Billionaire Developer Resigns To Pursue Alternate Pier 40 Plan
Douglas Durst is no stranger to controversy or success. His family (Douglas is the third generation to run his real estate development business) fought the redevelopment of Times Square, but eventually built its signature building, the Conde Nast Building at 4 Times Square, the most environmentally engineered building in the world. He invested $100 million in the World Trade Center and is directing its completion. He also was a strong critic of the tower at one point, calling it “the legacy of poor planning and decision-making by the Pataki administration.” Now, after 10 years of heading up Friends of Hudson River Park (note, I was on the Board of Friends with Douglas Durst for his first eight years as Chair) and investing millions of dollars into the efforts of that organization, he has taken aim at the Hudson River Park Trust and stepped down from the helm. Douglas Durst is not someone who just walks away from a fight and whoever is at “fault,” he will not be walking away from this one, or from Hudson River Park.
Hudson River Park is in trouble. That isn’t news. Madelyn Wils, the third President of the Hudson River Park Trust, has been announcing this loudly for all to hear. Hurricane Sandy didn’t help things, adding $10 million in damage, a significant portion of which won’t be paid for by FEMA. Anyone who has read WestView, The Villager or even The New York Times knows that the decaying situation at Pier 40 at West Houston Street is causing the Park to spend its meager capital reserves to shore things up and driving the park deep into the red. Since the State and the City don’t provide operating funds, functioning in the red is dangerous.
Pier 40 is at the center of the controversy, because over the next 15 years it needs between $50 million and $150 million worth of work if its hulking structure is to remain open, depending on whose study you believe. It generates between $5 and $6 million a year in revenues, mostly from parking, just under one-third of the Park’s budget. Its loss is unfathomable, but so is the cost of repairing it, even with band aids.
Various players have emerged. Hudson River Park Trust Chair Diana Taylor, the wealth-connected pipeline to the Mayor, says “close it down.” However, there are thousands of children and adults who engage in low or no cost sporting events who view her Marie Antoinette-like words as provocation, as do the 2,000 or so people who park their cars there in long-term parking. The sports groups, who have now banded together as Pier 40 Champions, support the construction of rental housing on the land facing the pier, the demolition of the pier’s building structure, and the expansion of the playing fields. They commissioned a study which points to this option, where the real estate developer repairs and rebuilds Pier 40, as the most financially feasible avenue to a strong economic future for the whole park.
Assembly Member Deborah Glick, joined by folks who opposed the creation of the Hudson River Park back in 1998, believes that residential development in the park is a sacrilege (without explaining why a parking garage or commercial office space isn’t). She has decried the Pier 40 Champions plan as a product of the “real estate developers” and sees the housing proposal as one last scheme by our billionaire Mayor to leave his pro-development footprint on the west side of Manhattan. She has been a player (a powerful player, since she can and has blocked legislation which would enable more creative projects at Pier 40) without a plan, and now she has one – the one put forward by one of the top real estate developers in New York City.
A few months ago, we all heard that the anti-housing force had a new ally – the Chair of Friends of Hudson River Park, Douglas Durst. Joined by Friend’s Secretary and former Pier 40 operator Ben Korman, Durst asserted that housing wouldn’t work. In November, they criticized the Trust’s projections for the cost of repairing Pier 40’s piles as being three times more than required. They said that the public process, the controversy and the construction would take too long, that the returns would be more meager than predicted and that the Park’s financial needs weren’t as large as that projected by its CFO (which would make a more modest project on Pier 40 feasible). It was odd, however, that this discussion was taking place in public, since Friends had recently morphed into a defacto wing of the Hudson River Park Trust after Diana Taylor threatened to create a competitor.
Permit me an historical digression. Friends of Hudson River Park was created in 1999, under the leadership of the legendary environmental lawyer Al Butzel (the lawyer who sank Westway, the highway that was to be built where the park now sits) as a membership organization which would advocate for the Park, especially with the State Legislature, challenge wrongdoing which prevented the full realization of the Park’s promise (Friends brought lawsuits which got the Sanitation Department off the Gansevoort Peninsula at 14th Street and which curtailed the heliport operations around 30th Street), and build a grassroots constituency. It hasn’t built much of a membership (especially compared to Friends of the High Line) and its fundraising accomplishments were largely limited to money contributed by Douglas Durst and his friends. Yet until 2011, it was a great watchdog and advocate for state funds, and its Board was mostly made up of Waterfront activists from Tribeca to Hells Kitchen. Madelyn Wils herself was a Board member when she was tapped to head the Hudson River Park Trust in 2011. With diminishing money, even for capital construction (the park is only 75% completed) coming from the State and the City, the Trust started thinking about raising private money. When Chairwoman Taylor started discussing creation of a fundraising arm of the Trust, Friends responded by proposing to drop its watchdog role and move closer to the Trust. That translated into kicking all the activists off the Board, adding wealthy benefactors who would pledge to raise money and ending its watchdog role. Durst told Board members that the watchdog role would continue, albeit from more of an insider position. Having curtailed its role as rabble-rouser, the Trust could be expected to share more insider information with the Friends Board and consult them more on the course of development. (I was one of the rabble-rousers then kicked off the Board).
While the strong presence of the Community Boards, and the Wils creation of a Hudson River Park Task Force to recommend legislative changes, has opened up the Park planning process, Friends clearly did not have the insider seat for which Douglas Durst had hoped. His critique of the sports league commissioned study quickly spread, and if Hurricane Sandy hadn’t sidelined things, representatives of the Durst Organization would have presented an alternate plan to the world on November 1, at a Community Board 2 hearing. At least those of us watching the players were confused, because the Trust executive leadership seemed to favor the housing plan and the Friends had pledged to stop being adversarial.
Word is, that at the December Board meeting of Friends, Douglas Durst raised this conflict to the Board – a Board he had largely created – and offered his resignation, since he planned to pursue his plan. He even pledged not to attempt any involvement as a developer. (He and Ben Korman did make a proposal to develop Pier 40 back in 2002-2003 which was met with approval by the sports leagues and Assembly member Glick, but not the Trust Board). Durst expected his resignation to be rejected. To his surprise it was unanimously accepted. Korman, a founding Board member, then tendered his resignation too. It was an abrupt break and a surprisingly disrespectful one for the man who had stewarded and shaped the organization for 10 years and who had contributed half the money which kept its operations afloat.
Will it mean the end of Friends of Hudson River Park? Apparently not. The group is on a path to raise $2million this year (compared to $5 million the year before). Is it the end of Douglas Durst’s involvement in Park planning? Clearly not. Does it open up the debate wider than before? Looks like it. Will it impede a resolution of the Park’s direction during the course of this year’s state legislative session? Probably not. What it will do is force everyone to tighten up their numbers, become clearer on their projections, and give the public (and the Trust Board) two clear alternatives to choose from. Furthermore, the debate can move from the “moral” debate over whether parking garages and commercial office space are more “appropriate” for the Park than rental apartments, to a discussion of what the actual financial needs of the Park are, what the financial plans of the Park ought to be, and what answer for Pier 40 will best contribute to the realization of that goal.
Arthur Schwartz is the Chair of the Hudson River Park Trust Advisory Council, a participant in the Hudson River Park Task Force, and was on the Board of Friends of Hudson River Park from 1999 until 2011.