Study Finds $250 Million Needed For Maintenance in Brooklyn Bridge Park

Crain’s New York reports today on a new study, commissioned by Brooklyn Bridge Park Corp., that recommends spending $250 million to maintain the wooden pilings on which the Park sits…money that would come from the two residential towers planned for Pier Six.

In this case, maintenance would require a $90 million upfront investment—a sum that the park contends could be covered by two controversial apartment buildings planned for the southern tip of the green space. The remaining $60 million would be paid out over the next 50 years.

“We are in an enviable position where we would have the funds available to make this large upfront payment,” said David Lowin, vice president of real estate for the corporation. “As anyone who follows city government knows—that is rare.”

The study says that this upfront maintenance will, long-term, be less expensive and more effective than maintaining the pilings on an as-needed basis, as is the current practice.

Details at Crain’s, which also includes a link to the study.

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  • Jorale-man

    Some interesting details in the article. But what I don’t quite get is why the BBPC seems to take such an all-or-nothing approach to this. Who says that high-rise development must be the only funding solution? How do other large parks support themselves? What about the old railroad structures that support the High Line, for instance? They must have had some funding sources that don’t involve building skyscrapers. This all underlines the fact this is a real estate deal first, with the park being a secondary issue.

  • DIBS

    It goes back to the basic “charter” under which this park was proposed. This subject has been discussed ad infinitum here.

  • Joe Dudas

    I know the High Line is only one example, but I think it was largely private donation money to fund a relatively smaller project. There are huge expenses associated with initial build and ongoing upkeep for infrastructure continuously exposed to salt water. Perhaps that’s why this project requires such huge sums of $ that only skyscraper rent can cover.

    And what @DIBS said.

  • KXrVrii1

    Actually, it appears that the High Line was also funded from skyscrapers:

    “In the book High Line, the park’s co-founders Joshua David and Robert Hammond explain how, in order to preserve the train trestle, the air rights above it would be sold off to developers to build a new neighborhood filled with soaring towers.”

    From an article about how the High Line has changed the neighborhood:

    This quote may also be relevant:

    “Still, what the High Line had catalyzed was unfathomable at the time. Glistening towers rising 20, 30, 40 stories into the air, pressed tightly together, casting cold shadows and blotting out the sky, all along the length of the park? Condos with their own personal swimming pools? Russian oligarchs stashing investment money in glittering vertical ghost towns? Who could believe this claustrophobic dystopian vision would ever be permitted?”

  • StoptheChop

    Scott Stringer has suggested issuing bonds– but BBPC is fixated on its own (development) course, regardless of impact.

  • R.O.Shipman

    Bonds cost more in the long run, and the funding still has to eventually come from somewhere.

  • Dean Collins

    Cracks me up when people complain about
    apartments in the park….a park that wouldn’t be there without the apartments in the first place.

    Yes you can complain about the height of the tower etc but folks….the park is now there for everyone to enjoy……it’s a done deal so move on to other petty squabbles.

  • Remsen Street Dweller

    And, do you also consider the time some of spent protesting the closing of our hospital to be a petty squabble?

  • Nat

    In the long run there is a huge financial surplus that could be used to fund the bonds. It may cost more. However, the benefit is preservation of park and improvement of the Atlantic avenue entrance. 3.1 acres seems like little. But the park is packed in the weekends. It is an amazing park, I,would like to see what they could do with more public space. The carrying costs are probably substantially less,than it,would cost the city to add 3.1 acres of waterfront park (or any park) anywhere in the city.

  • Park Guy

    Actually, if you check out the Park’s financial presentations, that huge financial surplus is only there WITH the Pier 6 developments. without the Pier 6 development, the Park runs a several hundred million dollar deficit – so there is no money to pay off bonds. Also, I don’t know where people are getting 3.1 acres from. The pier 6 sites are less than half an acre.

  • Nat

    I have seen them! (ad nauseum). On page 27 of the July financial presentation it is now stated that excess cash flow is “swept” back to the city (older presentations never showed the out years until Ten and team brought it to light). That is assuming no Pier 6 development.

    You, me, Ren Richmond, the Park staff, Barbara denham are all guessing about whether park maintenance could be realistically financed, If anyone in charge honestly wanted to find out, they could enlist a wall street firm to analyze it, price it, and have the edc or city issue it.

    I believe the 3.1 acres assumes not just the footprint of the buildings. If there were no buildings, then there’s less need for access roads and sidewalks, etc that could then be turned into park.

    I think the park would be better with more park.

