year, this group of 11 condominiums will once again face resets based on the value of the land beneath their buildings.

Against this backdrop, the City (facing massive budget shortfalls due to the pandemic coronavirus, and the economic downturn it unleashed) has been imposing ever-more aggressive tax assessments against condominium buildings throughout Manhattan, including those in Battery Park City. (The crucial difference for homeowners in this community is that they do no truly “own” these properties, which adds to their financial hardship, and further depresses resale values.)

An illustration of how these forces are converging to squeeze local homeowners was provided by Bob Zack, a leader of the Battery Park City Homeowners Coalition, at a 2020 meeting of CB1’s Battery Park City Committee. Mr. Zack announced the result of financial projections he had tabulated, showing that, “if present trends continue, and I am still alive in the 2060s, the monthly charges on my apartment come to more than $100,000 each month. And that doesn’t include a mortgage payment. These numbers assume that I own my unit free and clear.”

Mr. Akkerman insists that, “any further increases in what the BPCA charges condominium owners are just not sustainable.”

Mr. Dellaportas adds that, “we are already at a point where monthly charges for condominiums are exceeding what those apartments would fetch on the rental market. This effectively reduces the value of that ownership interest to zero.”

BPCA spokesman Nick Sbordone says, “we share the desire to preserve and extend the economic stability that many homeowners in Battery Park City enjoy. As enumerated in BPCA’s Strategic Plan, increasing certainty and allowing residents to remain in their homes is one of the Authority’s primary goals. While the Authority has no control over the amount of property taxes passed through as PILOT to all buildings in Battery Park City, or operating expenses and capital costs incurred by individual buildings, the proposed framework we have shared with the Battery Park City Homeowners Coalition is structured to create stability and predictability in ground rent—comprising, on average, less than 20% of total common charges—for many decades to come. Moreover, this structure benefits those who are invested in remaining in the Battery Park City community for the long term. We look forward to having productive discussions with the members of the Coalition about this proposal.”

“What has begun happening,” Mr. Dellaportas counters, “is that working families are selling for whatever they can get and walking away, because they can’t afford to live here anymore. And they are being replaced by foreign investors looking to park cash.”

“If this is what the Authority wants to happen,” he says, “if their goal is to depopulate Battery Park City of working families living the dream of home ownership, then the BPCA is doing a wonderful job. But their actual, original mission was to create affordable housing for middle-class families. So they either need either to change their mission or change the lease terms.”

Through the Battery Alliance, Mr. Akkerman and Mr. Dellaportas are advocating for a five-point plan to reform the financial relationship between the Authority and condominium owners. The first plank is that all increases in ground rent and PILOT must cease immediately. Second, they propose that the ground leases must be extended for an additional 99 years, to 2168. Third, they want to create an option for each condominium to purchase the ground beneath its building, for an amount equal to ten times the ground rent collected for each building in 2020. Fourth, the Battery Alliance wants New York City tax assessors to treat lease payments as an expense when calculating PILOT payments, which would have the effect of dramatically reducing each building’s tax liability. And finally, Mr. Akkerman and Mr. Dellaportas want to shift responsibility for the community’s parks and outdoors spaces to the Hudson River Park Trust. “Everywhere else in New York City, this is covered by taxes,” Mr. Dellarportas argues. “Residents here pay those taxes, but we are also charged civic facilities fee.”

Mr. Dellaportas emphasizes that, “the BPCA takes in most of their money from commercial properties like Brookfield and Goldman Sachs, and 80 percent their budget comes from revenue streams not associated with home owners. So any concessions they make to condominiums would have barely any effect on the Authority’s budget.”

Both Mr. Akkerman and Mr. Dellaportas emphasize that their efforts through the Battery Alliance are not meant to replace those of the Homeowners Coalition, on which both of them previously served in leadership positions. “What we are doing is complementary to their work,” Mr. Akkerman explains. “They are negotiating with the BPCA on behalf of condominium boards, which is necessarily a top-down approach. We are mobilizing public awareness and support on behalf of the owners—and voters—themselves, which is a bottom-up approach.”

“Our goal is to empower each, individual homeowner to connect with the elected officials who are controlling the fate of their homes,” Mr. Dellaportas adds. “Our website allows any homeowner to send a single email message, which will go to every elected official who has a say on these issues.”

“We have had meaningful responses from multiple elected officials,” Mr. Akkerman continues, “but this is just the beginning of the process. We need to get the thousands of homeowners who live here engaged and involved. And the Governor must take notice of the will of people. There are approximately 4,000 condominium units in this community, with about two voting adults per average household—all of whose interests are aligned. And with election season coming, we plan to be very vocal about who has supported us, and who has ignored us.”

These developments come on the heels of a December 14 proposal by the BPCA, which would eliminate ground rent resets through 2069 based on the fair market value of the land, but impose “flip taxes” on all sales of condo units, amounting to eight percent for the first transaction after such an agreement is concluded, and one percent on all subsequent sales, through 2069. This proposal also impose “sustainability targets” for all condominiums, which would levy an as-yet-unknown cost on each building.

