Tobacco Warehouse Shell Game?

By on November 10, 2010 6:49 pm in brooklyn bridge park, DUMBO, Landmark Preservation

The Tobacco Warehouse, that picturesque, roofless shell of a 19th century structure that stands on the west side of Water Street, near the Dock Street intersection, in DUMBO, has become the latest point of contention in the battle over whether the costs of operating and maintaining Brooklyn Bridge Park should be defrayed in part by revenues from residential buildings and a hotel to be built on a portion of the Park’s footprint. Some opponents of housing in the Park hope that revenues generated from commercial use of an adaptively renovated Tobacco Warehouse could produce enough revenue to at least offset the need for some of the housing.

Brooklyn Paper: Last month, state Sen. Daniel Squadron (D–Brooklyn Heights), Assemblywoman Joan Millman (D–Boerum Hill), Borough President Markowitz and others demanded that Regina Myer, the president of the [Brooklyn Bridge Park Corporation], reveal the names of companies seeking the Tobacco Warehouse renovation contract.

But Myer, who had promised transparency in the bidding process, declined to cough up the bids, worrying some locals that the Tobacco Warehouse project will fail to generate enough revenue for the park’s annual maintenance budget to allow park developers to abandon their plan to include housing inside the sprawling park.

Others, however, oppose redevelopment of the Tobacco Warehouse, contending that it should be preserved in its present condition, to be used as an outdoor recreation space.

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  • Publius

    Please. As if a commercial entity at the Tobacco Warehouse could generate anywhere near the smallest fraction of the estimated $15+ million annual BBP maintenance nut.

    The only way that would happen if if the Tobacco Warehouse is turned into an open air illegal drug bazaar. That revenue generator could likely cover the operating expenses of the entire park, plus generate a nice profit.

  • Eddy de Lectron

    Is there a way to see a detailed breakdown of that $15+ million “maintenance” budget? $1.25 million a month to maintain a park seems kind of high…

  • http://deleted Buddy11210

    Publius: There you go again with scare tactics and mis-info. How much has the Tobacco Warehouse produced in the past 5 years of its open-air events (with all or most of the money going straight to the Conservancy to pay for their 21 staff member salaries)? $1million per year is what is known. So, the TW doesn’t have to pay all the cost for the park because there are other sources of funds, but as a building inside the park, it should contribute something, shouldn’t it? Eddy: You are, of course, right. The M&O budget is wildly inflated – no where near $15 million is needed. But for housing in the park enthusiasts, for “eyes on the park”, that budget will insure the bulbs get planted and lawns manicured for luxe condo owner’ enjoyment and yours, as you pass through with nothing else to do there.

  • Publius

    @Buddy: You’re proving my point. $1 million in gross revenue? How about the net revenue? Let’s assume there are no costs to provide the service that grosses $1million/year. Still that’s less than 7% of the park’s maintenance budget. Why so cynical “Buddy”?

    Eddy: $15 million would be a very unrealistic figure for a standard park, but BBP is not a standard park. Each of the piers is on old wooden pilings that are in a constant state of decay due to marine organisms that eat away at the foundations. There are thousands of wooden pylons that support the park. It’s a well known and well established fact that any waterfront park, especially one built on salt or brakish water will have much higher operating costs than a standard park.

  • DrewB

    It seems like a totally no brainer. Develop that building to add to the revenue stream. Any additional revenue reduces the amount of new buildings. What possible down side is there, unless you REALLY REALLY want housing in the park so you are against any none housing revenue stream.

  • Publius

    @DrewB: My life experience indicates that whenever anyone calls something a “no-brainer”, it’s actually something that requires a lot of scrutiny and rarely turns out to be a “no-brainer”.

    Do you think reducing 7% (generous estimate not taking into account costs of goods sold) of an annual budget would make any difference in the need for the other 93% of the budget?

    I don’t have a axe to grind about being for or against housing like many others on this blog. My point is that people need to be realistic about raising annual operating revenue. Low single digit annual revenue generators ain’t gonna cut it.

  • http://www.myhomebrooklyn.com Donald Brennan

    RFP does not require winning proposal to generate excess profit – ie make payments to the park corp in exchange for using the site.

