“Follow the money” is the immortal, if apocryphal, phrase uttered by Deep Throat, offering the key to unlocking the mysteries of Watergate. Understanding cities requires similar forensics. Urban morphology maps the flow of cash with concrete precision and the New York skyline is a literal bar graph of investment and return. The manufacture of real estate (what some quaintly refer to as “architecture”) is our leading industry and the art of the deal the epicenter of our creativity. Money not only talks, it designs
and “planning” in most American cities is almost entirely devoted to refining the process of spatial arbitrage.
There’s a project underway on the Manhattan waterfront that spins this tangled web with a remarkable combination of clarity and opacity, exposing the freakish calculated collusion of intentions and outcomes that shapes the city. The story begins in September 1985, when the death knell was sounded for Westway, a lunatic land manufacturing scheme to shove the Manhattan shoreline four hundred feet into the Hudson all the way from 40th
Street to the Battery. Beneath this massive fill was to have been embedded an Interstate—the most expensive per mile ever constructed—replacing the terminally rusted West Side Highway. Planners were looking for
the most extravagant scheme possible and were strongly supported by public officials (including Rockefeller, Koch, Cuomo the Elder, and Moynihan), the development community, and the construction unions.
Visionary rhetoric and seductive greensward images notwithstanding, it was all about the money: The Feds would have picked up 90% of the $2.1 billion ($10 billion in today’s dollars) price-tag and the resulting 220 acres of new real estate—100 for a park and the rest a free-fire development zone—and would have been the most spectacular piece of physical fiscalization in the city’s history. But if the magnitude was singularly impressive, the impetus was widely shared. Cities all over the country had been committing urban suicide—ramming highways through their yielding tissues (often of color)—to get their hands on that government cash and New York—cresting in the Robert Moses era—had been an absolute champ.
Westway was opposed by a coalition of environmentalists, mass transit advocates, community activists, and progressive pols but was finally killed by a Federal court ruling that its sponsors had failed to consider the landfill’s potentially adverse impact on the Hudson’s striped bass population. This narrowly-decided opinion nevertheless proved a turning point in the urban highway wars: In its aftermath, Bella Abzug–sponsored legislation allowed a trade-in of highway money for mass transit (to the great benefit of our subways, busses, and pedestrians) and other cities—from San Francisco to Seattle—began tearing down the waterfront highways, a continuing trend.
Today, instead of Westway, we have a surface “boulevard” that—if billions cheaper, tree-lined, and lit by ornamental luminaires—is still too much of a surrender of this precious edge to traffic. Along the road’s waterside, though, runs the lovely, if incomplete, Hudson River Park which—while far from big enough to meet demand— offers great pleasures as it struggles towards durability and completion. Instrumentally, the park both reproduces and inverts the Westway principle. Westway proposed to use public funds simultaneously for public benefit (a highway and a park) and
to create opportunities for the accumulation of private wealth, which would, in theory, yield further public return in the form of income from land sales and real estate taxes. The current park, on the other hand, although built substantially with public funds for public use, is not exactly a public work, inasmuch as it is obliged to finance its own future by directly attracting private capital. This parlous paradigm of the “public-private partnership” has, in our Republican age, become the default strategy for “public” development and has deeply embedded the culture of the trade-off (literal pay to play in the case of the park) in our civic life.
The genius of progressive taxation for “general revenue” is that, in theory, it embodies that equitable proposition, “from each according to his ability, to each according to his need.” If the U.S. system is wildly distorted on both collection and distribution sides, ability and need are nominally meant to be determined democratically. Unfortunately, when democracy lurches towards plutocracy, the distortions on both ends grow to the inevitable detriment of public needs. As the system becomes more and more regressive, the question of public benefit is increasingly situated in the elective territory of philanthropy—optional altruism—rather than collective responsibility. A tax code designed to favor private fortunes (with the corollary commonweal reliant on trickle-down) begs the question of their public disposition: ceding this to individual interest, itself answerable to charity, guilt, avarice, deductibilty, and political power in varying degrees, depending on whether the fortune belongs to the Koch Brothers, Bill Gates, Andrew Carnegie, sundry Rockefellers and Fords, or the Clinton Foundation. The demonization of shared—“redistributed”—wealth is a trope as abiding as it is rank: one reason that Bernie was ultimately unsuccessful is our generalized hostility to high-tax. Scandinavian-style “welfare states” (every citizen a welfare king or queen!) and the sapping canard of the individual initiative-killing effects of “hand-outs” from big nanny.
