The conventional wisdom, following the release and acceptance of the report of Bay Area Economics on alternative sources of funding for operating and maintenance expenses of Brooklyn Bridge Park, is that construction of luxury housing and a hotel on portions of the park’s land will be necessary to fund those expenses.
The Real Deal: Increasingly, it appears as though the city will build additional condominiums to fund maintenance of the Brooklyn Bridge Park, despite community opposition. The Daily News reported that city officials recently cut the park’s budget 20 percent to $44 million, from the initial $55 million pledge, and said the remaining money could be in jeopardy unless politicians can come to an agreement and sign off on the condo project. A recent report suggests the park would require a $16 million annual upkeep budget, but that the park could only raise up to $7 million per annum if it depends strictly on new fees and parking revenue.
But, wait! Is funding from PILOTS (Payments in Lieu Of Taxes) from residential and hotel properties a secure source of funding, in light of what was revealed at the meeting of the Brooklyn Bridge Park Corporation’s board of directors last week.
New York Daily News: There’s more money trouble for Brooklyn Bridge Park after one of the fancy condo buildings officials were counting on to pay for park upkeep got its city tax bill slashed.
Luxury condo owners at One Brooklyn Bridge Park got a $1 million chopped off the bill – by mounting a challenge to their city tax bill and successfully getting it lowered from $1.8 million to $800,000 a year.
That leaves a big hole in the park’s maintenance budget, which officials voted yesterday to fill by dipping into reserves.
This raises the question whether any projections of revenue to be realized from PILOTs on residential and hotel properties can be considered reliable, unless they are based on the most conservative conceivable tax valuation of those properties, as well as whether the real estate market in the foreseeable future will even support construction of these properties.
So, leaving aside the issue of the Watchtower properties (which may also depend on the vagaries of the real estate market, as well as the timing of the Watchtower’s move), what sources of funding can you suggest for park maintenance and operations?