“The flip taxes would further devastate our already-depressed property values,” argues Mr. Dellaportas, “and the BPCA are both the landlords and the ultimate owners of these buildings, so they should be paying for resiliency improvements, instead of trying to pass that cost along to us.”

Mr. Dellaportas concludes that, “the obligations contained in the original leases between condominium owners are never going to be paid, under any circumstances. Not because residents will refuse to do so, but because it is financially impossible. The only choice facing the BPCA is whether they want to force thousands of homeowners into default, and then evict them through foreclosure. Or whether they want to renegotiate those leases under more realistic terms.”

(Editor’s Note: The author of this article lives in a building that would potentially be affected by the proposals described here.)

Matthew Fenton

Adit Up

Architects Propose to Reclaim Park Tribeca Lost Nearly a Century Ago

Community Board 1 (CB1) is supporting a plan to create a new park in Tribeca, within the Holland Tunnel Rotary, the six-acre asphalt gyre of exit ramps that connects traffic from New Jersey to Lower Manhattan’s street grid.

The husband-and-wife architecture team of Dasha Khapalova and Peter Ballman are proposing to create a constellation of small, street-level parks at the corners of the complex (bounded by Hudson, Laight, and Varick Street, as well as Ericson Place) which will double as entry points for a new, submerged central plaza. This plaza is anachronously known as St. John’s Park, although it has not been a publicly accessible space since the Holland Tunnel opened, 94 years ago.

Letters

To the editor,

Anthony Notaro was an awesome man. After 9/11, he sought us out at Moran’s restaurant on Washington Street and asked how he could help.

We watched him interact over many years on behalf of the community in a common-sense, practical manner rarely practiced in these parts. He was most compassionate and yet got the job done while listening to all sides.

My wish is that other leaders would take a look at his manner and adopt this posture. NYC desperately needs doers today.

Today I will make a donation in his name to the Bowery Mission.

I will make an effort to relate to folk as he did, an inspiration to us all. He will be missed; he made his mark for all.

Brian Lydon

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To the editor,

Thanks so much for printing this tribute to Anthony.

There was much about him I didn’t know and Anthony and I worked together on CERT since its beginning and worked on the Community Board for years and years. He always kept his eye on the business at hand so I never knew about his many travels or that the both of us did the huge Italian Christmas Eve celebrations.

It’s comforting to know amid all that he suffered in his long battle with cancer that he also had a loving wife and family around him. R.I.P Anthony.

You led a good life and you did good for so many others.

Jean Bergantini Grillo, former Team Chief, Tribeca CERT

Public Member CB 1

In Memoriam: Anthony Notaro

(1951 – 2020)

A Leader Who Presided Over Transformational Times in Lower Manhattan Passes from the Scene

Anthony Notaro, a Lower Manhattan community leader for decades and chair of Community Board 1 (CB1) from 2016 to 2020, died on December 30, after a years-long battle with cancer. He was 69 years old. A resident of Battery Park City since the late 1990s, Mr. Notaro joined CB1 shortly after moving to Lower Manhattan. To read more…

Eyes to the Sky

January 4 – 17, 2021

Early nightfall and late sunup beckon to stargazers before days lengthen

The last of the longest nights of the year are bookended by planet Venus taking final bows in early morning twilight in the southeast and planets Jupiter and Saturn poised at the edge of the southwest skyline in afternoon dusk. The latest sunrises of the year – 7:20am through January 10 – and early sunsets, around 4:40pm, motivate this stargazer to greet starry skies, mostly in short jaunts or from a window or balcony, during morning darkness and half-light, 6am to 6:50am, and in the afternoon from just after 5pm – 5:40. To read more…

CALENDAR

January 6

Community Board Meetings

and Other Events This Week

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Wednesday January 6

6pm

Battery Park City Committee

Live Remote Meeting – https://live.mcb1.nyc

AGENDA

1) Oval Park / Pumphouse Park Signage – Discussion & Resolution

2) Ground Rents & Condominium affordability in BPC – Discussion & Resolution

3) South Battery Park City Resiliency-related Control Houses in the Public Rights-of-Way – Discussion & Resolution

———————————————————————————–

Thursday January 7

12NOON

China Institute

Did you know that the dumpling, a world-renowned symbol of Chinese cuisine, did not originate in China? On Thursday, January 7, cultural historian Miranda Brown will take us all the way back to the Tang Dynasty (618 to 907 AD) to trace the dumpling’s roots deep into Central Asia. It’s a journey that will take us through foreign dynasties, epic Mongol expansion, and the family recipes of a Ming dynasty Shanghai noble, to understand the how the ubiquitous “Chinese” staple came to be. Free

6PM

Environmental Protection Committee

Live Remote Meeting – https://live.mcb1.nyc

AGENDA

1) 250 Water Street Brownfield Cleanup Program – Update by Lawra Dodge, President, Excel Environmental Resources, Inc.

