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Bryant Park Case Study New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Analysis of Secondary Economic Impacts New York City Parks Capital Expenditures Final Report New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Table of Contents: Executive Summary………………………………………………………………………………… 3 Bryant Park Case Study…………………………………………………………………………….16 Prospect Park Case Study…………………………………………………..………………………66 Clove Lakes Park Case Study…………………………………………………….………………120 St. Albans Park Case Study……………………………………………………………………….149 Crotona Park Case Study………………………………………………………….………………192 Serrano Park Case Study…………………………………………………………………….……224 30 Parks Analyses………………………………………………………………………………...255 2 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary Primary Objectives: • Determine the secondary economic impacts of capital spending for park improvements on the value of residential and commercial properties located adjacent to improved parks, and, • Understand whether there is a basis for successful reinvestment in community parks that results in positive fiscal impacts. Main Findings: • Capital reinvestment in parks results in tangible fiscal benefits when they are secured and preserved through effective administration, community participation and maintenance. • Residential assessment and sale prices were analyzed, from 1992 to 2001: – Assessments near an improved park generally exceeded assessments further from the park, ranging from approximately 8% to 10% – Single family home sale prices in close proximity to a well improved park typically exceeded sale prices further from the park, ranging from 8% to 30% – Single family turnover rate was generally lower near well improved parks as compared to adjoining areas. Quality parks serve to stabilize local communities and are a catalyst for the redevelopment of adjacent real estate. • Commercial asking rents in properties near a well improved park generally exceeded rents in surrounding submarkets. From 1992 to 2001: – Asking rents near Bryant Park increased from 115% to 225%, as compared to increases ranging from 41% to 73% in the surrounding submarkets 3 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary Case Study Analysis Analyzed six case study parks to identify their impact on surrounding real estate: In summary, real estate near each park typically outperformed comparable real estate in adjoining neighborhoods Close proximity to a quality park is a positive site attribute that can enhance the appeal and value (“curb appeal”) of adjacent real estate to developers/purchasers/tenants. The potential impact of a neighboring park is a strong consideration as part of the decision to purchase, invest or finance a property. Bryant Park - Park renovation has created a strong amenity to the local office market, resulting in dramatic increases in commercial office rents in comparison to surrounding submarkets Prospect Park - From 1992 to 2001, the average actual assessments for Park Slope single-family and multi-family near the park exceeded those further from the park by nearly 150% and 73%, respectively Cloves Lake - On average, from 1992 to 2001, the sale price of a single family home (on a price per square foot unit basis) has been approximately 50% higher in the immediate park area than the area further from the park St. Albans - Average actual assessed values near the northwest section of the park were approximately 27% higher than areas further from the park from 1992 to 2001 Crotona Park - From 1992 through 2001, the average assessment for co-ops and condominium properties near the park exceeded the adjoining areas by an average of approximately 50% Serrano Park - Average real estate tax collections for single family properties near the park exceeded tax collections from areas further from the park by approximately 9% per year from 1992 through 2001 4 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) 30 Park Sample Analysis • Thirty parks were analyzed on an summary basis to identify the parks’ impact on surrounding real estate. Findings include: – Analyses of capital expenditures indicate that the current capital investment process yields less desirable results on an overall basis. – Contributing factors to these results include: local real estate markets that are weak, and not well positioned to immediately benefit from park improvements; poorly maintained improvements and limited community involvement. – Of the top 15 parks in terms of capital expenditures, 55% of the tax classes analyzed showed a less desirable difference in the overall growth rate of assessed values from 1992 to 2001 between areas in immediate proximity to a park and further away. 5 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Objectives/Methodology To measure the impacts of park capital spending on the assessed and sale values of properties immediately surrounding selected New York City parks in comparison to changes in overall market conditions Identify local development trends that may result from park investment and on-going maintenance programs Identify investment, organization and management factors associated with effective and on-going capital expenditure programs Develop a comprehensive methodology for determining the impacts of park capital spending 6 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Overview of Objectives/Methodology - continued • To measure and isolate a park’s impact on the area immediately surrounding the park, the following steps were taken: – Defined a Park Impact Area (“PIA”) and Control Area (“CA”) for analysis: • PIA – generally established as one-two blocks immediately surrounding the park • CA – typically three-four blocks adjacent to PIA - established to hold constant the influence of other factors that might impact real estate values – Reviewed historic (1990 – 2001) and projected (2006) socioeconomic trends in PIA and CA – Analyzed and evaluated trends in historic (1992 – 2001) real property data including: • Assessed values • Sale prices • Analyzed trends in historic park expenditures – Capital projects – On-going maintenance/operations (for selected properties where data was available) • Interviewed real estate professionals (e.g., local real estate brokers, community officials, etc.) to obtain their prospective on a given park’s influence on the surrounding neighborhood 7 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Overview of Case Study Methodology • For the in-depth Case Study analyses: –Physically inspected each park and its surrounding neighborhood –Identified PIAs and CAs –Summarized park revenue/expenditures •Identified major sources and uses of funds –Reviewed organization and management structure –Compared PIA vs. CA: •Analyzed the predominant property types to: –Measure and compare change in historic (1992-2001) actual and transitional assessments –Calculate average real property tax receipts for certain property types –Summarize change in historic sale prices –Reviewed commercial rental rates (Bryant Park only) •Compared historic and current asking rents in selected buildings to surrounding submarkets –Reviewed socioeconomic data – population, income, age, etc. –Methodology used varied from one park to another depending on the availability and relevance of information 8 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Overview of 30 Park Sample Methodology • For 30 Park Sample Analyses: –Identified PIAs and CAs –Summarized park revenue/expenditures –Compared PIA vs. CA: •Analyzed the predominant property types to: –Measure and compare change in historic (1992-2001) actual and transitional assessments –Summarize change in historic sale prices 9 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Conclusions • There is a broader implication for parks as an integral factor for economic development providing significant external benefits that attract investment that is definable and identifiable. Well improved and maintained parks clearly demonstrate the ability to positively impact community development and stimulate economic returns to the city-at-large. • Parks are undervalued community assets than can be redeveloped through effective planning, administration,and community participation. • Strategic reinvestment in parks, as a part of overall community development planning, can effectively enhance local property values and promote investment in emergent real estate markets. • Site specific strategic planning needs to be put in place to capitalize on a park’s ability to promote private sector investment and corresponding fiscal benefits as part of an overall community development plan. • The New York City Department of Parks & Recreation does not appear to have a system in place to track maintenance expense and general conditions on a park-by-park basis. • The relationship between the preservation of capital improvements and on-going maintenance expenditures requires further study. • While this study analyzes changes of value on a historic basis, further study is required to identify the optimal timing of capital investments in relation to an overall community development plan. 10 New Yorkers For Parks PARK EXPENDITURES SECONDARY IMPACT ANALYSIS Executive Summary (continued) Lessons Learned • General lack of accurate
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