  • Park Guy

    I just checked page 27. That is not a projection of what happens with no pier 6. If you read the footnote, it actually says it is not a projection. The projection of what happens without pier 6 is the page before – it shows huge deficits.

    The in order to get to 3 acres you’d have to include parts of the park that already exist. You can’t get rid of all the roads because there is a garage at One BBP. The 3 acres is just one of many ways that Richmond and his crew are being deceptive.

    While it is true that we are all guessing about the ability to finance with Bonds. It’s a pretty good guess that if you can’t show that you will have funds to pay them back, noone is going to lend you money. You don’t need a fancy wall street pedigree to know that.

    I also would love to have more park. But not at the price of putting the ongoing maintenance of the whole park in jeopardy. A couple of extra square feet of extra park is useless is you have no money to keep it up. This is n’t about having more park or less park, it’s about being able to take care of the park we already have..

  • Ursula

    It has been demonstrated that wrapping the wood pilings(as was done initially, is not sufficient in the long term to protect the piers’ support system; encasing the pilings in concrete is the way to go. The Port Authority invested $30 million wrapping the pilings underneath Piers 5 and 6 before the latter were even handed over for park reaction. Encasement is continuing underneath Pier 3.
    As to financing the M&O of Hudson River Park and the new, as yet unfinished park on Governors Island, accept the fact that private residential and commercial investments are the mechanisms.
    Count your blessings that BBP will preserve world-class views and not become a narrow alley lined with skyscrapers on both sides like the High Line. The latter is no longer worth a visit, and I wonder how long its “prairie” will survive.

  • Nat

    You are correct, sir! But the concept of excess long term funds is agreed by all parties. Its a question of when and how much. “Minor” changes in assumptions make a big difference. No one trusts each others assumptions.

    Why not wait a year or so, so there is less guessing? Why doesnt the Park want to go to Wall Street so they can make a more objective financial analysis? Why doesn’t the Park want to do all it can for more park?

    I don’t want to put the park in jeopardy. The result of seeking bond financing may be fruitless, or even result in some development. Just want to make sure no stone has been left unturned.

    And is the above story news? Isn’t this the same info that was released months ago? Crains just got,around to publishing, or is this the 2nd time?

  • RJG

    Those interested in reading the complete report about the park’s preventative maintenance options can find it at:

  • martinlschneider

    It has long been accepted that public funds will not be available to cover all the maintenance costs. The question is: How much is needed and when and, what will the actual cost of maintenance be? We cannot trust the Park Corporation after the horrible example of the overbuilding at Pier One.

  • RJG

    Exactly what about the 77 page report from the engineers and maritime consultants do you disagree with? Perhaps you could feel a little less anxious if you actually read the report and evaluated the data.

  • Park Guy

    The concepts of excess funds WITH pier 6 is agreed by all parties. The Park vehemently disagrees with the concept of excess funds without Pier 6, as shown very clearly in the presentation you just cited before. The Park has shown very clearly the without Pier 6 they will be hundreds of millions of dollars in debt. And if you are so deep in debt, then you can’t afford to pay for bonds. It’s really very simple. Don’t let Ren fool you. Just because he sounds like he understands the numbers behind all of this does not men you should trust his conclusions.

    And regarding the idea of waiting: Nothin will be learned in a year. The short term projections are not really up for debate. What we don’t know is what will happen in 20 or 30 years. Even if we wait till next year, we still don’t don’t know what will happen in 30 years. Don’t fall for Ren’s empty rhetoric.

  • Andrew Porter

    Much of the Nazi conquest of Europe was a done deal, but there were some who thought otherwise. “Done deal” has a nice ring, but the results can be changed.

  • martinlschneider

    The report, commissioned by the Corporation

    , states that the huge upfront cost will be offset by saving $84 million over 50 years. That’s peanuts. And hardly justifies another oversize, sky-blocking monster building. Let’s have an alternate study, not done by a regular employee of the Corporation but by an objective firm. That would be a good start toward a believable study.

  • Nat

    From what I’ve seen, Ren and the park’s models both show the same curve with an eventual positive and increasing cashflow. Having negative cashflows during a period of heavy spending (how much and for how long is the debate) is typically the reason for most initial bond financing.
    I don’t entirely trust rens numbers, or the parks, or most. They all may have some personal gain driving them.

    But, the long term income projections are based on projected tax rates and rental incomes built off of comparable real estate developments (what and where is part of the argument). Rens point (i think) is that you won’t have to use comparables for pier 1, John street and empire store incomes if you wait a year or so. If I were issuing a bond, I’d assess whether we could wait in order to lower the risk. The issuers personal incentive is to get paid, but also not to exaggerate the bottom line in either direction.