  • http://www.brooklynbridgepark.org Samantha Dodds

    The Brooklyn Bridge Park Conservancy would like to clarify a few of the statements that have been made regarding the Conservancy’s size and the revenue generated from the Tobacco Warehouse. The Conservancy has 6 full-time staff members who work to provide free, public programming in Brooklyn Bridge Park year-round. This past year our educational programs served over 5,000 children from all over Brooklyn and New York City. Over 70,000 park-goers enjoyed our free programs including our 11th annual Movies With A View Series, free boating program, Waterfront Workouts, and family festivals like Spring Fling and a new Fall Harvest Festival. Our Green Team volunteers logged over 1,800 hours of community service this season under the leadership of Conservancy staff.

    During the 5 years (2004-2008) that the Conservancy acted as the permitting agent for State Parks the total, cumulative, income generated was approximately $500,000 from private rentals of the Tobacco Warehouse and Empire-Fulton Ferry Park. This revenue was split between State Parks and the Conservancy – half going to State Parks general budget and the other half to support the Conservancy’s direct public programming costs.

    The Conservancy works to help ensure the park is fully funded and built and reaches its full potential to serve the citizens of Brooklyn, New York City, and beyond. We are thrilled to continue to provide free programs and stewardship activities that bring Brooklyn Bridge Park to life.

  • http://brooklynbridgepark.org Nancy Webster

    The Brooklyn Bridge Park Conservancy would like to clarify a few of the statements made above regarding the Conservancy’s size and the revenue generated from the Tobacco Warehouse.

    The Conservancy has 6 full-time staff members who work to provide free, public programming in Brooklyn Bridge Park year-round.

    This past year our education programs served over 5,000 children from all over Brooklyn and New York City. Over 60,000 park-goers enjoyed other free programs we produced or facilitated, including our 11th annual Movies With A View Series, free boating, waterfront workouts, Tug and Barge Week, and family festivals like Spring Fling and a new Fall Harvest Festival. Our Green Team volunteers logged over 1,800 hours of community service this season under the leadership of Conservancy staff.

    During the 5 years (2004-2008) that the Conservancy acted as a permitting agent for State Parks the total, cumulative, income generated was approximately $500,000 from private rentals of the Tobacco Warehouse and Empire-Fulton Ferry Park. Fifty percent of this revenue went to State Parks and the other half was used by the Conservancy to help fund out-of-pocket expenses for free, public programming in the park.

    The Conservancy works to help ensure Brooklyn Bridge Park is fully funded and built and reaches its full potential to serve the citizens of Brooklyn, New York City, and beyond. We are excited to continue to provide free public programs and stewardship activities that help bring Brooklyn Bridge Park to life.

    Nancy Webster
    Executive Director
    Brooklyn Bridge Park Conservancy

  • nabeguy

    Whoa. Based on the cut-n-paste double post from the Conservancy members, it would appear that Buddy11210 is the one spreading the mis-information.Not 21 members, but 6. Not $1 mil per year, but $100k. I’m not sure what to make of these disparate claims. $500K over 5 years has a whiff of mismanagement to it given the unique nature of the space. I would have thought that the Republican Governor’s Association party back in ’04 would have been good for at least $100k. I guess it was all downhill from there.

  • http://selfabsorbedboomer.blogspot.com Claude Scales

    I think there may be confusion between the Brooklyn Bridge Park Corporation, which is an entity created by the City to manage the development, operation and maintenance of the Park, and the Brooklyn Bridge Park Conservancy, a non-governmental citizens’ organization that promotes the development of the Park.

  • Gary VanderPutten

    While the TW generated money, it was by no means a gold mine. It was mostly a fair weather facility for private and free public programming, the latter paid for by the former. This balance was not acceptable to all, some objected to the ever-present tent and restrictions to access to the TW because of it. The venture did prove that the site could be preserved and still generate some revenue for the park. However, if you consider the conceptual plans put forth by Tom VB, they marry the idea of temporary roll-back enclosure with open space and this combination might generate more revenue than before, and it would not violate the space. It’s real programming potential in this mode has not be fully explored.

  • Eddy de Lectron

    @ Publius,
    Sorry, I’m not buying it, at least not the short answer. I understand the construction of the piers, salt water, etcetera… It makes a great smokescreen to siphon off a lot of money. I want to know specifically what maintenance will be necessary once the construction and remediation of the piers is complete.

  • Publius

    @Eddy:

    You don’t have to buy the short answer. Everyone has the right to see a detailed accounting of the estimated maintance budget.

    Remember that in any large capital project there are two budgets: The capital budget for inital build or renovation and a separate ongoing maintenance budget.

