Pier 40 ‘secret M.O.U.’ at long last is released, but heavily redacted

BY LINCOLN ANDERSON  |  For a while, five months at least, it ranked among the great mysteries. Right up there with: How did they build Stonehenge? Where did they bury Jimmy Hoffa? And…why does that kooky guy dance around in a diaper in Union Square anyway?

The mystery is now over — well, make that…sort of. 

Last week, in response to a Freedom of Information Law (FOIL) request by The Villager, the Empire State Development Corporation e-mailed the newspaper a copy of the so-called “secret M.O.U.” that no one had seen — the memorandum of understanding between the Cuomo administration, the Hudson River Park Trust and Atlas Capital Group. The conditional agreement outlines a proposed scheme under which the Trust would sell unused development rights from Pier 40 to Atlas for its redevelopment of the St. John’s Center site on the other side of the West Side Highway.

Word of the existence of the “secret M.O.U.” was first uttered in May by an E.S.D.C. official who blurted it out at meeting at Borough President Gale Brewer’s office. Local politicians, having heard growing rumblings that the governor was supporting a General Project Plan involving Pier 40 and the St. John’s Center, had called the meeting, seeking more information. Galling the politicians, just the day before, a New York Times article had indicated that Cuomo was indeed potentially considering a G.P.P.

Whereas a G.P.P. would place the project firmly under the state’s control, local elected officials stressed they wanted to see a city-led Uniform Land Use Review Procedure (ULURP) for any project involving Pier 40 and the St. John’s Center. A ULURP includes more public review than a G.P.P., they argued, plus, importantly, would empower the City Council to modify the plan with binding changes.

Page 2 from the agreement between E.S.D.C., the Hudson River Park Trust and Atlas Capital Group, showing large sections redacted by E.S.D.C. before the agency sent it to The Villager.

Page 2 from the agreement between E.S.D.C., the Hudson River Park Trust and Atlas Capital Group, showing large sections redacted by E.S.D.C. before the agency sent it to The Villager.

Following local politicians’ united uproar, E.S.D.C. backed off, saying the process would now be what it called an “expedited ULURP.”

Long eyed as a development site, the St. John’s Center property stretches from Clarkson St. southward about 850 feet, ranging from about 220 to 280 feet wide, bounded by West and Washington Sts. The property is currently covered by a three-block-long, four-story-high commercial building, dating from the 1930s, when it was constructed as a terminal for the High Line.

The agreed-upon price for Atlas to buy Pier 40 unused development rights was a very large sum, reportedly $100 million — though the actual figure, like much else, was redacted from the document provided to The Villager. 

Indeed, the agreement released in response to the newspaper’s FOIL has large sections blacked-out, leaving key questions about the M.O.U. unanswered.

The agreement is about 10 pages long. Labeled “Exhibit C,” an attached “city support letter,” from former Deputy Mayor Robert Steel to Kenneth Adams, president of E.S.D.C., is dated Dec. 24, 2013, from the last days of Mayor Mike Bloomberg’s third and final term. However, the M.O.U.’s first sentence states the M.O.U. itself was “dated this __ day of February 2014,” meaning under Mayor Bill de Blasio’s administration, during the transition phase at City Hall. No dates are penciled in anywhere on the document, though, to indicate when the signatures were actually made.

As The Villager previously reported, the discussions leading up to the agreement’s crafting were ongoing under Bloomberg. As for Adams, he has led E.S.D.C. — the state’s development agency — since 2011, and so has spanned Bloomberg to de Blasio.

The M.O.U. is signed by Adams; Madelyn Wils, president of the Hudson River Park Trust; and Andrew Cohen and Jeffrey Goldberger, Atlas’s founding partners.

Atlas is referred to in the document as “SJ Owner LLC, Delaware limited liability company, having an office at c/o Atlas Capital Group, 505 Fifth Ave.” 

(In fact, Atlas is a part owner of the St. John’s Center, along with Westbrook Partners and Fortress Investment Group. Mike Novogratz, a principal in Fortress, was a former director of the Trust and is currently chairperson of Friends of Hudson River Park, the Trust’s private fundraising wing.)

The M.O.U. states on its first page, “Pier 40 needs structural improvement that would require substantial funding that neither H.R.P.T., E.S.D.C. nor the State of New York can currently provide.”

Under the proposed plan, those “substantial funding” needs of the 14-acre W. Houston St. pier were to have been met through the development rights sale, which would be permissible under last year’s park legislation, which was passed — again, secretively, without public notice or review — in the final hours of the state legislative session.

The M.O.U. states upfront that the St. John’s development project would be subject to environmental analyses under the State Environmental Quality Review Act (SEQRA), including an environmental impact statement (E.I.S.) — plus would be done under a G.P.P. led by E.S.D.C.

These studies and the G.P.P. “would facilitate a mixed-use development site,” the M.O.U. states, referring to a mix of residential units, plus likely commercial space and possibly at least one hotel.

The project was to be built with an “override” of certain provisions of the city’s Zoning Resolution, according to the document.

However, a section subheaded “Pier 40 Funding” — which would confirm whether the agreed-to sale price was, in fact, $100 million — is redacted.

Under the park legislation passed in Albany last year, any revenue from the sale of Pier 40’s development rights is mandated to be funneled back into the crumbling Lower West Side pier for its repair and maintenance.

Another section of the M.O.U., subheaded “Proposed Development Plan for the Development Site,” was also heavily redacted by E.S.D.C., so that specifics about exactly what would be built on the St. John’s site are not viewable. 

