Senator Liz Krueger Proposes Compromise Solution for Battery Park City Funds
New York- New York- State Senator Liz Krueger laid out a compromise proposal today to address the use of money held by the Battery Park City (BPC) Joint Purpose Fund. Senator Krueger’s proposal calls for the fund—which will have an estimated $400 million by the end of this fiscal year—to be divided between three parties, with $200 million going to the New York State general fund, $100 million going to the New York City general fund, and $100 million going to the City’s affordable housing trust fund. Furthermore, the proposal would create a new Memorandum of Understanding (MOU) which would stipulate that all further deposits into the BPC Joint Purpose Fund (estimated to be $50 million annually) be dedicated to affordable housing without any need for sign-off from the Governor, Comptroller, or Mayor.
“I believe this proposal is a win-win solution for all involved,” said Senator Krueger. “It is both responsible by giving the State and City desperately needed funds, while at the same time finally making good on the previously broken promises to dedicate Battery Park City money for affordable housing.”
The Battery Park City Authority was created in 1968 to oversee the construction and management of a new 13 building community in lower Manhattan. The development was originally built with the intention of addressing New York City’s lack of affordable housing, but the Authority determined its initial plan to build affordable low- and middle-income units was financially unfeasible. Instead the BPCA decided to build luxury apartments on its property and established a $600 million affordable housing fund with the money it collected from payments in lieu of taxes from its residential and commercial property owners. Unfortunately, most of the fund had been diverted to other purposes for many years until the City recommitted itself to using Battery Park City surplus money for affordable housing programs in 2005. However, the money is now in danger of being diverted from affordable housing again.
In the deficit reduction plan recently submitted by the Governor, one of the proposals to close the deficit called for a sweep of $300 million from the BPC Joint Purpose Fund. However, there are two major problems with the Governor’s proposal. First, the Governor does not have the authority to sweep these funds. Any decision on how these funds are to be used requires a joint agreement between the Governor, the Mayor, and the New York City Comptroller. Second, these funds were intended to be used for the construction of affordable housing, not the New York State general fund.
“I am optimistic that this compromise plan will be amenable to all the parties who need to sign off,” said Senator Krueger. “If we cannot get the three parties to agree then we risk having this money frozen indefinitely. Such a situation severely hampers the City’s affordable housing goals as it desperately needs its share of the money now. Furthermore, investing money in affordable housing is a great economic development tool during difficult economic times. Land is cheaper to buy, construction creates new well-paying jobs, and the affordable housing creates long-term sustainability for the City.”
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