Even in “liberal” New York, we’ve long since internalized Trumpism as policy: Everything’s a deal. “Return” on public investment must not simply be quantifiable (gross municipal happiness anyone?) but literally monetized.
This calculus undergirds the arcane systems of swaps and bonuses that radically territorialize and delimit our practices of urban planning and improvement, with the result that we now insist that virtually every public enterprise (save, of course, warfare—although Trump’s neo-imperialist, spoils-to-the-victor, proposals might bring this too under the umbrella of self-finance) demonstrably pay for itself.
Thus, instead of public construction of housing we have inclusionary zoning, instead of public education we have charter schools and rising college tuition, and instead of public healthcare we have the confusions and insufficiencies of a rapacious marketplace. And, littering New York, we have those oxymoronic POPS—“privately owned public spaces”—a sad archipelago of plazas and lobbies (Trump Tower’s among them!), purchased in a currency of lost light, air, revenue, equity, and pride.
Any trade begs the question of who gets the better of it. Are the view-blocking luxury apartments now built in its midst too high a price for the excellent Brooklyn Bridge Park? The conundrum lies less in the answer than the question, with its predicate in a fragmented, discontinuous, idea of public space. Its further, and all too legible, implication is that the location and quality of such spaces depend on their realization in places where they can graft values from already successful
environments. Precisely because the investment is both self-serving and easily recouped in a rising gyre of adjoining real estate prices, private money pours into Central Park, those condos rise in Brooklyn, the High-Line flourishes, and Barry Diller wants to build a Fantasy Island on piles in the Hudson—just beyond the window his office—in the “undeveloped” waters between the piers of the park.
Like Brooklyn Bridge Park, Hudson River Park is administered by a trust, a legal arrangement in which someone’s property—in this case New York City’s and New York State’s—is managed by someone else. The Hudson River Park Trust was created by the State Legislature in 1998—during the Pataki administration—and is nominally controlled by a thirteen-member board of directors, five appointed by the Governor, five by the Mayor, and three by the Manhattan Borough President. The Trust’s board, however, is backed by another larger and perhaps more important one: the self-perpetuating “Friends of Hudson River Park,” charged with fund-raising for on-going construction and maintenance and largely comprised of investment bankers and real estate types (as well as—for cultural leavening—Martha Stewart and David Chang, of Momofuku fame). Both boards are dominated by Madelyn Wils, the Trust’s President and CEO since 2011, a shrewd and well-connected operative with long executive service on the city’s Economic Development Corporation, the Lower Manhattan Development Corporation, and—as Chairman—Community Board One, in lower Manhattan.
It has fallen to Wils to deal with fact that the park, legally obliged by the terms of the trust to self-finance, is stone-broke. Her duties thus include not simply supervising the operation of the park but, most crucially, fulfilling the Trust’s mandate to “ensure the park’s future financial self-sufficiency by developing the remaining commercial nodes.” These “nodes” include both the actively commercial piers under its control (the Chelsea Piers sports complex, the New York Waterway ferry terminal, the Intrepid Air and Space Museum, etc.) as well as the unrealized potential of other undeveloped piers (or deals for new ones like Diller’s island). Its largest such asset is the fifteen-acre Pier 40, former terminus of the Holland America line, which occupies a charismatic spot between Greenwich Village and Tribeca, west of burgeoning “Hudson Square,” an area recently rebranded and rezoned to incite development and supersede its industrial past by attracting “creative” and tech uses, luxury housing, and a froth of Portland-sur-Hudson amenities to go with. Pier 40 currently accounts for approximately 30% of the Trust’s revenue—mainly from parking nearly 2,000 cars (a truly idiotic use for one the city’s most wonderful sites)—but is crumbling and urgently needs extensive rehabilitation. It’s best known by locals for holding several large—and much beloved—playing fields in an area that is one of the most underserved with recreational space in the city. Cash must somehow be milked from this alpha cow.
