The 'NID': Opinions from Both Sides

A Neighorhood Improvement District is proposed as a means of supporting Hudson River Park through property assessments. The Trib welcomes opinions on the NID, which will be posted online and, as space allows, included in our March issue. Write to: editor@tribecatrib.com.

“The proposition that the Park has raised property values may be true for river/park view properties, but is less likely in the eastern half of the NID zone.”

To the Editor:

The proposal to fund Hudson River Park's operating budget with a business improvement district (cunningly renamed as a Neighborhood Improvement District for this purpose) is fatally flawed, primarily because it is unfair and undemocratic, and therefore must be rejected.

The BID funding structure is based entirely on taxpayer entities. The assignment of one vote per tax lot makes sense in a BID where the vast majority of the buildings are commercial, but would create a wildly undemocratic situation in the case of the Hudson River Park Neighborhood Improvement District (HRP-NID) because of the high concentration of residential buildings in the zone. If the NID is implemented, co-op shareholders will be disenfranchised relative to condominium owners and residential tenants will be completely disenfranchised. For example, take three identical 20-unit multifamily buildings, one of which is a condo, one a co-op and the last a rental building where all of the units have been decontrolled under the NYC rent control laws and the owner has the ability to pass on the NID assessment. Each of the condo owners pays the assessment and in return get one vote, each of the co-op owners pay their share of the assessment on their building and together share a single vote, and the rental tenants pay their share of the assessment on their building but do not get a vote because the building's vote belongs to their landlord.

In addition to being undemocratic, the NID assessment is unfair because it is a Park user fee applied only to residents of the NID zone. One can easily imagine the shock, outrage and disgust that would have met a proposal to institute an admission or user fee to fund HRP. But that's exactly what the NID assessment is, except instead of applying to all visitors, it only applies to the owners and residents of the NID zone. In fact, the promotional materials distributed by the Friends of Hudson River Park to garner support from residents in the zone essentially says as much, "Without your support, the Park you use as your gym, playground, concert venue and haven to escape could disappear."

The proposition that the Park has raised property values may be true for river/park view properties, but is less likely in the eastern half of the NID zone. For example, it is much more likely that the West Broadway and Hudson Street corridors from Chambers Street to Duane Street increased in value due to the renovation of Duane Park, the greening of Bogardus Triangle, the creation of Bogardus Plaza and the transition of the Cosmopolitan Hotel from an SRO to a tourist hotel.

Further, using prior increases in property value to argue that property owners have a duty to "give back" a portion of their gains in the form of the NID assessment sounds great, but is really fairly unsupportable. The most obvious counter-example is owners who have recently moved into the zone and thus paid the increased price for their home. They have no gains to "give back" but will still be charged the assessment.  In addition, increases in property values are also already partially given back by owners via increases in their New York City property taxes and at the time of sale to both New York City and State via the Real Property Transfer Tax, the Real Estate Transfer Tax and "Mansion" Tax, and income taxes levied on capital gains. How can it be fair to add an additional charge to nearby property owners to support a Park used by tens of thousands of other New Yorkers and visitors each year?

Lastly, the deceptively cozy name. How can a neighborhood span parts of three Community Boards, three City Council Districts, two State Senate Districts and three State Assembly Districts and still be considered a neighborhood? How can an undemocratically elected  executive board fairly balance the needs and priorities of both residents and commercial property owners over such a large area? It can't, and shouldn't. Another, more fair method of funding HRP's operating costs must be devised.

Nicole Vianna

16 Hudson Street

To the Editor:

It all sounds so innocent. We have a wonderful park that runs along the Hud­son River and we want to make sure it stays that way. A nice-sounding group called Friends of Hudson River Park sends you a letter saying that if you and your neighbors agree to pay a modest fee to support a new Neighborhood Im­provement District (NID), all will be well. “Without your support,“ says this letter, “the Park you use as your gym, playground, concert venue and haven to escape could disappear.” Yikes, sign me up!

However, this simple-sounding proposal for a Hudson River Park NID raises serious issues of fairness and, if approved, would result in bad public policy.

Unfortunately, public knowledge in Lower Manhattan about this proposal has been very limited. The initial round of public meetings that took place in the late fall were not advertised in community newspapers and the Tribeca meeting had only about 20 residents in attendance.The Friends group is now seeking wider participation by expanding its mailing list and advertising the public forums to be held this month.

