The Battery Park City Authority will put $500 million of future moneys towards affordable housing in the city, the city and state announced, and I have long wondered about this so wanted to add it as a post. One of my city planning mentors back in Chelsea in the early 2000s — RIP Ed Kirkland — always said that BPCA was obliged to turn over any excess revenue to affordable housing, and used to complain that they never paid up.

Just to warn you I am way above my pay grade here, and BPC spokesman Nick Sbordone had to hold my hand through the whole process, but how it actually works is the governor, mayor and NYC comptroller work together to determine where a portion of BPCA’s excess revenue is directed. Under an updated agreement announced last month, $500 million of this revenue will now go to support affordable housing across the five boroughs – including $5 million to fund affordability at the new 5 World Trade Center.

The prior agreement, dating back to 2010, directed $461 million of BPCA’s excess revenue to support affordable housing, and another $400 million to the city and state ($200M each) to help plug budget gaps in the wake of the 2008 recession.

The excess funds are sent to the “joint purpose fund” each year — and while that number varies, right now it’s about $40 million a year. (The vast majority of excess funds, around 80 percent, actually go to the city’s general fund.) The last agreement between the governor, mayor and comptroller ended in 2021, and about $140 million had accumulated in the joint purpose fund. So that will now go to affordable housing along with another $360 million in the coming years.

There are some illustrations below that may or may not help…

The Background: As Battery Park City was being developed, the BPCA entered into long-term ground leases with developers; BPCA collects revenue from these ground sub-leases in the form of ground rent, payments in lieu of taxes (PILOT), and other fees. These revenues first fund BPCA’s operating expenses and debt service, with the majority of remaining funds, known as “excess revenues,” annually distributed to the city. The share associated with PILOT (approximately 80 percent of BPCA’s excess revenues) flows to the New York City General Fund and the share associated with ground rent is allocated to a Joint Purpose Fund. This is the funding that is meant to be dedicated to affordable housing outside Battery Park City’s 92 acres.