    I hope this is not boring people (making this the Brooklyn Heights Boring Blog). If you want to chat, I am in the pierrepont playground until 3 (wearing the black cap)

  • Park Guy

    Really? Comparing the building of a building on Pier 6 to the Nazi conquest of Europe? Really? You don’t think that makes you look a just tiny bit ridiculous and lacking in any perspective?

  • Park Guy

    And who’s going to pay for that study?

  • Park Guy

    Nope. Not without Pier 6. Without Pier 6 the Park’s numbers go into the red in about 10 years and never recover. Look more closely.

    ALso waiting a year will tell you what next’s years taxes are, but taxes vary from year to year. Just because we’d know what next years taxes are does not mean we’d be any closer to projecting what taxes on those properties will be in 30 years. And that’s where the real risk lies in this model.

    The idea of waiting is always thrown out there by people who are trying to kill a project once they realize that they have no other real arguments. Just keep waiting and waiting and delaying. Ren will always find some reason why we should wait just one more year. It’s a very obvious and old playbook. Don’t fall for it.

    And I wouldn’t worry about boring people. At least neither of us is spouting the thinly veiled racism of WSW…

  • History Buff

    Wow, you won’t run out of rage anytime soon: Save the View (appeal), BBP (what’s good about it?), the new BH library (not in my backyard…literally).

    Have to assume you haven’t checked the NYC DOB lately. The church is already working with the BPL/developers and plans have been filed for the temporary library.

  • Nat

    On page 25 of the report the cash balance does recover. Albeit in 2064 (or something, I need a microscope), but that’s the difference in amount and timing between the assumptions. In the age of spreadsheets a little here, a little there makes a world of difference. I believe the ongoing Park income is largely based on the projected future real estate tax rates and retail rental rates. The park takes a very conservative approach to these projections (i.e. no increase in taxes, based on not so luxury proximal developments). Some may think Ren takes a more radical approach. I imagine someone lending the money, would probably take a more realistic, objective analysis. That is all I am hoping to pursue.

    I think it becomes difficult to take a reasonable approach when everyone has stuck their necks out so far. On the flip side of delaying tactics, there are also panic tactics (the piers may fall in the water next year!, developers will walk away in frustration! the real estate market will crash!) and public insinuations (which I wont repeat).

    Why do you trust the Park’s numbers to be correct?

    Why would the park not go to Wall Street for their assessment?

  • RJG

    When I was working in the private sector (for a $200 million per year publicly held manufacturer) my treasurer would have fired me on the spot if I told him $80 million was peanuts.

  • RJG

    The BBP projects about $1.225 billion in total operating expenses between 2015 and 2065. Saving $80 million would shave expenses by 6.5%. That’s significant.

  • Park Guy

    Noone is going to lend money with no hope for any repayment (even interest payments) for 50 years. This is not a grey area where you need a wall street banker to weigh in. It’s obvious. The chart you refer to shows the park barely recovering several years after we will both be dead. That’s effectively never. Also that chart doesn’t factor in borrowing costs. Once you do that, the recovery time will be even further delayed.

    You are again repreating Ren’s talking points which are untrue. The Parks projections do include growth it taxes based on proximate projects which are very much luxury projects. Ren’s who strategy seems to be to present a veneer of a reasonable argument to provide reasonable people like you with a straw to grasp at. But if you start really looking at his arguments, there is no substance there.

    I have never heard the park use the scare tactics, you refer to. Never heard them say the piers will fall down tomorrow. It is true true that if you do nothing, the piers will fall down EVENTUALLY. Noone can say exactly when. However, the longer you delay, the more risk you are taking.

    I believe the parks arguments becuase i think taking a conservative view is completely appropriate. Some folks are acting like the worst thing that could happen here is that the park makes more money than it needs. WRONG. The worse thing that could happen is the park doesn’t make enough money, and this beautiful park that the city has invested hundreds of millions of dollars in becomes a dangerous scary broken down place. I am willing to have have building at pier 6, which was always th deal anyway, in order to avoid that.

  • judifrancis

    There is no prohibition to issuing a bond for extraordinary capital expenses (which the park suddenly manufactured once they realized they were awash with cash – by moving up the schedule to fix piers). Bonds are how capital projects are funded – see Queens Libraries for recent example. But the real answer is that there are sufficient funds from the current development to take care of the pilings from the current income from housing already built.