Authority approves new rent plan for 3 B.P.C. condos
By Julie Shapiro
The Battery Park City Authority approved a proposal Tuesday that will help some of the neighborhood’s residents but hurt the city’s affordable housing fund.
The authority’s decision means residents of three B.P.C. buildings — the Regatta, the Liberty View and the Cove Club — will not face the steep ground rent increases that were slated, which residents said were unfair. The authority will cap the increases at 25 percent and phase them in over 15 years.
The authority transfers its surplus each year to the city, which is supposed to use the money for affordable housing. The authority’s decision will cost the affordable housing fund $56.1 million over 15 years.
“I know that we’ve got duties and obligations [to the city],” said James Gill, chairperson of the B.P.C.A., before voting in favor of the proposal. “For me, however, this is a fairness issue. If we were to enforce the law to the nth degree, [some B.P.C. residents] would be getting a whopping increase.”
That increase would be so out of proportion with what other B.P.C. residents are paying “that it’s not even funny,” Gill said.
Residents at the Regatta, for example, already pay $841 a month in ground rent, while residents of other Battery Park City buildings pay as little as $30 a month. Each building’s ground rent was negotiated individually with each developer, based partly on the economic climate, which is why the ground rents vary so widely.
Before the authority’s vote, the Regatta’s ground rent was slated to go up to 6 percent of market value as of April, or $2,157 a month, but now it will rise gradually.
“That’s terrific,” said Gene Glazer, president of the Regatta’s condo board. “I’m extremely pleased. It was, I think, the fair thing to do.”
But not everyone at the Battery Park City Authority thinks the proposal is fair.
Charles Urstadt, vice chairperson of the authority’s board, said the affordable housing money is essential for the city.
“We’re not talking about peanuts,” Urstadt said. “Low-income tenant groups are being discriminated against in favor of the tenants in Battery Park City.”
Urstadt acknowledged that the sharp increase would be jarring to condo owners in the three B.P.C. buildings, but he said the authority has a larger responsibility to the city. Urstadt wanted to see a written statement from the city agreeing to the proposal before he would vote in favor of it.
Gill said the authority spoke to the city about the proposal but did not get a written response.
“They’re not jumping up and down, but they didn’t say no,” Gill said.
City officials declined to comment on the proposed adjustment a month ago. This week, Andrew Brent, a spokesperson for the mayor, released a statement to Downtown Express that hinted at endorsing the authority’s plan.
“We recognize the authority is faced with the challenge of balancing a variety of needs, which include both raising revenue and maintaining a diverse mix of income levels,” Brent wrote in an e-mail to Downtown Express.
But he did not say if the city would continue to put the money from the authority toward affordable housing as it has in recent years. Mayor Michael Bloomberg agreed four years ago to put $130 million of the B.P.C. money toward affordable housing, which he has done, said Jim Cavanaugh, president of the B.P.C.A. Housing advocates had been calling on the city to end two decades of the “broken promise” to fund housing with B.P.C. money and the mayor agreed in 2005 to reverse the policy for at least four years.
Gill said this week that at least some of the money is not going toward affordable housing.
Urstadt suggested delaying Tuesday’s vote until the city clarified its position in writing, but Gill refused. The Regatta’s ground rent increase is slated for April, and the board already pushed the vote from December to this week’s meeting.
“We’re not going to hold this up,” Gill said. “Everybody is very, very anxious about this…. We owe it to them to take action and to take action today.”
With that, Gill called for a vote, and all the board members approved the proposal except for Urstadt. It was an unusual situation for the authority, where votes are nearly always unanimous.
Urstadt sounded disappointed after the vote but joked about his lone-dissenter status.
“Vox clamantis in deserto,” he said, then translated: “A voice crying in the wilderness.”
One of Urstadt’s concerns about the proposal was that it would become a precedent for the 10 other buildings in Battery Park City with ground rent increases coming up in the next several years. Urstadt worried that those buildings would also get a break from the authority, further reducing the amount of money that goes to the city.
“I don’t believe acting today sets a precedent,” Cavanaugh said after the meeting.
None of the other 10 buildings will see their ground rents rise as high as the Regatta, Liberty View and Cove Club, though residents in those buildings also say they deserve relief.
Pat Smith, a Battery Pointe resident, is concerned that ground rent for him and his neighbors is going to double from $212 a month to $453 in 2012.
“This spike in the ground rent will cause enormous hardship and disruption,” Smith said. “You’re going to have vacancies and defaults. You’re going to have people priced out of their homes.”
The authority put Battery Pointe and other buildings on hold while negotiating with the Regatta, Liberty View and Cove Club, and Smith expects the authority to restart the discussions with his condo now. He said Battery Park City residents already pay far more than other city residents, since they pay PILOTs (payments in lieu of taxes) equivalent to their property tax and maintenance charges in addition to the ground rent.
“One has to question why you would levy [the planned increase] if the authority is already generating substantial surpluses,” Smith said.
Smith does not object to some increases in ground rent, but he wants them to be smoothed out over time rather than coming suddenly.
“We will always talk to any interested stakeholder,” Cavanaugh said after the authority board meeting. “We always have an open door — but that simply means we’ll listen.”