Thus, on her arrival, Wils and Board Chair Diana Taylor took control of the then moribund “friends,” loading it with wealthy donors. This move was not without turbulence, including the 2012 purge of uber-developer Douglas Durst (who did not go quietly), nominally over a fight about the Trust’s intention to build housing on Pier 40, which Durst thought might be more profitably exploited by something more commercial. Indeed, over the years, a variety of contentious schemes for the pier have been mooted, including construction of offices, housing, shopping malls, theme parks, a permanent home for Cirque du Soleil, more parking, the expansion of NYU, and other not-exactly-park-like uses.
However, this being New York, the pier also offers possible monetization through the sale of its very lack
of development: by cashing in on its air rights. The main impediment to this has been that New York’s air rights regulations restrict their transfer to another site within
a single block or zoning lot, technically obliging the pier’s rights to be fully exploited on the pier itself. Re-enter the State Legislature. In 2013, the Hudson River Park Act was amended to permit the transfer of the park’s air rights (in toto
around 1.5 million square feet) to “receiving sites” within a zone a block deep on the other side
of West Street, the park’s landside boundary, running from 59th
Street to Canal Street. This amendment was crucial both in establishing the park’s most potentially lucrative revenue stream and in enabling a particular deal already in the works between the Trust, the city, the state, and a consortium of developers (one of whom—Michael Novogratz—who subsequently and profitably sold his share—just happened to be the chair
of the park’s “friends”): the transfer of 200,000 square feet of development rights to a site directly across West Street, now occupied by the ginormous, three-block-long, St. John’s Terminal Building, erstwhile end-point of the High Line (and, interestingly enough, with Bloomberg LC its major tenant).
Throughout this multi-party negotiation, the key intermediary was the PR firm of James Capalino. Capalino is a long-time donor, fundraiser, bundler, and pal to Bill de Blasio who, in 2015, somehow made more money ($12.9 million) than any other lobbyist representing clients to the city. Capalino’s much in the news these days, implicated as the fixer in the lifting, by the city, of a deed restriction on the (now former) Rivington House AIDS Nursing Home on the Lower East Side, allowing it to be converted to upmarket condos. Capalino represented the building’s owner—VillageCare, a non-profit—which sold the building to the Allure Group, a for-profit nursing home company, which, with the restriction lifted, flipped the building to the Slate Property Group, realizing (per The Wall Street Journal
), a profit of a cool $72 million. Capalino now works for the Chinese developer Dalian Wanda, itself a partner of China Vanke, part of the consortium that bought Rivington. At the end of August, de Blasio—although claiming to know nothing about the deed deal approved by his administration—cut his erstwhile fundraiser loose: “I have not been in touch with Mr. Capalino….I do not have contact with him anymore.”
According to a timeline
put together by the excellent Danielle Tcholakian of DNAinfo
, Capalino e-mailed First Deputy Mayor Anthony Shorris in late January 2014 (just after the mayor’s inauguration) with a copy to Carl Weisbrod, who was himself appointed Commissioner of City Planning a week later!
The e-mail: “Tony, for the past twelve months, my firm has been working with Madelyn Wils on a proposal to secure a $100 million contribution by our client, Atlas Capital, to the Hudson River Park Trust to fund the cost of rehabilitation/stabilizing Pier 40 for continued recreational use. We are in discussions to have the residential project over St. John’s Terminal become an ESD (Empire State Development) project through a State sponsored general project plan.”
In fact, the Trust, the ESD, and the developer had already
inked a secret Memorandum of Understanding in December of 2013 that fixed the scale of the project and the $100 million price for the enabling air rights. According
, this had been signed-off on during the waning days of the Bloomberg administration by Robert Steel, the Deputy Mayor for Economic Development. Bloomberg (as well as Wils and Weisbrod) apparently also supported the use of the “general project plan” to be overseen by the ESD, a process which the developer was eagerly seeking (via copious lobbying by Capolino’s firm) as a means of circumventing the city’s more rigorous Uniform Land Use Review Process (ULURP), an end-run the developer believed could save many years (and bucks) in obtaining approvals.
