Friday, May 18, 2012

Apartments, Hotel Proposed for Hudson River Park

The nonprofit trust managing the financially struggling Hudson River Park has identified a possible solution to its problems. Building 800 apartments and a 150-room hotel on crumbling Pier 40, the park's prime commercial asset, offers the best chance to raise the funds to keep the five-mile ribbon of park above water.
The study, commissioned by the trust, explored a range of options for Pier 40 with an eye toward identifying ones that would produce the most revenue with the least amount of traffic. It comes at a time when the park's bank account is quickly dwindling in the wake of two successive years of budget deficits.
Without an influx of cash, the park will exhaust its reserve fund in less than three years.

Meanwhile, roughly $118 million is needed just to make basic repairs to Pier 40, a nearly 15-acre expanse with ball fields and a 775,000-square-foot building that holds offices, sports facilities and a parking garage.

Last month, most of Pier 54, about 18 blocks north, had to shut down because it was in danger of collapsing. Pier 40 may need to close as soon as 2014 if there's no new cash infusion. Meanwhile, nearly a third of Hudson River Park has yet to be built—a task that would require another $200 million.

The situation has grown so dire that community groups may be more open to various moneymaking proposals. Community opposition squelched two earlier plans to develop Pier 40.

The financial dilemma has pushed the board of Friends of Hudson River Park, originally formed to advocate for more government money, to switch its focus to private fundraising. Six new deep-pocketed members joined last month.

Much of the park's fate will ultimately hinge on whether the trust can persuade state legislators to amend the 14-year-old law that created the park to ease development and lease restrictions so Pier 40 and other facilities would attract tenants that would generate more substantial revenue. Currently, building residences, hotels and offices is prohibited, and the lease term is capped at 30 years, which makes it unattractive to developers. The new study said the ideal lease term would be 87 years.

By tearing down the existing building on the pier and replacing it with a 150-room hotel, 800 apartments, parking facilities and retail shops, the property could generate from $9 million to $20 million a year. The complex would be 1.1 million square feet, roughly 45% larger than what is there now, but it would leave as much as 80% of the pier's space open. Currently, only 50% of the pier is open space.

The idea of constructing housing on the pier has already triggered concerns about the privatization of public land and whether the housing will be affordable. Yet some activists now say the idea merits discussion, noting apartments will add far less traffic than other alternatives, such as entertainment venues.