Housing Costs and Predictability in Battery Park City
BPCA president and chief executive officer B.J. Jones
At the Battery Park City Authority, we make it a point to regularly communicate with our community’s residents—renters and owners alike—about our role in managing, maintaining, and improving this world-class neighborhood.
We do so at Community Board meetings and public events, during public board meetings, in our regular community newsletters, and via our Strategic Plan—and even as we encounter each other during our daily routines (as we hope to be doing more of soon).
In this letter, I’d like to talk to you about our role in addressing a concern we hear frequently—housing costs and predictability—and what we’re doing about it.
I deeply appreciate the weight of this issue for our residents, and am personally engaged in the matter on a daily basis. Over the past few months, a small number of individuals have advanced misleading and at times factually inaccurate statements about the status of ground leases and ground rent revaluations, along with the Authority’s position around—and control over—the common charges owners pay. While this rhetoric is unfortunate, the underlying concerns can be addressed in a mutually beneficial manner through constructive, fact-based dialogue.
The Battery Park City Authority (BPCA) is charged with management and maintenance of 92 acres of Lower Manhattan—an unprecedented organization enabled by the New York State Legislature in 1968, resulting in the creation of a neighborhood that’s now home to more than 16,000 residents in 30 residential buildings, more than 10 million square feet of commercial office and retail space, and 36 acres of open space. The revenue BPCA collects to support these efforts comes primarily from two sources paid by all commercial and residential buildings in Battery Park City: Payments in Lieu of Taxes (commonly known as “PILOT”) and ground rent.
PILOT is the equivalent of real estate taxes and is set by the City of New York, calculated for Battery Park City properties in the same way as property taxes are for all residential and commercial properties in New York City: the assessed value of the property as determined by the NYC Department of Finance, multiplied by the tax rate as set by the New York City Council. BPCA collects PILOT and has no ability to independently modify it.
Ground rent, by comparison, stems from the unique management and ownership nature of Battery Park City. The BPCA owns the land underlying the neighborhood, while buildings, commercial and residential, are owned and managed by real estate companies (in the case of rentals), and by homeowners (in condominiums). Unlike a typical transaction (in which land would be purchased for a lump sum before a building was built or sold), in Battery Park City, building owners and condominium owners pay an annual ground rent for an agreed-upon ground lease term for the use of land (to construct, operate, and occupy the buildings and residential units). While the ground leases in Battery Park City run through June, 2069, these leases established periodic ground rent revaluations, or “resets,” that occur at different times between now and 2069.
For Battery Park City homeowners, ground rent is charged to each owner as part of their overall common charges, which also typically include PILOT, building operating costs, payments for capital investments, and other assorted charges. Of this, ground rent comprises, on average, 16 percent of an owner’s common charges. PILOT, by contrast, comprises nearly half of the common charges, and is subject to the same adjustments and appeals process through the New York City Tax Commission. (Information on the assessed value of your property can be found at the below link and by reviewing with your building manager: https://www1.nyc.gov/site/finance/taxes/property-assessments.page) The bulk of the remaining portion, about 35 percent, derives from each building’s maintenance and operating expenses as determined by the building’s condo board.
Among Battery Park City’s condominium buildings, the average ground rent component represents a wide range of values. We are in discussions with the Battery Park City Homeowners’ Coalition (the Coalition), and representatives of buildings that have the nearest-term resets (including one this year and one next year) to bring these into better alignment. In this way, we can provide economic stability for homeowners into the future while ensuring all buildings are paying an appropriate ground rent for use of the underlying land and in support of Battery Park City’s high quality of life.
Indeed, as these resets have come up in recent years, the Authority has worked to develop a structure for ground rent resets that achieves a series of public policy goals:
1) Addressing concerns about housing costs throughout Battery Park City. In July, 2020, BPCA signed a ground lease amendment for Gateway Plaza, preserving rent protection for 600 residents and their families in the neighborhood’s largest residential complex. Since then, we’ve also worked to establish a path for extending or expanding moderate and low-income affordability regulations in existing rental buildings. Without the reduction or elimination of PILOT (as described above), which would have to be granted by the City of New York, expansion of affordability is not currently an option. BPCA nonetheless continues working to extend existing rental affordability and predictability for longer terms.
2) Providing economic stability for homeowners who intend to remain Battery Park City residents over the long-term. For the vast majority of homeowners, ground lease resets are years, if not decades, away. In fact, 12 residential condominium buildings that negotiated an agreement in 2011 and 2012 do not have resets for nearly 20 years. For buildings with nearer-term resets, our work incorporates this goal directly, as we work to find alternatives to the fair-market value-driven resets that are present in most Battery Park City ground leases, which would be economically untenable. As a result, we are proposing payment structures for condominiums that consider both the Authority’s fiduciary responsibilities as stewards of public land and the cost impact on homeowners and building owners (and are doing the same for commercial and rental buildings). We have also committed to addressing, subsequent to our current effort with the Coalition on ground rent resets, concerns about the 2069 expiration of Battery Park City’s Master Lease and subtenant ground leases.
