Staff: Committee on Waterfronts
Jeffrey Baker, Counsel
Colleen Pagter, Policy Analyst
Subcommittee on Landmarks, Public Siting
& Maritime Uses
Christian Hylton, Counsel
Alonzo Carr, Senior Supervisory Project
Manager
THE COUNCIL
Briefing Paper of the
Infrastructure and Land Use Divisions
Robert Newman, Legislative Director
COMMITTEE ON WATERFRONTS
Hon. Michael C. Nelson, Chair
SUBCOMMITTEE ON LANDMARKS, PUBLIC SITING &
MARITIME USES
Hon. Jessica S. Lappin, Chair
December 14, 2006
OVERSIGHT: South
Brooklyn Working Waterfront
I. Introduction
On December 14, 2006, the Committee on Waterfronts, chaired by Council Member Michael C. Nelson, and the Subcommittee on Landmarks, Public Sitings & Maritime Uses, chaired by Council Member Jessica S. Lappin, will hold a joint oversight hearing on the South Brooklyn working waterfront. Those expected to testify at the hearing include the New York City Economic Development Corporation, Congressman Jerry Nadler, and interested members of the public.
II. History
of the Port of New York and New Jersey
In the 19th century, New York led the world in port commerce, shipbuilding, and industry. [1] At that time, freight was loaded onto ships in boxes and bags of all sizes. The docks and piers of New York were well suited for these smaller ships and their proximity to central business districts allowed cargo to be easily distributed.
In the 1950s, the shipping industry was revolutionized by the development of containerization. Cargo that before had been loosely packed onto ships was now placed into individual metal shipping containers. A standard container is 40 feet in length, 8 feet wide, and 8 feet tall or two “twenty foot equivalent units” (TEUs).[2] Containers may be stacked onto ships, unloaded by cranes, stored outside, and placed directly onto trucks and rail cars. Before the use of containers, 17 stevedores could unload 40 tons of cargo in an hour; with containers, the same team can now unload 500 tons.
Containerization, however, placed
new demands on the physical facilities of the port. For storage purposes, containers demand large amounts of landside
space where they can be stacked, instead of warehouses. Containers also allow ships to be much
larger and to carry more goods. These
large ships, however, can only dock alongside flat bulk headed shoreline
because “finger piers” (which dominated much of the Manhattan and Brooklyn
waterfront) are too small to accommodate such large vessels. As a result, New York City’s facilities
became outdated and New Jersey, with significant amounts of available space,
was developed as the regional port.
Today, the Port of New York and New Jersey (Port) is the third largest port in the country in terms of containers imported, following Los Angeles and Long Beach, California, and the largest on the East Coast.[3] In 2005, the Port loaded 3,385,003 TEUs of goods, representing 58.4% of the total North Atlantic market share. Including empty containers, the Port handled 2,803,447 containers representing 4,792,922 TEUs.[4]
In the New York and
New Jersey area, Port-related industries support over 120,000 jobs directly,
and another 110,000 indirectly. The
bulk of those jobs are in wholesale and warehousing, but also include jobs in
government, banking, and passenger transport.
Port-related industries generate $15.5 billion in GDP and $5.8 billion
in local, state and federal tax revenues.[5] In New York City alone, the three major port
facilities directly and indirectly support approximately 120,000 jobs.[6]
III. South
Brooklyn Working Waterfront
The South Brooklyn Working waterfront exists of mainly of three areas: Red Hook, Sunset Park, and Erie Basin. The facilities at Red Hook consist of the Brooklyn Piers and the Red Hook Container Terminal and are collectively known as the Brooklyn-Port Authority Marine Terminal. The facilities at Sunset Park include the South Brooklyn Marine Terminal (SBMT) and the Bush Terminal Piers. The Erie Basin Barge Port in Erie Basin is the largest private marine facility in the Northeast.
a.
Brooklyn-Port Authority Marine Terminal
In 1956 the Port Authority of New York and New Jersey (Port Authority) purchased property along two miles of Brooklyn’s waterfront south of the Brooklyn Bridge for approximately $14.3 million. Originally the facilities included Piers 1—12, however, piers 1—6 were subsequently transferred to the Brooklyn Bridge Park Development Corporation (see below). The entire area is a complicated patchwork of property owned by the Port Authority, the City of New York (City) and the State of New York (State). However, most of the area is owned by either the Port Authority or the State.