    The facts are that ANY water front park built on piling that are immersed in salt or brakish water, especially one as large as 1BBP need significant and expensive ongoing maintenance. The idea that the pilings are rehabilitated once and then you’re set is just not the case. Each year millions will either need to be spent or escrowed for future years to maintain the piers. It’s VERY expensive to maintain such a park–which is why there are very few of this type. An alternative would have been to essentially destroy the existing piers and rebuid them requiring less costly ongoing maintenance, but I don’t think the capital budget would have been there for that long-term cost saving approach.

    And of course, the piers are just one expensive component of this special park. There’s a significant amount of upkeep of the fixtures such as the fields yet to be built, the uplands, the playgrounds, the maintenance staff, security, environmental compliance.

    Remember that when completed several years from now, BBP will expend all the way down to the Con Ed plant in Dumbo. It’s a very large park, mostly on salt water, and the maintenance to keep it a world class park is likely n the tens of millions.

    If you’re calling for transparency as to where that money gets spent, that’s fine. The public should see the budget.

    My point is no one should arbitrarily pick an annual maintance budget number out of thin air and then justify one’s opinion on how the onging park maintenance should be funded (such as housing or no housing). Let’s stick with the facts. This means housing opponents need to understand the real costs of maintaing this park when completed, and parks officials need to be completely transparent with their budgeting and vendor selection process

  • bklyn20

    I am later to this discussion than I’d like to be, but the Tobacco Warehouse does not have to support all the maintenance costs of the park. And without looking at the BBPDC website, aren’t maintenace AND capital costs being lumped into the budget figures that are supposed to justify the aditional housing? The park is supposed to be self-sustaining only for its maintenance budget, and not for its capital budget.

    Every entity, building, restaurant and the like in the park must contribute to the Park’s maintenance budget. In this vein, the Tobacco Warehouse can be an arts/cultural vehicle without turning itself into a tacky South Street Seaport East. The Warehouse must not be run by another group (like St Ann’s Warehouse, etc.) because any revenue should go directly into the park and not into another entity’s coffers. The ever-present tent should be replaced by a variety of uses, including the occasional tent.

    It’s pretty amusing that those asking that the Tobacco Warehouse RFP process be revealed are decrying the lack of “transparency.” Many of these same people were very supportive of the “opacity” that brought housing into the park in 2004 with ZERO public process. Yes, the BBPDC should and must show the RFPs and the bids. They should also support their whopping budget with greater documentation– right now it’s more of a “because I said so” budget statement than anything else. And aren’t the BBPDC’s stated costs higher than those of Hudson River Park, the other big waterside park around here?

    Also — the “alternative” Tobacco Warehouse proposal shown above still lists the Vinegar HiIl Neighborhood Association as supporting their plan, as well as the Dumbo Neighborhood Alliance. It is my understanding that neither the Vinegar Hill nor the Dumbo group has signed on to this proposal. Is the Dumbo Neighborhood Alliance the main Dumbo group? I thought DNA, the Dumbo Neighborhood Association, was the longtime legitimate group and group name?

    Regarding the Conservancy: My family and friends have attended a number of their programs in the park and enjoyed them. All the same, I thought that the Conservancy was supposed to be the public voice of the park — that language was on their website in the past. Judging from the latest City Council and State Senator results, the voice of the public is not in favor of housing, or certainly more housing, in Brooklyn Bridge Park. The Conservancy also served to aid and abet the introduction of the housing plan with, yes, I will say it again, ZERO public process. Admittedly, this was under the Conservancy’s fomer leadership, but I do think the Conservancy is serving more as a goodwill ambassador for the BBP Development Corp than as an advocate for a great park for Brooklyn and all of NYC.

  • epc

    I hate to ask this but…what, if any, revenues are expected from the Carousel? Do they go back to the park or are they used to make the Carousel self–sustaining?

  • bklyn20

    If I recall correctly, almost all (as in c. 90%) of the carousel revenues will go to making the carousel self-sustaining. Got to pay for some locavore hay for the wooden horsies, I guess.

    I think that soon the park will have to create its own oxygen in order to fit the BBPDC definition of self-sustaining.

  • Publius

    NY1 has a nice piece on BBP this morning: http://bit.ly/bsjuC6

  • Montragrue

    Community Meeting to review Tobacco Warehouse RFP Responses

    Monday, November 15 at 4:00 pm
    Brooklyn Borough Hall, Courtroom

    Please RSVP to Elizabeth Ernish at eernish@brooklynbp.nyc.gov or (718) 802-3893

    This meeting is open to the public.