Out and About: Battery Park City has many fans

Looking north from foot of Battery Park City's South End Avenue on a Sunday.

Looking north from Battery Park City’s South End Avenue on a Sunday.

There is nothing quite like Battery Park City, that enclave built on landfill at the southwest tip of Manhattan.

Among its characteristics is a large concentration of playgrounds, parks and promenades,\; astounding views of the Hudson River, the Statue of Liberty and New Jersey (for what that last perspective is worth); proximity to the Financial District; and its remove from the overwhelming bustle and hustle found elsewhere in New York City.

Like Roosevelt Island and some other areas on the fringes of Manhattan’s centers of energy and commerce, Battery Park City (which, of course, is practically on Wall Street, is not for everyone.  To me, Battery Park City feels remote.  To other folks, the pace could not be more agreeable.

Compared with other areas of the city, traffic is light enough in the neighborhood that it can feel safe to cross streets or walk down their middle without barely a glance.

Clustered along wide streets in the older and busier southern section and newer part of the neighborhood are 30 rental and condominium buildings on land leased by the Battery Park City Authority.  Many of the residential buildings boast gyms, swimming pools and other amenities.

Perhaps you can make out the Statue of Liberty from this $2.4 million condo.

Can you make out the Statue of Liberty from this $2.4 million condo?

In its early days, the area seemed deserted and devoid of amenities, but all that has changed.

Among 37 retail establishments are food markets, restaurants such Le Pain Quotidien as well as more upscale dining spots including Blue Smoke, a Banana Republic, Battery Park Veterinary Hospital and Bull & Bears Winery.  Still, it is just a sprinkling compared with other parts of the city.

The New York State Legislature created the Battery Park City Authority in 1968 with a charge to plan, create, co-ordinate and maintain a balanced mixed-use community on the 92-acre site, where the parks and gardens now cover 38 of the acres and include 20 pieces of public art.

Because of the land lease, the equivalent of real taxes is sky-high for the majority of the condominiums.  At an open house, I looked at a pleasant one-bedroom unit with no river view listed for $507,000.  Its taxes and common charges will run a new owner $2,050 a month.  An 833-sf unit in another building has a $589,000 asking price with monthly costs totaling $2,217.

The reason is that ground lease, and the rent for a group of 11 buildings would have been much higher had the Authority refused to relent somewhat in 2011.  Under the deal, the 11 buildings will pay $525 million in combined ground rents over the following 30 years, rather than the estimated $804 million scheduled in the previous agreement.  The Wall Street Journal explained the situation at the time of the accord:

What sets the Battery Park City condos apart from other properties is how the ground rents were scheduled to rise over time.  Most buildings with ground leases have long-term agreements spanning around 100 years with predictable price rises.

That wasn’t the case in Battery Park City.  Next year, the ground rents for the 11 buildings were scheduled to rise to a combined amount of $14.7 million a year, which is a 63% rise from their current rates.  In 2027, those rates were scheduled to be reset at 6% of appraised fair market value of the land underneath the buildings.

Since the 2027 rates would be based on an appraised valuation more than a dozen years from now, no one knew how much the property owners would have to pay.

As I understand it, common charges cover ground rent while a second tax is quoted as a PILOT, or Payment in Lieu of Tax. Sometimes, the two are broken out, and other times both levies are folded into the common charges.  No matter, the total always is impressively high.

View north from another apartment.

View north from another apartment.

Although the payments are deductible, the totals explain why sale prices are lower than for apartments elsewhere.  In Battery Park City, for example, a stunning three-bedroom, two-bath condo of 1,601 square feet with superlative views of the river and the Statue of Liberty would have an asking price uptown or to the east far greater than the current $2.38 million.  The monthly carrying cost is just shy of $4,000.

By way of comparison, a 1,725-sf condo with two bedrooms and two and a half baths on Columbus Avenue also has combined costs per month of nearly $4,000.  Its asking price: $3.795 million.

The tradeoffs obviously are acceptable to the populace in Battery Park City, and they can cite numerous reasons for their affection for the neighborhood.  Seeing the apartments and their views recently, I have come to understand their choice while not sharing their enthusiasm.

Below is a sample of some of the units I visited during their open houses one Sunday afternoon:

  • A 948-sf condo with two bedrooms and original marble-tiled baths in a 1987 doorman building that has 548 units, garage, swimming pool, roof deck, laundry on each floor and, for a fee, a gym.  The apartment has a decent pass-through kitchen and lovely hardwood floors, both installed approximately two and a half years ago, and open views north are arresting.  Offered for $1.05 million with common charges of $1,076 and taxes (PILOT) of $1,368 monthly, it is under contract certainly for less than $1 million as of earlier this month.
  • In a 1989 low-rise with garage, fitness room, valet, billiards room and laundry, a basic one-bedroom apartment overlooking a wide street to the east.  With original pass-through kitchen that has laminate countertops but new stove and dishwasher, closets that have inexpensive bifold doors, parquet floors and a bath that has its original large marble tiles, the 632-sf condo is listed for $435,000.  Monthly common charges and taxes add up to $1,782, and the unit found a buyer a few weeks ago.
  • A pleasant one-bedroom 716-sf condo that had its bath, pass-through kitchen and floors nicely updated eight years ago.  Closet space is good, there is a small balcony, the standard-height ceilings are of the popcorn variety, there is a washer/dryer, air conditioning is central and the condition is good.  In a 1986 pet-friendly high-rise with minimal amenities, the apartment had an aggressive offering price of $739,000 with combined costs of $$1,941 per month.   But the owner has thrown in the towel: This place went on the rental market last week for 3,200 a month.
  • On the market for a sobering $1.089 million with combined monthly taxes and common charges of $2,122, an 1,100-sf one-bedroom apartment on a lower floor.  This spacious condo with superb finishes and appliances is said by the broker to lend itself  “easily to a two-bedroom conversion,” but the resulting truncated space would be tragic.  Its features include central air conditioning, floor-to-ceiling windows, washer/dryer and high ceilings. The full-service 2006 building provides a garage, valet and gym.
  • Several spacious condos in a newly redeveloped high-rise ranging in price from $561,750 for a studio to $2.7 million for a three-bedroom, three-bath unit and monthly costs from $1,243 to $4,197.  These stylish apartments  tend to have exposures from decent to wonderful, excellent use of space, first-rate appliances (even washer/dryers in some of the units) and quality finishes.  There is a quirky ground-floor condo with 1,009 square feet, a closet bigger than some bedrooms and a price of $840,000 with common charges and taxes adding up to $2,178 per month.  The gym and swimming pool in this pet-friendly doorman building are excellent.
  • A one-bedroom apartment that was fully renovated in 2007 with exceptionally refined taste and no expense seemingly spared.  With standard-height ceilings, the 625-sf condo boasts top-of-the-line appliances, cabinets and countertops in its open kitchen, customized closets, a lava stone floor in the tastefully updated bath and, unfortunately, an exposure just over a rooftop into a wide courtyard from a lower floor.  Its reduced asking price of $489,000 with costs totaling $1,691 a month fails to recognize the unit’s major deficiency, that view.
  • Overstuffed with oversize furniture, a one-bedroom condo with unusually low combined monthly costs of $1,264.  Renovated only two years ago, this unit in a 1986 building with few amenities manages to appear dated, its pass-through kitchen is much bigger than average, and there are newer extra-large windows, a washer/dryer and a good amount of closet space.  At $630,000, the listing price implies sellers whose level ofoptimism exceeds the market’s appetite for such an apartment.

Tomorrow: Scalpel anyone?

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

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