Valediction: Robert Serpico

After 30 Years of Helping Guide Community, BPCA's Chief Financial Officer Steps Down

Battery Park City Authority vice president and chief financial officer Robert Serpico: "I always knew the community had a bright future, but I could not have dreamed that it would be this positive. I feel privileged to have had a seat at this table for 30 years and to have been able to help contribute to what's out there now."Battery Park City Authority vice president and chief financial officer Robert Serpico: "I always knew the community had a bright future, but I could not have dreamed that it would be this positive. I feel privileged to have had a seat at this table for 30 years and to have been able to help contribute to what's out there now."

“It’s a home run,” Robert Serpico, the retiring vice president and chief financial officer of the Battery Park City Authority (BPCA) says, looking out the window of his office in Brookfield Place. “The mix of residential and retail and commercial development, with one-third of the land set aside for parks and public space, plus museums and memorials, public art and cultural facilities, two coves, two community centers, three public schools, and a mile-long Esplanade. It looks pretty damn good out there.”

The pride is evident in Mr. Serpico’s voice as he enumerates the virtues and successes of the community. But he very nearly never set foot in the place. “I was recruited by an executive search firm to come aboard as comptroller in 1986,” he recalls, “but my entire career had been in the private sector, and my first reaction to the idea of working in government was, ‘are you kidding?’ But I found that this wasn’t government as I knew it then, or as many people know it today. The Authority is actually a quasi-governmental organization run as a small professional group with a specific mandate. And it is independent.”

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Mr. Serpico arrived at a crucial time for the community. “A little more than a decade earlier, this section of the Hudson River waterfront had been a district of rotting piers. But the Authority’s first chairman, Charlie Urstadt, had demolished the piers and created the landfill, and on the seventh day he rested.” During the fiscal crisis of the late 1970s, the Authority oversaw the development of Gateway Plaza, but other building projects stalled, and the agency’s finances became precarious. The boom of the early 1980s brought renewed interested in New York’s newest neighborhood, however. “When I got here in 1986,” Mr. Serpico recalls, “Gateway Plaza was open, and was established as the residential anchor for the neighborhood.” What was then known as the World Financial Center (now Brookfield Place), was nearing completion, “and would become the commercial anchor.”

Around this time, the Authority completed a new master plan that would govern development within the community for decades to come, and also issued a new round of bond debt. “That was the BPCA’s financial independence day,” Mr. Serpico recalls. “We repaid the State, with interest, all the help we had received during the fiscal crisis. And we no longer had to depend on the City or the State for a dime.”

“At that point,” he reflects, “the project had three important things going for it: the master plan meant that developers knew what the neighborhood was eventually going to look like, the bond issue meant that developers didn’t have to worry about the BPCA not having the funds to complete the project, and the Authority’s independence protected them from politics. So three kinds of risk that builders usually worry about were gone.”

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It was then the original vision behind Battery Park City kicked into high gear. “What Charlie Urstadt had created with the landfill was some of the most valuable land on the planet,” Mr. Serpico reflects. “So over time, there was almost no way for it not to succeed.”

“We began to develop in stages,” Mr. Serpico recalls, “moving south first. The master plan guaranteed that we would always have a lot of parks and public space. But we adapted as we went along, shifting away from small apartments for single professionals and young couples without children to larger units, where families would live. That was a conscious decision to make this more of a neighborhood.”

“We also gave up development space to create the ballfields, which were not part of the original master plan,” he recalls. “There are always voices at the table who say, ‘let’s put a building there and make a ton of money,’ but the richness of this place is the mix. Yes, there would have been a lot of ways to squeeze more money out of waterfront land on the Hudson — but it would have been just another line of buildings, instead of the neighborhood it has become. It would have been crazy to have developed this place any differently.”

Along the way, he says, “we also served the greater good in New York by funding affordable housing, albeit mostly elsewhere, but some here. We’ve produced $3 billion that we’ve given to New York City over the years. All from an original investment of $200 million in seed capital by the State, plus some vision.”

“And look at what has come from that,” he says. “How many jobs were created by this infrastructure and these buildings? How many billions in revenue from payroll and sales taxes? If you take the cumulative multiplier effect of everything the BPCA has generated, the economic activity of people living and working here, then even the billions in excess revenue we’ve given to the City is just a side number.”

There were moments when he was (if only briefly) less optimistic. “The market crash in 1987 hurt New York real estate,” he recalls, “and the 2008 financial crisis made everybody wonder where the economy was headed.” In the days following the terrorist attacks of September 11, 2001,” he notes, “nobody wanted to live, work, or invest in Lower Manhattan.” And storms like 2012’s Hurricane Sandy have also inflicted serious setbacks to the community. “Along with longevity comes a few cataclysmic bumps in the road,” he reflects. “But without an organization like the Authority guiding and bolstering the community, categorically and unequivocally, all of those endings would have been less happy.”

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Looking to the future, Mr. Serpico sees challenges both mundane and momentous. “Like any asset, this land and these buildings age and deteriorate. So you need a plan to maintain and renew that asset, even when it comes to things like restoring the pilings that support the landfill.”

In terms of existential questions, he says, “the big discussion is now that we’re built out, what do you do now? Has the BPCA completed all its mandates and do you phase it into the fabric of the City? Or do you keep this entity doing what it does so well? Is the evolutionary cycle done?”

“One of two things are going to happen, Mr. Serpico predicts. “The first is that the land is sold back to various constituencies — the residents and the commercial operators, like Brookfield.” In that scenario, he says, the Authority would likely cease operations. “The second is that the terms of the ground lease, which currently ends in 2069, are extended, and things continue like they have, but farther into the future.”

“One way or the other,” he says, “the public sector is going to have to make a decision — either extend the leasehold or sell the land and get out of the business.” Of these options, Mr. Serpico favors the first. “I believe the community would be less successful as part of the City,” he says. “You just wouldn’t get the attention and focus that you need, and I don’t think it would be as well-managed.”

Another pivotal challenge facing the community, Mr. Serpico notes, is resilience. “You could build a wall around Battery Park City and protect the place, but this has to be thought out in the bigger scheme. You can’t do it unilaterally or in an isolated way. The last thing we want to do is protect Battery Park City and push water across the street onto our friends at the Port Authority,” at the World Trade Center site.

After leaving the BPCA, Mr. Serpico is looking forward to the arrival of his first grandchild, in January, and to teaching a future generation of public servants about how to replicate the success of Battery Park City. “I’d like to give a university course about how and why public-private partnerships like this Authority work,” he says. “In so many ways, this is a model to follow.”

“I always knew the community had a bright future, but I could not have dreamed that it would be this positive,” Mr. Serpico reflects. “I feel privileged to have had a seat at this table for 30 years and to have been able to help contribute to what’s out there now.”

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