Here’s the background. In 1998, the New York State legislature passed a law creating the five-mile-long, 550-acre Hudson River Park and placing it in a trust. The city and state each agreed to contribute about $169 million toward the park’s creation but mandated that in the future the park must be self-sustaining. 

In other words, the largest open space project in Manhattan since the construction of Central Park was created with no assured means of funding its annual expenses. This is the crux of the problem that the NID was designed to help solve.

To date, efforts to create commercial development at certain approved areas within the park have failed to generate enough revenue to pay for the park’s ongoing costs. Private fundraising has also been inadequate to the task at hand. As a result, the Trust and its fundraising sidekick, the Friends, have decided that the way out of this conundrum is to levy a small tax on everyone who owns property several blocks east of the park. (Most commercial landowners would be able to pass along the tax to their tenants; residential owners cannot.) The NID, as currently proposed, would run from Murray Street at the southern end to 59th Street at the northern tip. Once implemented, this assessment would generate about $10 million a year.

The proposed NID is a departure from the 67 Business Improvement Districts (BIDs) in the city because those are, as their name implies, generally created by businesses to support commercial zones. If this NID is approved, it will be the first time that ongoing maintenance of one of the city’s major public parks will depend significantly on a tax paid for by nearby residents. As parks increasingly become seen as a luxury, not an essential public good, expect to see more efforts to shift the burden onto residential taxpayers.

While there has been little public discussion of the proposed Hudson River Park NID, there are many thorny issues that deserve consideration. The first is one of fairness. The owner of a 2,000-square-foot apartment, for instance, would pay about $150 a year. A business with the same square footage would pay at twice that rate, or $300. While some consider these sums modest, there’s an important principle at stake. According to the Friends’ literature, the park receives 17 million visits a year; 400,000 people use its recreational facilities. Is it reasonable to single out 8,000 tax-lot owners and require them to pay for an amenity that is enjoyed by a far wider circle of visitors? It does not help that the lines of the NID seem somewhat arbitrary: in some areas, the NID extends four blocks east of the park, in others, two or three.

The Friends organization insists that property owners in the NID should pay because they benefit the most from the park’s existence. It cites a 2008 economic study produced by the Regional Plan Association that concluded the park has added about 20% to the value of properties within two blocks of the park. What the Friends’ literature does not include from the RPA study is this statement: “While the figures given above are impressive, and while the 20% value added correlates closely with other studies of how parks add value, it is probable that other factors besides the Park itself contributed to the value increases.”

The Friends’ argument also ignores the fact that increases in property values are already captured in higher property taxes paid to the city by these landowners, amounting to double taxation on this particular group. (Full disclosure: the author is one of these property owners.)

Ironically, if the RPA were to repeat its study in today’s post-Sandy world, the results might be completely different. Recent stories in publications like The New York Times indicate that real estate prices are falling and potential buyers are shunning areas near the river that are now perceived to be far riskier investments. The result could be a double whammy: Property owners near the river could see the value of their real estate investments decline at the same time as they are assessed an additional tax that their neighbors, farther away from the river, escape.

By casting such a wide net over so many disparate neighborhoods and keeping the assessment capped at what many deem a nominal rate, the Friends group may be betting there will be little unified opposition. At a recent meeting of the Friends’ advisory council, heads of community boards representing Lower Man­hattan, the Village and Chelsea, indicated that their organizations have either en­dorsed the proposal or expect to shortly. The proposal then goes before the City Planning Commission and the City Council. The Friends hope to get their approval in the spring, with the first tax revenues flowing to the Trust by 2014.

Before approving the plan, the City Council must be satisfied that at least half the property owners affected by the NID are in favor. That is why it’s so critical that neighbors attend the final round of public meetings. (The Tribeca meeting is Feb. 12 at 6:30 p.m. at the Downtown Community Center, 120 Warren St.) At these meetings, residents should encourage Friends to redouble its efforts to identify other revenue streams. If they don’t like what they hear, residents should contact their City Council representative or consider starting their own online petition.

Sarah Bartlett

Sarah Bartlett is a longtime Tribeca resident and director of the Urban Re­porting program at the CUNY Graduate School of Journalism.