Battery Park City Authority Collects and Spends Hundreds of Millions
At the April 3 meeting of the Battery Park City Committee of Community Board 1 (CB1), representatives of the Battery Park City Authority (BPCA) provided an update about the finances of the State agency that governs the 92 acres between West Street and the Hudson River. In 2024, the BPCA collected $382 million, almost all of it from two primary revenue streams: payment in lieu of taxes (PILOT) and ground rent. Both of these are rooted in 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 (currently through June 2069) from the BPCA, in exchange for yearly payments of ground rent. The Authority collects PILOT on behalf of New York City, which is meant to be the equivalent of a property tax. (The “equivalency” and “in lieu of” caveats arise from the fact that it is not legally possible to levy property taxes on any party other than the owner of that property, in this case, the BPCA, which, as a government entity, would not be liable for such obligations.)
The revenue split between ground rent and PILOT was 15 percent (or $57.3 million) from the former and 78 percent (or $298 million) from the latter. (The remaining seven percent came from ancillary sources of revenue, such as hotels in the community, North Cove Marina, and investment income.)
Of the $382 million it collected last year, the BPCA spent $149 million on its operations. More than half of this ($87.1 million) went to interest payments on the Authority’s $1.07 billion in bond debt. Approximately $47 million was allocated to salaries, maintenance, parks programming, and other operating expenses. And $13 million was categorized as “other.”
After funding operations, the BPCA’s entire surplus of $234 million was disbursed to three recipients. The proportion corresponding to PILOT (or almost 80 percent: $183 million) went to the City’s General Fund, the same destination that would receive funds from traditional property taxes, if these were applicable in Battery Park City.
Another 20 percent (or approximately $47 million) went into the “Joint Purpose Fund” (JPF), a repository that accumulates a balance that is earmarked for any project agreed upon by three parties: the BPCA (representing the Governor), the Mayor, and the City Comptroller. An agreement negotiated last year has pledged $500 million of JPF funds to underwrite affordable housing throughout the five boroughs of New York City. Of that target, $144 million has been paid into the JPF by the BPCA, and disbursed to the City’s Housing Development Corporation.
The final two percent of disbursements ($5 million) was allocated to a onetime payment (agreed upon last year by Governor Kathy Hochul, after a grassroots campaign organized by Lower Manhattan activists, pushing for more local housing affordability) to support additional rent-restricted units in the residential tower planned for Five World Trade Center.
For 2025, the BPCA capital budget calls for expenditures of $400 million, the vast majority of which will be spent on resiliency projects. The North/West Resiliency plan, which aims to create an integrated coastal flood risk management system stretching from First Place (near South Cove), running north along the waterfront esplanade to Stuyvesant High School, across to the east side of West Street, and terminating at a high point in Tribeca, near North Moore and Greenwich Streets, will receive $233 million. This amount is essentially a downpayment on North/West Resiliency’s overall projected budget of $1.6 billion, which is expected to be spread across five years of construction. And the South Resiliency plan (which is focused on Wagner Park, and nearing completion) will get $140 million.
While the BPCA currently carries bond debt of slightly more than $1 billion, it is expected to issue new bonds (starting later this year) to help cover the cost of North/West Resiliency plan.