BPCA Plans to Issue $400 Million in New Debt to Safeguard Community Against Climate Change
The Battery Park City Authority (BPCA) is poised to issue approximately $400 million in new bonds later this year, to finance resiliency measures designed to protect the community from flooding as a result of storm surges and rising sea levels associated with climate change. This follows a $72.8-million bond issue in 2019, proceeds from which were similarly earmarked for resiliency measures. (That was on top of $27.2 million in other new borrowing that the BPCA also issued in 2019, along with $572.8 million in refunding of existing bonds, for a total of $672.8 million in bond debt that year.)
The Authority now projects that when all of its resiliency projects are completed, around the year 2027, the total price tag for the combined measures will be approximately $1 billion. This represents an increase by a factor of greater than three above the original estimate of the outlays for residency measures. At an October 2, 2018, open community meeting, BPCA president B.J. Jones said, “the overall resiliency cost for all phases is about two-thirds of our five-year capital plan request,” referring to the then-planned 2019 bond issues. “And that comes out to about $300 million.” In the years since those preliminary estimates were circulated, detailed coastal modeling and updated sea-level rise projections have triggered significant increases in the design flood elevations (DFEs) of the projects. Those higher DFEs have necessitated more intensive and costly interventions than were originally contemplated when the projects were initially conceived.
For context, New York City plans to spend in the range of $5 to $7 billion on the Financial District and Seaport Climate Resilience Master Plan, covering the mile-long stretch between the Brooklyn Bridge and the Staten Island Ferry Terminal. This plan envisions extending the shoreline of Manhattan between 60 and 200 feet into the East River, with a series of interlocking berms, platforms, and floodgates, all designed to hold back waters from climate change, sea-level rise, and extreme-weather events.
The new bond issue the Authority plans for this spring will carry a sustainability certification, making it part of an emerging trend in the debt markets. The BPCA expects to float further bond issues in the next few years, in the range of an additional half a billion dollars, to fund these resiliency plans.
The BPCA has already completed the first of its major residency initiatives, hardening the Battery Park City ball fields from the kind of flooding that destroyed the fields during 2012’s Hurricane Sandy. It plans to embark soon on the second of these, the South Battery Park City Resiliency Project, a multi-year initiative to demolish and rebuild Wagner Park, Pier A Plaza, and portions of the Battery to add resiliency protections for a broad swathe of Lower Manhattan. Implementing this design (which has been stalled, at least temporarily, as a result of litigation initiated by opponents of the plan) is expected to cost at least $221 million.
The Wagner Park project is envisioned as a hinge point, linking to other resiliency plans, as part of the overall Lower Manhattan Coastal Resiliency Project. The third and fourth phases of this undertaking have been consolidated into single plan, now under development and known as the North/West Battery Park City Resiliency Project, which will erect flood barriers along both the western and northern phases of the esplanade, extending into western Tribeca.
“While other communities across New York City and State must vie for project funding and prioritization, Battery Park City residents and property owners are fortunate to live in a community that has a dedicated funding source to fully meet its operating and capital needs, including our critical resiliency work,” said BPCA spokesman Nick Sbordone. “Additionally, BPCA’s high credit rating and bond authorization enables us to finance our projects quickly, and at lower cost. We are eager to continue our urgent work in partnership with the City of New York to protect Battery Park City and Lower Manhattan from the severe weather and rising seas wrought by climate change.”