Negotiations between the state, city, Trust, and developer—lubricated by the continuing ministrations of Capalino—were proceeding briskly in camera
until May of 2015 when the secret MOU became public. Consternation from Manhattan Borough President Gale Brewer (“Shocked is an understatement for how we all felt”), Assembly Member Deborah Glick (a leader in the fight against building housing on the pier itself but also an original sponsor of the Albany transfer legislation, believing it the only hope for saving the pier), the media, and the public, resulted in an about-face by the de Blasio administration—with the immediate agreement of the developer (who clearly knew who his friends were)—to renounce the MOU and the General Project Plan route and to go through ULURP.
ULURP—now nearing its conclusion—runs a statutory 200 days from the submission of the developer’s plans and Draft Environmental Impact Statement (DEIS). During ULURP, these are reviewed, successively, by the affected Community Board (CB2), the Borough President, the City Planning Commission (which is obliged to hold a public hearing and did so on August 26), by the City Council (which may
hold a public hearing), and finally by the Mayor. The Community Board and the Borough President are authorized to make recommendations (including rejection) but these are entirely non-binding. The Planning Commission, the Council, and the Mayor have actual power but, in the case of this project, the Planning Commissioner, the ambitious local Council Member, Corey Johnson (who now has great power over the endgame), and the Mayor have long since come out in strong support of the deal and it’s unclear whether push-back from CB2, Borough President Brewer, a few members of the Planning Commission, and many in the community (including the energetic Greenwich Village Society for Historic Preservation which has been trying hard to use the deal to leverage its own struggle to preserve a large swathe of Greenwich Village just north of the site) will materially affect the final outcome. Indeed, their concerns had little impact on the Planning Commission which, on October 17, voted to approve the project without substantial modification.
Since the proposed development departs radically from the site’s existing zoning, the Department of City Planning (a government agency that reports to the politically appointed City Planning Commission) prepared a revised zoning map to define a “Hudson River Park Special District” that could receive—and advantageously use—the transfer by greatly increasing allowable bulk, changing designated uses, permitting additional parking, and building in exceptions to the “contextual” strictures that govern the scale and character of construction nearby, including those revised to create the Hudson Square Special District a block away. The parameters of the new receiving site, to the administration’s credit, would also bring the project under the Mandatory Inclusionary Zoning regime, which obliges the developer to provide a meaningful percentage of affordable housing in the mix but which also further ups the site’s permissible bulk. The end-point of ULURP is approval, rejection, or modification of these zoning changes, which—if passed—will provide the legal space for the deal to be consummated.
And the project? Its design is a particularly ripe variation on the “form follows finance” mentality at the core of the way New York City plans and is larded with bluff (a big box store, vast amounts of parking, extremely tall towers, and a truly grotesque “as of right” alternative scheme (a standard-issue developer threat that could be built without special approvals should this deal come a cropper). The plans have been skillfully reverse-engineered from the Trust’s primary imperative to realize the $100 million from the deal and are driven by its better-get-it-done-now recognition that public resistance to any further transfers into CB2 will be strenuously opposed, ditto possible transfers to other communities elsewhere along the waterfront. Indeed, recent push-back to the plan from CB2 and the Borough President has specifically demanded that transfers from the park to the adjacent neighborhood be strictly capped at 200,000 feet.
Architecturally, the plan (albeit the work of good architects) is a bad one, both in its general outlines and in its particulars. Most strikingly wrong is the almost complete disconnection of the special district—on which would rise by far the largest project ever
constructed in CB2—from its surroundings (including Pier 40 itself) and its total failure to anticipate and conduce to future changes, including the much-wished restoration of the street grid obliterated by the St. John’s Building
and by the equally long, single-story, UPS facility running parallel in the blocks behind it. The vigorous development taking place on all sides (as well as future advances in logistics technology) will eventually create pressures on UPS (and nearby FEDEX) and provision should surely be made to restore the streets now erased, and to think about—to plan
for—what will happen on these newly created blocks, including parks and schools.
The plan placed on the table was clearly an opening gambit, stuffed with calculatedly negative capability in the form of too much stuff but also with a series of artful deficits that might open avenues for more positive demonstrations of cooperation. For example, the public space component is, by the developer’s own arithmetic, so sparse that the project will produce a net decrease
in local public space per capita. The DEIS is also deeply suspect and blithely concludes that this humongous erection will have virtually no seriously adverse impacts on traffic, solar access, public services, and other critical infrastructure. Equally irresponsible is the developer’s long-standing resistance to including a school to serve the kids among the thousands of new residents. Finally, the plan is non-committal about its internal distribution of the mandatory affordable dwellings (as well as the actual degree of their affordability), although it appears they’re going to be primarily small units for seniors and concentrated in a single building, facing the UPS garage (the presentation package—full of street level perspectives rendered to obscure the mammoth bulk of the buildings looming out of frame—disingenuously depicts a rare apartment at the back of the building with a water view through a wee gap in the surrounding condos).