3) Fulfilling our financial responsibilities to maintain the neighborhood and support to the City of New York. Revenue the Authority collects from PILOT and ground rent—along with the daily work of our dedicated BPCA team—enables Battery Park City’s renowned high quality of life. In 2020, BPCA collected a total of $338 million dollars in revenue: $274 million (or 81 percent) in PILOT; $47 million (14 percent) in ground rent; and $17 million, (five percent) in other fees. Of this amount, 230 million (69 percent), was paid directly to the City of New York—$45 million of which was paid into a fund that supports affordable housing throughout the City. Prior to this distribution to New York City, revenues were invested to support and sustain Battery Park City’s current and future operating and capital needs.
Our work continues. And we expect these continued efforts will help to responsibly address concerns about ground rent while also advancing public policy goals—particularly, our shared priority of protecting the vibrancy and economic stability of Battery Park City over the long term.
By B.J. Jones
Can We Get It Right This Time?
State Legislature Passes Bill That Offers Path Forward on Affordability
Whoever is elected to the various offices representing Lower Manhattan residents today, they will have to grapple with a legacy policy failure that may yet reprise itself.
For more than a year, as local hotels emptied due to the pandemic, and various Downtown real estate projects stalled, Lower Manhattan leaders have urged elected officials to consider whether (and how) to convert commercial properties (such as hotels and office buildings) to use as residences. To read more…
Wagner Park, with its amazing gardens and views of the Hudson River and New York Bay, is the perfect setting to practice your art. Participants are expected to bring their own drawing and painting supplies, including drawing boards and containers of water if they are planning to paint. BPCA will supply drawing paper and watercolor paper only. Masks required. Participants must maintain six feet of physical distance between households. All programs will be held in accordance with New York State reopening guidance. Free
Get moving with a series of classes aimed to help you build strength, relax, and unwind. All cardio classes are 45 minutes long, with a focus on high-intensity rhythmic cardio. Classes also feature sprint intervals, sculpting, and a stretch cool down. Free
Namaste! Unwind from the day with outdoor yoga. Immerse yourself in this meditative practice- surrounded by the Hudson’s peaceful aura. Strengthen the body and cultivate awareness in a relaxed environment as your instructor guides you through alignments and poses. All levels are welcome. Participants are expected to bring their own equipment: yoga mat, yoga blocks, water, etc. Masks required. Participants must maintain six feet of physical distance between households. All programs will be held in accordance with New York State reopening guidance.
We often talk about Chinese food’s influence on global cuisine, but rarely about how the world has influenced Chinese cuisine. For thousands of years, exploration, trade, migration, and now the internet have brought innumerable ideas into China that have had a lasting impact on its food. On June 23, Junzi Kitchen’s Lucas Sin and 886’s Eric Sze will focus on two of Asia’s culinary capitals, Hong Kong and Taipei, to examine the ways in which these two cosmopolitan cities have served as culinary melting pots, to produce some of the world’s most delectable flavors. Free
EYES TO THE SKY
June 14 – 27, 2021
Milky Way of summer stars with streaming fireflies
As evening twilight deepens, a cosmos of blinking earthly stars attracts and mesmerizes stargazers in areas a distance from street and house lights. Fireflies are connecting our joy in the celestial with breathtaking wonder close around us. In the dark, over gardens, parks, backyards and countryside meadows and forests, our attention is lured away from the starry heavens by undulating streams of countless fireflies flashing. Floating, glowing ribbons of curved light drop from the treetops and move above the ground.
Unaware of time, I find myself alternately looking up to my favorite summer constellations, then stealing time to lower my eyes to the pulsating world of lightening bugs in the landscape all around me. Close above the west-northwest skyline, planet Venus makes a brief appearance at dusk today and is visible until nightfall by next week.
The Battery Park City Authority asks that the public not interact with or feed the urban wildlife in the neighborhood’s parks and green spaces, and at the waterfront.
9/11 Victim Compensation Fund Report
More Survivors than Responders Now are Submitting Claims
The September 11th Victim Compensation Fund (VCF) has released its annual report for 2020, which documents some significant developments.