“The Proposed Development Plan would set out the proposed uses for the Development Site and include a set of design guidelines for the Proposed Project, mutually satisfactory to E.S.D.C. and S.J.,” the M.O.U. states. “These guidelines would be developed prior to the completion of the draft E.I.S. and adoption of the draft G.P.P., through discussions among the Parties and with elected officials and through the community consultation process outlined below. The Proposed Project Documents would include a requirement for a satisfactory labor peace agreement with respect to any hotel agreement.”

More than half a page is blacked out in a section subheaded “Zoning Overrides.” These proposed zoning overrides, the M.O.U. says, would be “subject to changes resulting from, among other things, consultation among the Parties, with the City, Department of City Planning, elected officials and with stakeholders through the community consultation process, the draft E.I.S. public hearing and comment process…the G.P.P. process, including…a public hearing and subsequent period for comment on the adopted G.P.P., further revision of the G.P.P., if necessary, in response to public comments…and approval review by P.A.C.B. (Public Authorities Control Board).”

The P.A.C.B. killed Bloomberg’s West Side stadium plan in 2005.

Subheaded “Community Engagement,” a full page of the M.O.U. is taken up describing a multistep “community consultation process” that S.J. (Atlas), in signing the document, agreed to engage in.

Under this process, Atlas would first request that Community Board 2 create “a designated task force” to participate in meetings regarding the project’s design “and other related issues.”

Beginning with the “issuance of a notice of scoping for an E.I.S.,” this task force would then begin meetings with Atlas.

These meetings would continue for a 60-day period “and would occur as frequently as reasonably practical under the circumstances.”

Also within this period, the task force would make a recommendation on the proposed St. John’s project at a C.B. 2 full-board meeting, and C.B. 2 “would have the opportunity to vote and issue a recommendation to E.S.D.C.”

Submitted as support for the M.O.U. is former Deputy Mayor Steel’s Dec. 13, 2013, letter to E.S.D.C.’s Adams. Steel writes that the Trust — of which he was at the time board vice chairperson — had determined that the park needs “in excess of $50 million to achieve a state of good repair.”

Steel further writes that the Trust’s “mission” is for the park to be “financially self-sustaining on an operating basis,” but that this is being seriously hampered by the decaying condition of Pier 40 — which is a designated revenue-generating, commercial node for the 5-mile-long waterfront park.

Steel goes on to indicate that the city would support a G.P.P., if done right.

“We understand that you are considering a General Project Plan with regard to Pier 40 and the St. John’s site — a program intended to allow for additional density on the St. John’s site,” Steel writes, “combined with investments in Pier 40’s infrastructure and contributions to the Trust’s annual operating budget. If a G.P.P. were planned consistent with City interests and concerns, and developed with outreach to and input from affected stakeholders, this would complement our current work on the development-rights transfer program; it could also provide, potentially, a faster path to generating new private investment for immediately needed Pier 40 repairs.”

Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, has been a leading critic of the park development-rights legislation. The Villager shared the redacted M.O.U. with him and asked him for comment.

“It’s deeply disturbing to read the document and to see how far along this was,” he replied after having given it a read-through. “It’s certainly a good thing that this is not happening, but of course there still is the possibility of many other bad things happening with Pier 40 and the St. John’s site.”

The parts of the M.O.U. that were redacted “were significant and what most people would be most interested in knowing,” he noted. 

(According to one source, though, it’s standard operating procedure for E.S.D.C. to redact “all business terms.” The source explained, “The explanation or excuse for that is that people will not do business with them if they release anything that could be proprietary.”)

As for a ULURP versus a G.P.P., and the community review process described in the M.O.U., Berman said, “We always knew that a G.P.P. would include some sort of public review. But there wouldn’t be any public role in the decision-making process. That was what was so frightening — the G.P.P. would ultimately be decided by the ‘Three Men in a Room’ in Albany,” he said, referring to the governor, Assembly Speaker Sheldon Silver and the leadership of the state Senate. 

Regarding the “zoning override” mentioned in the document, Berman said, “Presumably, if they were overriding the zoning, it would be to do something that is larger than what existing zoning allows — not smaller. What’s allowed now is huge.”

Assemblymember Deborah Glick said she accepts at face value that the St. John’s proposed G.P.P. plan is dead because former Deputy Mayor Fran Reiter, the governor’s local point person on the project, told Glick and her fellow local politicians this at one of the borough president’s task force meetings on the issue.

As for the M.O.U. having been created without local politicians’ knowledge, both Glick and Assemblymember Richard Gottfried previously told The Villager that Reiter told them sometimes some things need to be done quietly — or nothing would ever get done.

Glick stressed that she had no knowledge of the M.O.U.’s existence prior to when it erupted in May.

“As far as knowing that there was an M.O.U. being written, being signed — absolutely not,” she said. “The first that anyone knew there was an M.O.U. was at the meeting at the Borough President’s Office. An E.S.D.C. representative said, ‘Well, we signed an M.O.U. in December.’ There was a collective, ‘What?’ 

Tobi Bergman is chairperson of C.B. 2’s Land Use Committee and one of three candidates running for board chairperson in next month’s election. He is also a member of the Pier 40 Champions group, which has worked hard to find a way to safeguard the pier and ensure it continues as a youth sports mecca into the future. In late 2012, the Champions even drafted a design plan for two luxury high-rise towers to be located in the park, just east of the pier, whose revenue would finance Pier 40’s repair. But their plan lacked political support, particularly from Glick, in whose district the pier is located.

The Villager forwarded the redacted M.O.U. to Bergman and asked him for comment. He said, in one regard, the M.O.U. on the now-defunct St. John’s G.P.P. proposal did offer a positive.

“I know people were concerned about a G.P.P. and getting the state involved. And I’m not entitled to an opinion because I have no experience with G.P.P.’s,” he said. “But the community process promised in this document actually appears to exceed anything we usually get in a ULURP.”

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