All of these issues might be addressed in a revised proposal and both CB2 and Borough President Brewer have demanded a number of adjustments. But there’s a sad, deckchairs on the Titanic, quality to even the strongest of these, which, in the end, fall for the plan’s artful misdirection. The salient, undeniable, fact is that the project is vastly
over-scaled. The tallest of its towers—at 420 feet—is three times the height of the surrounding built texture
and certain to have a deeply deleterious and distorting impact on the neighborhood that it and its companions will overwhelm. The complex will also irrevocably alter the profile and rhythm of the Hudson riverfront as a whole, a contemptuous interruption in a continuous—and historic—low to mid-rise skyline that now stretches uninterrupted from Chelsea to Tribeca. An authentically “contextual” solution would simply extend the scale of the existing street wall, which tops out at around fifteen stories. Urbanistically speaking, this is clearly the right way to go.
In the report issued by her office, Brewer tellingly—if somewhat wistfully—observes that, given the city’s reliance on private development for the direct financing of public facilities, “the developer has a private interest that is paramount to any public interest.” Yes, and? Alas, no public body or official seems willing to walk away from the specific public return on this expression of private interests: the $100 million for Pier 40 repairs, the “up to” 476 units of affordable housing, the now rejected curb on further bulk transfers into CB2’s backyard, and support for land-marking the nearby South Village, a decision that rests with another, nominally independent, agency. As the negotiations enter their end-game, a variety of predictable gambits are being played. Westbrook Partners, the majority stakeholder (Atlas still holds a minority share), has just let it be known that it’s “rethinking” the project because of a weakening in the residential market and might be forced to revert to a purely commercial, as-of-right, scheme. More, Crain’s reports
that Westbrook is actively looking for an equity partner for the site, which both suggestively reinforces the threat to abandon residential use entirely and almost certainly reveals the real plan beneath the plan: to get approvals for the maximum project and then flip the whole thing and walk away with the cash.
The public-private daisy chain keeps yielding moments of delirious, if nauseating, irony. The City Planning Commission (Chairman, Carl Weisbrod) held a hearing on September 19, during which a few minutes were devoted to listening to the responses of the City Planning Department (Director, Carl Weisbrod) to questions raised about the project at their August meeting. A visibly nervous planner from the Department was obliged to present her answers to a body presided over by her boss, the man who had been most instrumental in structuring the deal now under review! And, while we’re still in ironic mode, there’s another I find especially hard to overlook: The projected cost of Barry Diller’s little entertainment island has now reached $200 million. The design (by Thomas Heatherwick) is tasty enough but the money would surely be better spent (and the island’s entertainment program easily accommodated without displacing the ball fields) were it to be used on Pier 40—100 million for repairs, 100 for theaters and trees. And, Diller would have an irresistible counter to Doug Durst, who has been biliously bank-rolling lawsuits to thwart Barry’s plans, out of some truly pathetic billionaire pique.
I make this suggestion seriously as one of a number of ways to manage and coordinate both direct investment in the park and the sale and use its air rights. Another would be to expand the Hudson River Park Special District to encompass Hudson Square (and the UPS site which will surely be transformed at some point) and to radically disaggregate the 200,000 square feet into much smaller increments that could be added as a series of bonuses to the on-going wave on construction in the area. Yet another would simply be to gerrymander a 1.5 million square foot skyscraper (or add just a few additional stories to several already proposed) into the thicket of towers under construction in Hudson Yards further uptown, an area already given over to large-scale building and one that has a huge underbuilt perimeter (including the Javits Center) into which even these enormous numbers could easily be made to disappear.
