A realtor realizes site rent can replace taxes
|March 28, 2009||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
A realtor realizes site rent can replace taxes
The Bigger Apple
At this site you read news you may have missed from both the alternative and mainstream press. This big-picture 2009 op-ed is from the New York Times, Mar 13. The contributor is the chairman of a real estate investment trust and was the chairman of the Battery Park City Authority from 1968 to 1978.
by Charles J. Urstadt
Theyre not making any new land goes the adage, but Manhattan has added a few thousand acres since the Dutch explorers, 400 years ago. Today, by filling in the waters around Manhattan, we could jumpstart our economy and provide opportunities for commerce, residence, and recreation. And we could do it all without using any government subsidies or bailout money.
Here are five ways to make Manhattan grow:
- 1. Develop Governors Island, 172 acres lying at Manhattans doorstep, for commercial use. The city and state have spent millions turning it into a tourist attraction, but because of budget cuts, the island may not have enough money to reopen this summer.
It was a mistake to make Governors Island just a day-trip destination when it should be developed with apartments, retail spaces, and schools. The success of Battery Park City shows that this can be done without government money: building owners would pay ground rent in lieu of taxes to an Authority which would deduct operating costs and pay the profits to the city.
Not easily accessible, Governors Island was selected as a gun emplacement to guard New York Harbor. But access could be achieved by an aerial tram like the one to Roosevelt Island, by running a ramp off the Brooklyn-Battery Tunnel, or by simply increasing ferry service — which brought New Yorkers to Staten Island that by all rights should be part of New Jersey.
2. Tear down Pier A, the crumbling wooden relic in Battery Park City at the entrance to New York Harbor. Except for the clock tower erected after World War I as a memorial to fallen soldiers, it has no historical significance. Better to replace the pier with a five-acre quay similar to the Circular Quay in Sydney. A quay could serve as a central ferry terminal, which would pay for itself with fees paid by the ferryboat operators. And the historical clock tower could be incorporated into the new quay.
3. In 1969, city planners decided to interrupt the continuous bulkhead and waterside promenade with South Cove of Battery Park City. But thanks to tidal currents and prevailing winds, the cove has never been more than a garbage accumulator. By extending the existing bulkhead, eliminating the cove and filling it with sand — as we did to create the rest of Battery Park City — we would have the base for an iconic building that, teamed with the Statue of Liberty, could serve as a welcoming beacon.
Ground rents would more than pay for the bulkhead and landfill with no expenditure of taxpayer money — and a monumental building on that new land could also produce a substantial profit for the city. Keeping in mind the value of similar waterfront land and office use, I estimate that one million square feet on those two new acres could yield at least $25 million a year.
4. Develop 50 more acres of landfill in the Hudson River on the West Side, north of Battery Park City. The cost of the landfill, as well as of the public park and recreational spaces that would be part of the new area, could be reimbursed from ground rents collected from private developers. The building of a new bulkhead would use large rocks; between those rocks fish could lay eggs. Fish actually prefer the nooks and crannies of the rock formations to murky silt.
5. Fill in the Harlem River, which separates Manhattan and the Bronx. The Harlem River did not become navigable until 1895, when the Army Corps of Engineers dredged a shipping canal that provided direct passage for vessels from the East River to the Hudson. Nineteen years later, the creek that had served as the northern boundary of Manhattan was filled in, leaving the neighborhood of Marble Hill, still technically part of Manhattan, physically attached to the Bronx. So if we were to drain the Harlem River, we would actually restore the land to its original state.
To not reclaim land would leave Manhattan behind Dubai, Hong Kong, Tokyo, and the Netherlands. The challenge did not deter the Dutch from their initial landfill efforts, nor did it deter those who built Battery Park City. The opportunity offers itself again today.
JJS: Filling in river ways might not be the best idea — perhaps canals as in Venice would be better. Further, Manhattan has many acres of land lying fallow — even just blocks away from the most expensive intersection on the planet — that could be put to much better use, including pocket parks. However, geonomics — recovering location value for the public purse in lieu of taxing buildings, business, and earnings — is always the best idea.
Jeffery J. Smith runs the Forum on Geonomics.
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