Over the course of its ten years of operation thus far, the VCF has awarded $7.76 billion to more than 34,400 individuals who have suffered death or personal injury as a result of the terrorist attacks of September 11, 2001 and their aftermath. The vast majority of these injuries take the form of illness caused by exposure to toxic materials that were released by the destruction of the World Trade Center.
William Penn’s Treaty with the Indians when he founded the Province of Pennsylvania in North America, 1771
In 1771 Thomas Penn wanted a painting of his father meeting with the Native Americans. He commissioned Pennsylvania-born artist Benjamin West to capture the dramatic encounter on canvas. When finished, William Penn’s Treaty with the Indians reinforced the legends of friendship and peace established between cultures. Pennsylvania Academy of the Fine Arts, Philadelphia.
930 – World’s oldest parliament, the Iceland Parliament, established
1661 – Marriage contract for Charles II of England & Catherina of Portugal or why we drink tea at three
Throughout her turbulent life Catherina was plotted against, implicated in a murder and accused of plotting to poison the King. She suffered three miscarriages and therefore bore no heirs. Her husband fathered several.
She’s noted for introducing the drinking of tea to Britain for as a child of privilege in Portugal, as nobility, she indulged. Tea originated in China as a medicinal drink.
It was first introduced to Portuguese priests and merchants in China during the 16th century.Drinking tea became popular in Britain during the 17th century. The British introduced it to India, in order to compete with the Chinese monopoly on the product.
1683 – William Penn signs friendship treaty with Lenni Lenape Indians.
Some historians place the date of the treaty today in 1683, when Penn purchased two tracts of land from Tamanend and his associates. It is believed that transaction and the “Great Treaty” took place at the same time. West’s painting has a summery foliage “thus not suggesting a late autumn or winter day, as contended by Bancroft, but rather a day in the leafy month of June.” William Penn’s words when he met with with Tamanend and other Delaware chiefs, of the Turtle Clan, under the great elm at Shackamaxon, within the limits of Philadelphia, “We meet on the broad pathway of good faith and good-will; no advantage shall be taken on either side, but all shall be openness and love. We are the same as if one man’s body was to be divided into two parts; we are of one flesh and one blood.”
The reply of Tamanend, is equally noble: “We will live in love with William Penn and his children as long as the creeks and rivers run, and while the sun, moon, and stars endure.” There is no actual record of the “Great Treaty,” the treaty made familiar to many by Benjamin West’s painting and Voltaire’s allusion to it “as the only treaty never sworn to and never broken.” “Great Treaty” was never broken until the Penn’s Creek Massacre of October 16, 1755.”
1713 – The French residents of Acadia are given one year to declare allegiance to Britain or leave Nova Scotia, Canada.
1780 – American Revolution: Battle of Springfield fought in and around Springfield, New Jersey (including Short Hills, formerly of Springfield, now of Millburn Township.
1810 – John Jacob Astor organizes Pacific Fur Co (Astoria, Oregon)
1888 – Frederick Douglass is first African-American nominated for president
1931 – Wiley Post & Harold Catty took off for flight around world
1949 – First 12 women graduate from Harvard Medical School
1951 – British diplomats Guy Burgess and Donald Maclean flee to USSR
1959 – Convicted Manhattan Project spy Klaus Fuchs is released after only nine years in prison and allowed to emigrate to Dresden, East Germany
1972 – Nixon and Haldeman agree to use CIA to cover up Watergate
1974 – First extraterrestrial message sent from Earth into space
1985 – Bomb destroys Air India Boeing 747 in air near Ireland, 329 die
47 BC – Pharaoh Ptolemy XV of Egypt (d. 30 BC)
1858 – William Ernst Johnson, Cambridge England, mathematician
1894 – Alfred Kinsey, Hoboken, New Jersey, American entomologist/sexologist (Kinsey Report)Alfred Charles Kinsey was an American biologist, professor of entomology and zoology, and sexologist who in 1947 founded the Institute for Sex Research at Indiana University, now known as the Kinsey Institute.
1894 – Edward VIII, King of Great Brit/N-Ireland/emperor of India (1936)
1911 – David Ogilvy, advertising whiz (Ogilvy & Mathers)
1912 – Alan Turing, mathematician/pioneer in computer theory (Turing Machine)
1927 – Bob Fosse, Chicago Ill, choreographer/director (Cabaret, Damn Yankees)
79 – Vespasian, Roman Emperor, dies at 69
1980 – Clyfford Still, American painter (b. 1904)
1995 – Jonas Salk, biologist (Polio vaccine), dies of heart failure
1997 – Betty Shabazz, widow of Malcolm X, suffering from burns, dies at 63
2001 – Yvonne Dionne, one of the Canadian Dionne quintuplets (b. 1934)
2009 – Ed McMahon, American television personality (b. 1923)