Brooklyn Bridge Park financial projections challenged again by opponent Richmond
Wall Streeter says bureaucrats rigged report to justify over-building, benefiting de Blasio
A group fighting the city’s plan to build two residential towers – one 29 stories and one 15 stories — at Pier 6 in Brooklyn Bridge Park says a financial report commissioned by the park is full of misleading information and should be withdrawn.
In a letter sent to members of the board of the Brooklyn Bridge Park Corporation (BBPC) on Nov. 3, People for Green Space Foundation (PFGSF) says the report by consultant Barbara Denham was slanted in order to justify the controversial high-rise development.
Denham is an economist who once worked for the city’s Economic Development Corp. An analysis of the report’s figures and claims was carried out in large part by Henry “Ren” Richmond, a director of PFGSF. Richmond is a financial analyst in a group that manages billions of dollars of investments on behalf of institutional clients.
The Denham report was released to Crain’s by the park board shortly before a July 30 hearing hosted by the Empire State Development Corp. (ESD).
A spokesperson for BBPC on Friday said the park is reviewing Richmond’s claims, adding that the board had the “utmost faith in Ms. Denham’s capabilities as an economic analyst.” (Full statement below.) On Friday, 11 community organizations responded to BBPC’s statement. (Their response is also below.)
Richmond says the financial report uses “bizarrely incorrect tax data” to validate BBPC’s revenue assumptions, and “inappropriate” comparisons.
For example, the group says that the market value of a residential building adjacent to the Pier 6 site, One Brooklyn Bridge Park (360 Furman St.), is stated in the report as $35.6 million. PFGSF says this is “less than half of the verifiably correct value.”
The Denham report also claims that One Brooklyn Bridge Park generates just over $4 per square foot, when in reality it generates $7.78 per square foot, according to Department of Finance data.
The PFGSF analysis also claims that Denham’s Empire Stores rent estimates are outdated and square footage is understated, as the project has been “vastly enlarged.”
Among other alleged flaws, PFGSF says that Denham chose a “misleading selection of comparables,” which dramatically understates residential tax revenue. Denham’s “sample of high-end residential buildings” includes a tiny 1907 structure at 25 Joralemon St., with a market value of only $1.5 million, for example.
PFGSF says that comparable developments should instead have included Brooklyn condos built since 2000 with an assessed value of over $20 million, such as 236 Livingston St. in Downtown Brooklyn and 74 DeKalb Ave. in Fort Greene, along with One Brooklyn Bridge Park.
BBPC: Pier 6 project ‘essential’
The BBPC board maintains that the park needs the Pier 6 project to remain financially self-sufficient.
Park President Regina Myer said at the July 30 hearing that Pier 6 “is absolutely essential to the park,” and that the development sites were designed to minimize the project’s footprint.
The park is mandated to be self-supporting, but the city had originally promised that only development absolutely financially necessary would be built.
However, the park’s board wants ESD to modify a project plan it approved in 2006 to allow the park to build the project — and its affordable housing — regardless of financial need. ESD is considering this modification.
The proposed 339-unit development has been opposed by all of the area’s elected officials, 19 community organizations and many residents of Brooklyn Heights and neighboring communities. Concerns have also been raised by the City Comptroller, Public Advocate, Community Board 2 and Community Board 6.
Opponents say that the development will only add to already overcrowded schools, streets and infrastructure, and is not financially necessary.
But the plan, which includes 117 units of affordable housing, has been strongly backed by Mayor Bill de Blasio and his appointee to the BBPC board, Deputy Mayor Alicia Glen.
At the July 30 hearing, Glen said, “Let’s not turn this into something that it’s not. It’s about affordable housing. In the past six months alone more than 100,000 people applied for affordable housing in this community board.”
She also maintained that the revenue from the Pier 6 development was necessary for the park to remain self-sufficient, citing other waterfront infrastructure projects that ran short of cash after suffering damage, including Pier 54 at the Chelsea Piers, and Pier 40, part of the Hudson River Park in Manhattan.
Statement from BBPC:
“We received this latest letter from PFGSF on Tuesday evening and are reviewing the claims made therein. However, we have the utmost faith in Ms. Denham’s capabilities as an economic analyst. Since serving as a regional economist at EDC 20 years ago, Ms. Denham has served as the chief economist at Colliers ABR and Eastern Consolidated, and the Research Director at Jones Lang LaSalle. She has published widely on the topic of economic forecasting and is currently an economist at REIS, a leading provider of real estate economic analysis to the leading financial institutions in the country. In addition, Ms. Denham was retained by BBP on the recommendation of the Citizens Budget Commission, one of the most trusted, objective, and knowledgeable civic organizations dealing with financial matters in New York City. Moreover, Mr Richmond, in addition to being a financial analyst, is also the owner of a multimillion dollar 12th floor condominium unit at One Brooklyn Bridge Park whose views would be blocked by the proposed Pier 6 building, and can hardly claim to provide any unbiased analysis on this topic.”
Brooklyn community organizations respond to BBPC statement:
On behalf of the Brooklyn Heights Association and the eleven community associations organized under the Brooklyn Bridge Park Defense Fund* we are disappointed that the Brooklyn Bridge Park corporation would ignore opportunities to engage in the facts uncovered in Ren Richmond’s letter of November 3rd. Instead of providing the community with the financial model for park funding, the corporation has made a personal attack on Mr. Richmond. Our united communities and the park’s own Community Advisory Committee have serious concerns with the Denham report. We believe it is grossly flawed. We seek an open discussion of this report and want the underlying data in the financial model reviewed, with full transparency.
* Atlantic Ave Betterment Association, Carroll Gardens Neighborhood Association, Cobble Hill Association, DUMBO Neighborhood Alliance, Ft. Greene Association, Park Slope Neighbors, Vinegar Hill Association, Willowtown Association, Project for Pubic Spaces, NYC Park Advocates and the Sierra Club