2) 250 Water Street, Draft Scope of Work for an Environmental Impact Statement (CEQR No. 21DCP084M) – Discussion with Howard Hughes Corporation

3) Governors Island Draft Environmental Impact Statement – Discussion with the Trust for Governors Island

For access to Environmental Review documents, please visit the CEQR website and search by CEQR number:

250 Water St: CEQR # 21DCP084M

Governors Island: CEQR # 11DME007M

CLASSIFIEDS & PERSONALS

Swaps & Trades, Respectable Employment, Lost and Found

To place a listing, contact editor@ebroadsheet.com

TODAY IN HISTORY

January 6

1431: Joan of Arc at the stake

1540 – King Henry VIII of England marries Anne of Cleves.

1781 – In the Battle of Jersey, the British defeat the last attempt by France to invade Jersey in the Channel Islands.

1838 – Alfred Vail and colleagues demonstrate a telegraph system using dots and dashes (this is the forerunner of Morse code).

1907 – Maria Montessori opens her first school and daycare center for working class children in Rome, Italy.

1912 – German geophysicist Alfred Wegener first presents his theory of continental drift.

1929 – King Alexander of the Serbs, Croats and Slovenes suspends his country’s constitution (the January 6th Dictatorship).

1930 – The first diesel-powered automobile trip is completed, from Indianapolis, Indiana, to New YorkCity.

1941 – President Franklin D. Roosevelt delivers his Four Freedoms speech in the State of the Union address.

1947 – Pan American Airlines becomes the first commercial airline to offer a round-the-world ticket.

1960 – National Airlines Flight 2511 is destroyed in mid-air by a bomb, while en route from New York City to Miami.

1989 – Satwant Singh and Kehar Singh are sentenced to death for conspiracy in the assassination of Prime Minister Indira Gandhi; the two men are executed the same day.

1995 – A chemical fire in an apartment complex in Manila, Philippines, leads to the discovery of plans for Project Bojinka, a mass-terrorist attack.

2005 – American Civil Rights Movement: Edgar Ray Killen is indicted for the 1964 murders of Chaney, Goodman, and Schwerner.

Births

1256 – Gertrude the Great, German mystic (d. 1302)

1412 – Joan of Arc, French martyr and saint (d. 1431)

1878 – Carl Sandburg, American poet and historian (d. 1967)

1882 – Sam Rayburn, 48th Speaker of the House of Representatives (d. 1961)

1883 – Kahlil Gibran, Lebanese-American poet, painter, philosopher (d. 1931)

1924 – Earl Scruggs, American banjo player (d. 2012)

1925 – John DeLorean, American engineer and businessman, founded the DeLorean Motor Company (d. 2005)

1931 – E. L. Doctorow novelist, playwright, and short story writer (d. 2015)

Deaths

1448 – Christopher of Bavaria, King of Denmark, Norway and Sweden (b. 1418)

1852 – Louis Braille, French educator, invented Braille (b. 1809)

1919 – Theodore Roosevelt, colonel and politician, 26th President of the United States (b. 1858)

1993 – Dizzy Gillespie, American singer-songwriter and trumpet player (b. 1917)

2006 – Lou Rawls, American singer-songwriter (b. 1933)

The Not-So-Okay Corral

DOT Overrules Community Concerns about Delivery Bike Facility in Tribeca

The City’s Department of Transportation has ignored calls from Community Board 1 to address concerns of Tribeca residents before installing a cargo bike corral on Warren Street (between West and Greenwich Streets), to facilitate the use of powered bicycles when making grocery deliveries. To read more…

An End to Screen Time

City Announces Public School Admissions Changes with Significant Impact for Lower Manhattan

On December 18, Mayor Bill de Blasio and Schools Chancellor Richard Carranza announced that they were provisionally barring public middle schools (for at least one year, and possibly longer) from evaluating applicants based on academic criteria such as test scores, report-card grades, and attendance records, while permanently forbidding public high schools from giving admissions preference to students who reside with the same district as those schools.

‘We Have a History of Being Good Neighbors’

Non-Profit Outlines Plan for ‘Safe Haven’ Shelter on Washington Street

The administration of Mayor Bill de Blasio plans to create a homeless shelter at a historic building on Washington Street, in the Greenwich South neighborhood of Lower Manhattan, in partnership with a highly regarded non-profit, the Center for Urban Community Services.

“This facility will not for warehousing,” said CUCS’s chief operating officer, Douglas James. “We aim to move people from the streets to permanent housing.”

Clamping Down on Vice

Niou Joins Lawmakers Calling for Rollback of NYPD Unit

State Assembly member Yuh-Line Niou has joined a coalition of elected officials calling on the New York Police Department (NYPD) to investigate and possibly disband the troubled Vice Unit, which has been plagued by allegations of bias and corruption in recent years. To read more…

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