Our representatives should steel themselves and fight for the big picture, for something much better than this too-many-eggs in one basket contrivance. The project is far, far, too big for the bearing capacity and character of its site and nibbling at the edges of the design—reducing parking, slightly shrinking a tower, 86-ing the big box that everyone knows is only there to disappear, redistributing bulk a bit, getting a few more affordable units, adding a wee plaza at grade—will make little real difference. If public money cannot be made available for maintaining the public park (or housing the poor), the question of the fungibility of air rights—if that is to be the Trust’s primary asset—must be regulated with much greater invention and subtlety: Having crossed the West Street Rubicon, there’s no reason this conjured property “right” cannot be more broadly and appropriately distributed. Indeed, the question of the creation and deployment of these rights lies at the very core of the way in which we define public space. It’s our air, after all!
The complete failure of the DCP, the Trust, or any other public (or quasi-public) body to formulate a rigorous, sustainable, and beautiful plan for this part of town is simply dereliction. Not simply have they acquiesced in a completely barse-ackwards mode of defining and financing genuine and general public interests and slighted a truly collective—and expansive—vision of community needs, benefits, rights and desires, their “spot” planning mentality totally ignores a truly mammoth elephant the stalks the room: the inevitability of sea level rise that will almost certainly inundate this low-lying place, piers, special districts, underground parking, twee little shops, and all. While our public servants blithely order another cup of bouillon, an iceberg looms on the horizon. Time to change course!
It’s not too late! While the City Planning Commission has voted to approve the plan almost entirely as originally presented, the Council (which tends to defer to the local member) and the Mayor can still intervene, although de Blasio in unlikely to oppose a creature he was so instrumental in stitching together. The Commission altered the scheme only in cosmetic or predictable ways: the Big Box is now gone as are the “public” bridges over Houston Street. The developer has also agreed to provide 10,000 square feet of subterranean recreational space that would be publicly “available” on unspecified terms. A little more open space is to be squeezed in at grade. However, no modification of the project footprint was demanded to reconnect the street grid, no guarantees were offered about a cap on transfers into CB2, no reduction was made in height, and nothing was said about the larger context of the project, including the form and use of Pier 40 or the character of the extended neighborhood.
As part of the deal, however, the South Village Historic District has been placed on the Landmarks Commission’s agenda at its regular November 1 meeting for a vote to “calendar” it, launching a process of hearings, deliberations, and possible designation that can last as long as two years. It’s likely to be fewer as the professional staff at Landmarks is expected to offer a strongly favorable recommendation to the Commissioners. Although the precise manner by which the exquisite timing came about remains murky, the agreement to hear the case was surely the result of strong—and long—advocacy by the Greenwich Village Historic Society (GVSHP), CB2, Councilperson Johnson (who now holds a great many cards), and others, and Andrew Berman, the energetic Director of GVSHP (with Johnson’s apparent support) has threatened to fight to derail the project should the South Village landmarking fail to go forward. Courage to them both! And to those who are opposed to dumping any further FAR into CB2 and to all who advocate for more public space, affordable housing, and rational planning.
Yet, whatever the outcome of the landmarking gambit, the fundamental contradiction at the heart of both project and process looms huge, both literally and conceptually. I’ve met virtually nobody with a non-financial stake in the new building who supports it as a piece of architecture or planning, simply as the formal resultant of a negotiation for something else
. This is the heart of the deal, the inevitability that there will be winners and losers. The developer wants to build a gigantic project and has surely calculated its return with precision, using a knowable metric of profit. The city—in all its roots and branches—is obliged to a far more notional heuristic for determining the cost of our benefit. Would it be a good deal if it only produced the hundred million for the pier? The hundred million plus the affordable housing? Pile repair and housing plus the South Village Historic District? Should the developer be offered another 100,000 square feet to build a school? To decrease the building footprint by going higher still?
That we have tipped so far to inducement rather than obligation as a planning strategy is a tragic, indeed Trumpian, marker of the decay of the commons. This collusive failure of imagination, responsibility, and democracy is staggering, if all too typical. Time to demand a vision that grows from our shared “right to the city”, planning that looks beyond a contracting, bottom-line, approach to the possible and sees our architecture not simply as an outcome but an aspiration.
Michael Sorkin is the President of Terreform, the Principal of the Michael Sorkin Studio, Distinguished Professor of Architecture and Director of the Graduate Program in Urban Design at CCNY.
A planning and architectural study of this site has been prepared by Terreform and may be downloaded from its website. Comments are greatly welcome.