1. Brooklyn
Cruise Terminal
On May 2, 2006 the Brooklyn Cruise Terminal at Red Hook, operating on Pier 12, opened with the arrival of the RMS Queen Mary 2. The need for the Brooklyn Cruise Terminal is due to the changes in the cruise industry and the projected increases in the volume of cruise ship passengers. The New York Cruise Terminal in Manhattan was built in 1930 and renovated in 1970 to handle the volume of cruise ships coming into the Port and could accommodate up to five ships at one time. However, due to the tremendous growth of modern cruise ships, those facilities are now obsolete and are again under renovation. When the facilities are complete, the New York Cruise Terminal will only be able to handle three of the large Post-Panamax[7] cruise ships at once.[8]
The Economic Development Corporation (EDC) projects that passenger volumes will grow to 1.5 million annually between 2010 and 2020.[9] Due to the projected increase in volume, EDC has determined that the City will require five passenger terminals berths. With the decrease in berths at the New York Passenger Terminal from five to three, the City had to find alternative locations. When EDC determined that additional cruise berths were needed, they investigated the availability and feasibility of using one of the piers between Pier 7 and Pier 12 at the Brooklyn-Port Authority Marine Terminal. Several alternatives were investigated, and two oversight hearings were held on the Brooklyn Cruise Terminal by the Committee on Economic Development jointly with the Committee on Waterfronts in 2004.
Eventually,
Pier 12 was selected, and the Port Authority approved a lease in September of
2004.[10] Ground breaking began in 2005 and the
facilities opened on May 2, 2006. The
180,000 square foot terminal can handle 4,000 passengers and includes a rebuilt
building, new bollards and fenders, an internal roadway, a 500-car parking
area, and taxi and bus drop-off areas.
In 2004, the Brooklyn Cruise Terminal was projected to create 600 direct
and indirect jobs in Brooklyn in 2005, and 825 jobs by 2009.[11] EDC would like to open a second berth for
cruise ships at the Brooklyn-Port Authority Marine Terminal, and consider Pier
10 to be the most attractive candidate.[12]
2. Brooklyn
Bridge Park
In December of 2003, the Port Authority agreed to transfer Piers 1—5 to the Brooklyn Bridge Park Development Corporation[13] for the purposes of developing the Empire-Fulton Ferry State Park and the Brooklyn Bridge Park.[14] In October of 2005, the agreement was amended to include Pier 6.[15] The transfer of Piers 1—6 was completed in February 2006 and construction of the park is scheduled to begin in 2007.[16]
3. Red
Hook Container Terminal
In 1980, the Port Authority sought to increase the size and capabilities of the existing Brooklyn-Port Authority Marine Terminal. The Port Authority entered into an agreement with the City of New York and State of New York to begin the construction of a 40-acre container terminal. Today the Red Hook Container Terminal is 80-acres in size, consisting of Piers 9A, 9B, 10 and 11, and can handle container, RO/RO[17] and break-bulk[18] cargo.[19] The Port Authority currently leases Piers 9A, 9B and 10 to American Stevedoring[20], Inc.,[21] although the lease is up in March 2007.
The EDC is currently seeking to obtain Piers 7-12 from the Port Authority for further development of the Brooklyn Cruise Terminal and other development projects, however, with the upcoming change in State administrations, is it unclear at this time whether the Port Authority will be willing to transfer the property to the City.
b. South Brooklyn Marine Terminal
The
South Brooklyn Marine Terminal (SBMT) is an 88-acre marine terminal located
between 29th and 39th streets in Brooklyn, just south of Erie Basin. The SBMT is owned by the Port Authority and
managed by EDC. EDC has invested $21 million in the reconstruction and rehabilitation of
several bulkheads at the South Brooklyn Marine Terminal (SBMT), from 21st
Street to 39th Street, and $17 million to modernize rail connections
between the SBMT and the 65th Street Rail Yard.[22]
On November 8, 2004, EDC announced a lease with Axis Group, Inc. for a
74-acre facility for importing autos and general cargos.[23] The 20-year lease (with two 5-year
extensions) was approved by the City Council on June 29, 2006, and is projected
to create 165 auto-processing jobs and
more than 140 new jobs related to stevedoring, warehousing and associated
activities.[24]
Construction of the facility will create more than 300 additional jobs.[25]
In
September 2004, the City announced that Sims Hugo Neu, one of the nation’s
largest scrap metal processors, plans to build a $25 million modern recycling
facility just north of the proposed automobile processing facility at SBMT.[26] The City will deliver to Hugo Neu all of the
metal, glass, plastic, and a portion of the mixed paper that the Department of
Sanitation currently collects through its residential curbside recycling
program as part of the Solid Waste Management Plan (SWMP) for the next 20
years.[27] The construction of the facility will create
160 construction jobs and 100 permanent jobs.[28] The Sims Hugo Neu facilities will receive
recyclables from the Department of Sanitation New York (DSNY), reducing the
DSNY’s vehicle miles traveled by 55,000, annually.[29] This project has not yet been approved by
the City Council.
