The city quietly slashed the main source of revenue for Brooklyn Bridge Park, revealing only this week that a luxury condo that funds the park’s maintenance budget is now paying $1 million less — leaving a gaping hole in revenue at a time when planners are struggling to raise even more money for upkeep.
One Brooklyn Bridge Park, a high-rise within the park’s footprint, is supposed to pay $3 million annually, but the Department of Finance recently granted the condo’s developer a reduction in those payments.
The massive loss of revenue comes at a time when city officials are pushing for more housing to fund the park despite public opposition — and it raises the question of whether new high-rises will actually cover future expenses.
“This shows yet again that we need to come together to agree on a new, innovative funding stream that allows the park to reach its potential,” said State Sen. Daniel Squadron (D–Brooklyn Heights), a longtime opponent of condos in the park.
Park officials first became aware of the secret payment reduction in October, after the park’s 2011 budget had already been approved, said Brooklyn Bridge Park spokeswoman Ellen Ryan.
But the public — and even elected officials — first became aware of the cut on Tuesday, after it was mentioned at a board of directors meeting.
One Brooklyn Bridge Park, a former warehouse at 360 Furman St. that was converted into a condo and included inside the park footprint as a financing scheme, had brought in $1.8 million in fees and $1.25 million in ground rent to the park.
But the slashed the tenants’ fees to $800,000 this year after the condo’s developer, Robert A. Levine, requested an exemption, according to a Department of Finance spokesman.
Years ago, Levine got a steep tax break to build the high-rise within the park. At the time, he fought opposition to the sweetheart dealing, saying that the more he earned from his luxury tenants, the more he would put back into the park’s coffers.
Levine’s company did not return a call on Tuesday.
The million-dollar reduction raises doubts on how much future luxury developers will actually contribute to the park maintenance budget — even as the city is moving forward with housing as the primary funding method.
Last week, the city released an analysis of alternative revenue streams for the park’s eventual $16-million maintenance budget. The report was rubber-stamped by the park’s Committee on Alternatives to Housing on Tuesday, though it remains to be seen which revenue proposals will be implemented.
Bay Area Economics, the consultant hired by the city, studied nine revenue streams, including sponsorships, vendor fees and a park improvement district, which, like a business improvement district, would levy a small tax on property owners near the park.
All told, the consultant found only $7 million in revenue sources — a figure that suggests that housing is inevitable.
Some locals and elected officials called the study a sham, saying the city refused to consider property tax revenues from existing buildings. Specifically, the properties owned by the Watchtower Bible and Tract Society that could soon come on the market.
Squadron and a host of other officials urged the city to consider the so-called “Watchtower properties” — nearly 30 buildings that currently are not on the tax roles under federal laws that exempt religious groups from paying their fair share. He believes that those buildings could generate millions in property tax once they change hands.
The study could only disappoint Squadron and other opponents, given that the consultant was bound by two conditions: a) the 2002 agreement between the city and state that mandated that the $350-million park generate its own revenue for annual upkeep, and b) a requirement that the consultant not consider any revenue, such as property taxes, that otherwise would go into the city’s general fund.
But a contingent of residents and city and state politicians contend that Watchtower properties do actually fit within the study’s guidelines.
Councilman Steve Levin (D–Brooklyn Heights) said that Watchtower proposal isn’t an outrageous idea — it’s what was already done with One Brooklyn Bridge Park, ironically, a former Watchtower warehouse.
Once the building was rezoned and resold, the condo developer paid fees called “payments in lieu of taxes,” which are designated to the park, not the city’s cashbox.
“Just because the report excludes the Watchtower properties doesn’t mean the issue’s out of the way,” Levin said. “We need viable and responsible ways to fund this park, and I don’t quite understand why this suggestion continues to be rejected.”