Update on Pier 6 Development
March 9, 2017
Last summer, the Brooklyn Heights Association filed a lawsuit against the Park attempting to halt the Pier 6 development, alleging, among other things, that the planned affordable housing is not allowed in the park, and that the park does not need the revenue to be generated from the market-rate component of the project. Several weeks ago, the BHA claimed that newly released tax valuations for the existing buildings at the edge of the park provide further support for their allegations. Unfortunately, the latest BHA submission follows the pattern of all previous attempts to dispute the need for the Pier 6 development: basic arithmetic errors, cherry-picked data, misleading conclusions and wrong assumptions.
The group’s letter centered around 2018 tentative values for BBP developments issued by the City’s Department of Finance (DOF), but provided specifics on only one of the five, claiming that the DOF valued this property (Pierhouse Condominium) at $230/sq.ft. In fact, according to the Department’s notice to the park, the valuation is $178/sq.ft. (nearly 30% lower)!
More concerning is the fact that the BHA was trying to use the high valuation to validate their argument that the park consistently underestimates value to support the need for Pier 6 development, and that the BHA consultant’s higher projections are more accurate and in line with DOF – all “proving” the park does not need any more money. However, this narrative falls apart when you look at DOF valuations for other park development parcels. Both the 1 John Street Condominium and the Empire Stores are valued by DOF at less than half the BHA consultant’s estimates. If the DOF numbers show anything, it is that many of the BHA consultant estimates were wildly aggressive, and that the DOF values are exceedingly hard to predict. This is why we are careful to be conservative with our projections so that we do not wind up with budget shortfalls.
Predicting is tricky business. Market values go up or down in unforeseeable ways, and the most that DOF’s values can provide in any given year is a snapshot of a highly variable real estate market at a particular time. That’s why the BBP financial model uses steady long-term averages to project the overall impact over 50 years. Because the model is based on average values, actual values will inevitably be higher than those predicted in some years and lower in others. Therefore, neither the 2018 values nor those from any other individual year could prove or disprove the accuracy of BBP’s 50-year financial model.
Our fiduciary approach to ensuring the funds to operate and maintain the park are there when needed is conservative of necessity. Others can argue for aggressive assumptions to avoid Pier 6 development, but we are accountable for the consequences.
In the end, this letter from the BHA joins a litany of reports claiming to show that funding generated by the Pier 6 development is not needed to maintain the park, only to crumble under even the slightest scrutiny. The time has come for the BHA to abandon its crusade against the Pier 6 development project. Aside from acknowledging the financial necessity of the project, it’s our hope that all of us in the community would be proud that the Pier 6 project will provide 100 units of permanently affordable housing without using any of the limited resources allocated to available subsidy programs – especially during the current housing affordability crisis and at a time when federal funding for housing programs is at grave risk.
Not long ago, Brooklyn Heights abutted a crumbling and abandoned waterfront. The Pier 6 development will provide the funds needed to repair the park’s piers and protect them from further deterioration. Without sufficient funds, the park’s maritime infrastructure could fall back into disrepair and sections of the Park would need to be closed. At BBP, we have pushed back against relentless efforts to stop the Pier 6 development chiefly because we have seen projects throughout the City fail due to lack of maintenance and overaggressive assumptions. We have an opportunity, right now, to ensure the long-term sustainability of this incredible public amenity.
The BHA has a venerable history of thoughtful, reasoned community advocacy. The group was an essential early advocate for the park, and many former members of the Board of Governors remain some of our strongest supporters. Now is the moment for the BHA to return to its roots as a respectable civic leader that similar organizations across the city can emulate. Working together, there is much we can accomplish. Let’s work to increase recreational and cultural opportunities in the park. Let’s advocate for the funding needed to complete its build-out. And let’s unite around the cause of responsibly budgeting for the park’s future so that many millions more can continue to enjoy it for generations to come.
For more information and a copy of the letter we recently sent to the court, click here.