c. Bush Terminal Industrial Complex
1. Background
and City Park
Bush
Terminal Industrial Complex (Bush Terminal) is a City-owned industrial facility
located on the Brooklyn waterfront between approximately 41st and
52nd Streets. Prior to
1974, the Bush Terminal was an active port.
In 1974, the former City of New York Department of Ports and
Terminals contracted with a private company to fill in the areas between the
four piers with clean construction-related fill. In 1978, the private fill contractor was cited for violations
related to the quality of the construction-related fill and filling operations
at the landfill were halted at the request of New York City.[30] During testimony presented before New York
State Legislators in 1982, the City learned of alleged illegal disposal of
liquid wastes at the landfill including oils, oil sludges, and wastewaters.[31] The City subsequently secured the property
with perimeter fencing. Between May 1999 and May 2001, the EDC conducted a wide-scale
site investigation of the environmental contamination at the Bush Terminals
with oversight from the State Department of Environmental Conservation (DEC). Further studies were conducted between March
and July 2002. Based on the results of
the investigation, DEC issued a March 2004 Record of Decision for a cleanup
plan.[32] In April 2006, the federal government
awarded $8 million, State awarded $17.8 million and the City budgeted $9
million for the cleanup of the site for a new multi-use public park.[33]
2.
CP Cimentos
CP Cimentos, is a privately owned holding company and owner
of two cement producting companies[34],
and until recently, was the seventh largest producer of cement in Brazil. CP Cimentos won an RFP to rehabilitate Pier
6 for a cement importation operation.[35] Recently, however, CP Cimentos has had
serious financial difficulties with a short-term debt obligation totalling $228
million.[36] On October 1, 2006, CP Cimentos defaulted on
$46.7 million in debentures, and on November 27, 2006, they sold off their
interest in one of their subsidiaries, Companhia de Cimento Ribeirao Grande, for $195 million in as part of a debt restructuring plan.[37] It is unknown at this time what effect CP
Cimentos’ financial difficulties will have on the rehabilitation of Pier
6. This project has not yet been approved by the City Council.
3.
Unit B Request for
Proposal
On August 22, 2006 the EDC issued a request-for-proposals (RFP) for the leasing of Unit B, a 265,200 gross square-foot, six-story loft building for industrial uses including but not limited to manufacturing, distribution, warehouse and back office purposes.[38] The RFP will close on December 31, 2006.
d. Erie
Basin
The Erie Basin Barge Port is the largest private marine facility in the Northeast and is managed by Hughes Marine Firms. As there is no City-owned property in Erie Basin, it is unlikely that EDC has any waterfront development plans for that area. However, there is one property of interest to the Council in Erie Basin. Thor Equities, a property developer and manager, purchased the Revere Sugar Factory in Erie Basin in September 2005 and plans to develop luxury apartments on the site. Currently the lot is zoned M3-1 for heavy manufacturing, and also falls within the Southwest Brooklyn Empire Zone.[39] On December 5, 2006, Thor Equities obtained a demolition permit from the Department of Buildings, but it is likely that Thor Equities would need to obtain variances prior to any construction. Thor Equities has not yet done so.
IV.
Conclusion
The hearing today will examine the potential uses of the Brooklyn waterfront and the long term plans of the City, as expressed by the New York City Economic Development Corporation. The Committees hope to hear from ECD about their strategic vision for the entire waterfront, how all the individual development projects fit together, and how they intend to balance the City’s need for commercial and residential development, with the needs of waterfront dependent industries, such as shipping and manufacturing.