Madelyn Wils, President and CEO of the Hudson River Park Trust, is a brilliant entrepreneur. She sets her goals and lays out alternative combined creative strategies to achieve them. If I ever needed an accomplished advocate, I would choose her. She could sell me a house I already owned. She knows how to use the laws and those who make them.
Case in point. She could not persuade Assembly Members Deborah Glick and Richard Gottfried to let her build high-rise residences in Hudson River Park where they would be storm-tossed in the Hudson River, a designated estuary. She did the next best thing. She persuaded them under amendments to the Hudson River Park Act, passed literally at the closing bell of the legislature at midnight, June 21, to let her sell the rights to build over the river to owners of land outside and alongside the five mile long park.
Sell rights? What does that mean? I understand that people own and sell land and buildings, but what are rights and why do they have value? To understand this, you have to be as old as I am and remember the bottom of the pages of a long extinct newspaper called the Daily Mirror which sold for 2 cents a copy. At the bottom of some of the pages were printed dollar bills, play money, for kids like me to cut out and pretend to spend. Air rights are like that – created out of thin air; however, these air rights have real value on the market.
Air rights are created by the City Council and the Mayor under the Zoning Law and administered by the City Planning Commission. They were used by the Penn Central Corporation to save the Grand Central Terminal, a landmark structure. The concept was pioneered by a city planner and a preservationist, Norman Marcus and Dorothy Minor, both with legal backgrounds. They also form the mainstay of the proposed East Midtown District where Mayor Bloomberg hopes to outdo Dubai.
You can imagine what the edge of Central Park would look like if the Parks Department could sell air rights over the park – a 100-story wall with 60 ft wide notches for streets – but normally parks do not have those rights to sell. Hudson River Park is different. In the last century, it comprised a shipping pier and was zoned for manufacturing and commercial. It still is. The Planning Department never rezoned it as parkland. Furthermore, it not only zoned the land west of West Street for development, but also the river itself, 800 ft to the pier head line. One wonders why they didn’t zone the entire river to New Jersey. That would be a windfall (or should I say “waterfall”) for developers! The law places no limit on those portions of the park, which includes water to the pier head line, from which rights can be sold. Under current zoning, there are potentially over 40 million sq ft of floor area for sale with a value of $12 billion at least $300/sq ft for prime waterfront locations if a market could be found to build enormous buildings along the five mile stretch of West Street.
Here is where Madelyn Wils comes in. She is skillful, intelligent, and persistent. Not only does she direct the Hudson River Park Trust, but has displayed great management skills over one of the most beautiful waterfront parks in the world. She persuaded the legislators to remove the rights from the property owners, New York City and New York State, who everyone knows are both strapped for park funding, and give them to the Trust to sell to developers with property across the highway from the park. Why could the City not be trusted to sell the air rights to fund the improvements in the park?
Along comes the NID (Neighborhood Improvement District) to bring in even more revenue. The NID is a district proposed by the FOHRP (Friends of Hudson River Park). FOHRP was established many years ago under the chairmanship of Al Butzel to act as a watchdog over the park. Some say it has become the Trust’s lap dog. It does want to help the park survive financially, if not extravagantly. The NID would place a tax surcharge on all property within its boundary, roughly the same properties to which Ms. Wils hopes to sell air rights. Every square foot she sells will produce additional annual income to the park. Not a bad investment! The only loser is the City which has effectively given up ownership of its own park, but is obliged under the new law to assume all liability for future storm damage, not only for the many existing buildings and structures but also those planned for Piers 26, 54, 76, and 97 including a floating heliport with a two story building. No worries about tidal surge here. Let the City pick up the bills and the Trust, the income. That is the manager I would hire.
The park is a beautiful environment in which to experience the city, the waterfront and the sky, to promenade, sit, look, see people and perhaps board a boat. That is its great achievement. All else is secondary.
