Liu Puts Pier A Funding on Hold in Dispute with City Over Project Completion
A three-floor dining, events and visitor center is planned for Pier A, which now has cost overruns. Rendering: Green Light Architecture
Who should come up with the millions of dollars still needed to reconstruct Pier A?
The onus is on the city, not the Battery Park City Authority, according to City Comptroller John Liu, who has rejected the BPCA’s initial request to approve part of a bond sale that would secure the remaining $5 million needed to build Pier A’s outdoor plaza.
The pier, at the northwest edge of Battery Park, has been undergoing a years-long restoration and transformation into a major dining destination that is due to open next spring. Since 2008, the authority has been charged with overseeing the work.
Excess money raised by the authority through ground rents is mandated by law to support subsidized housing around the city. Liu, who along with the mayor must authorize the BPCA’s capital expenditures and borrowing, objects to the new financing being spent on the pier instead.
But the Economic Development Corp. (EDC), the pier’s owner, which has already contributed $30 million toward its restoration, is balking at footing the bill, according to Liu. He spelled out his concerns in a recent letter to BPCA Chairman and Chief Executive Officer Dennis Mehiel.
At the very least, Liu said, the EDC should split the $5 million for the
plaza with the BPCA—particularly since the pier’s lease states that the two agencies would “negotiate in good faith” to determine the funding needed for the plaza.
“The Pier A plaza funding request troubles me,” Liu wrote, “because the New York City Economic Development Corporation, BPCA’s partner in the Pier A redevelopment project, has refused to share in the plaza costs despite its historical responsibility for Pier A and its significant unrestricted fund balances.”
“After over a decade of Pier A delay and decay under EDC’s leadership,” the letter continued, “it is highly unfortunate that the EDC’s intransigence could cost the affordable housing community several million desperately needed dollars.”
Responding to Liu’s claims, an EDC official told the Trib that, as the pier is the BPCA’s project, the BPCA is responsible for funding the overruns.
In response to Liu’s concern about the $5 million, the BPCA removed the sum from its three-year capital budget proposal that was part of a more than $1 billion bond offering approved by the Public Authorities Control Board last month.
The $90 million in other capital funds addresses upgrades to Battery Park City’s aging infrastructure, including repairs to its seawall and electrical system, while the rest of the bond will refinance prior bond debt at a lower market rate.
The BPCA, the pier’s leaseholder, would have been willing to cover the remaining pier costs, Mehiel said at an Aug. 20 board of directors meeting. “The [EDC’s] position is that...if there’s a cost overrun, BPCA capital funds should be expended to complete the project,” he told the board members. “We’re not resistant to the idea, but the city comptroller is.”
Mehiel went on to say that the BPCA is “content” to comply with Liu’s and Bloomberg’s orders once a consensus is reached.
Robert Serpico, the authority’s chief financial officer and newly appointed interim president, said that, with rising interest rates, financing approval is needed soon.
“The time is critical, because the market has been moving against us,” he told the board. “So we could lose literally millions of dollars by delaying this offering.”
The new pier is supposed to open by next Memorial Day with three floors of restaurants, including an oyster bar, that will be run by the Poulakakos organization, along with a visitor center and an events space. It is unclear whether the $5 million in overruns will delay its opening. Peter Poulakakos, who owns several Lower Manhattan restaurants, did not return a call for comment.