Over the weekend, the NYC Ferry announced its Greenpoint, Brooklyn stop was suddenly no longer operating thanks to a property dispute between the city and the pier’s new owner.
Earlier this month, two Australian firms—real estate developer Lendless and pension fund Aware Super—partnered to purchase 1 Java Street for $110.8 million from RedSky Capital, making the partners the new owners of a large waterfront property that includes the India Street ferry pier.
"Due to temporary restrictions to the Greenpoint pier, ferry service to and from the Greenpoint landing will be suspended until further notice," Hornblower, a company which operates the NYC Ferry, tweeted on Sunday morning.
According to New York Daily News, an EDC spokesman said the ferry was barred from using the pier until "insurance issues" and "the transition of paperwork from the old owner to the new one" are resolved.
“We are hopeful we can resolve it today,” Mayor de Blasio said at his daily COVID-19 press conference on Monday. “This one is confusing to people because it’s confusing in general, and the goal is to settle it very quickly and get that ferry stop back into service.”
Lendlease and the NYC Ferry service did not respond to Motherboard’s request for comment.
Despite being built with public money through the city's Economic Development Corporation (EDC) and operated on the city’s behalf by Hornblower Cruises, the city hasn't actually ever owned the Greenpoint ferry pier.
In 2010, the EDC solicited developer proposals for a new East River pier. Stiles Properties (an intermediary of RedSky Capital) was the only applicant and won the contract, buying a strip of land from the city’s Industrial Development Agency for $60,000 in 2011 on the condition that it also build a pier. At the same time, Stiles Properties applied to build another pier on India Street and would go on to focus its efforts there.
On June 13 2011, the East River ferry service was launched. The Greenpoint stop is one of many to provide reliable service between Manhattan, Brooklyn, Queens, and Governors Island. Ever since, however, while the stop has been operational it has also seen constant service disruption thanks to construction and repair work.
While yet another service disruption may seem extraordinary, it makes sense when considering some of the early criticisms of the initial pier development project and the woes that its developers have faced since.
NYC Ferry service has a small ridership and a high cost of operation—each ride costs $10 and ridership has dropped 80 percent thanks to covid-19. Even before covid, ridership numbers were low and concerns were abound about whether the project could ever sustain itself without taxpayer subsidies. This suggests, then, that early critics were right in characterizing the pier as a bid its owners to attract more interest in future development projects
In fact, RedSky Capital has admitted as much. The firm is open about the fact that it developed the pier as part of a risky gambit in anticipation of rising waterfront property values that it could reap the rewards of with a 40-story skyscraper. The bet quickly fell apart and soon, RedSky Capital’s partner had substantially written down its stake in the real estate portfolio, the debt used to finance the project was unloaded.
Either way, this is just the latest example of yet another public-private partnership that has left the public out to dry.