Off the Waterfront

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“This is my waterfront! You mess with it, I break your legs!” This is the public statement of a cheerful black-and-white dog, wearing sunglasses and clamping an unlit cigarette in his mouth. The man moving the dog’s jaw and speaking on his behalf is Kevin Catucci, Executive Vice President of American Stevedoring.

Since the family-run shipping company took over a lease from the Port Authority of New York and New Jersey in 1994, the marine terminal in Red Hook, Brooklyn, has been transformed from a moribund outpost to a thriving port, right near the belly of lower Manhattan. On any given day, it employs upwards of 200 people, depending on the volume of boat traffic, and Catucci claims an annual payroll of $37 million. Piles of lumber bound for Home Depot, sacks of cocoa from Indonesia heading to Nestlé, truck-size containers of the power beverage Red Bull–this is how they all come into New York. “We’ve made a success out of Red Hook,” boasts Sal Catucci, Kevin’s father and CEO of the company.

But the Catuccis and their business may not be in Red Hook for much longer. Their lease expires a year from now, and the Port Authority, which leases the site from the city’s Economic Development Corporation (EDC) and spends several million dollars a year to keep it going, has sent strong signals that it does not intend to renew it.

This winter, the Port Authority and EDC hired the consulting firm Hamilton, Rabinovitz & Alschuler (HR&A) to study the economic viability of other possible uses for the 80-acre Red Hook Marine Terminal site, which encompasses Brooklyn piers 6 through 12–including housing, retail and recreation. The two agencies’ request for proposals for a “Preferred Alternatives Development Plan” stresses “strategic advantages” that could attract developers, including “idyllic vistas of the Manhattan skyline…proximity to major business districts…and a number of economically and culturally vibrant neighborhoods, such as Carroll Gardens, Cobble Hill and Park Slope.”

Even in the current weak economy, the Red Hook waterfront could attract big private development dollars. At the eastern border of the marine terminal, a Boston developer is looking to turn a former dock warehouse into lofts. Directly to the north is the site of the soon-to-be Brooklyn Bridge Park, which the Port Authority has committed $85 million to help build on its old piers 1 through 5. And just to the west is the hot property of Governor’s Island.

One of HR&A’s tasks will be to identify developers and commercial tenants who are interested in the Marine Terminal site; another is to assess the real estate market and land use trends just inland from the waterfront. The consultant will ultimately come up with three or more development schemes that maximize economic benefits for the neighborhood, city, state and Port Authority.

But even if HR&A discovers that new commercial development could bring in more public revenue than a port, some urban planners argue that shutting down shipping would be disastrously shortsighted. “A diverse economy that includes a balance of industry and commerce and services is a key to urban stability,” points out Laura Wolf-Powers, a planner with the Pratt Institute Center for Community and Environmental Development. “The Port Authority is driving this, and EDC is going along. Someone should hit them upside the head and say, ‘What are you doing?'” Wolf-Powers is talking with the Municipal Art Society and the South Brooklyn Local Development Corporation about putting together an alternative plan for the site that would focus on retaining industrial and maritime operations.

Congressman Jerrold Nadler, who has been on a decades-long crusade to unclog freight commerce in the New York region, is outraged that the Port Authority may effectively end all shipping in New York outside of Staten Island. “They have managed to concentrate everything in Newark Bay instead of New York Harbor,” says Nadler. As the congressman asks his colleagues on the House Transportation Committee to provide billions of dollars to help move freight in New York, he believes shutting down Red Hook would send the message that New York City isn’t even interested in maintaining its existing shipping operations. “When has the Port Authority ever closed an existing port?” demands Nadler.

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Just a couple of years ago, it would have been hard to imagine City Hall letting the Port Authority back out of Red Hook. In 2000, EDC spent $12 million to add two new cranes to Red Hook’s waterfront, helping bring the marine terminal’s shipping volume to an all-time high of about 80,000 containers a year. It was part of an ambitious plan from EDC to expand the city’s ports, including building an entirely new operation in Sunset Park, Brooklyn.

This was the rare Giuliani economic development scheme that promised to pay off for New Yorkers. In 1999, Giuliani’s EDC predicted that cargo demand in the New York area was going to triple by 2020, and that every inch of port space in the region needed to be used both to keep port jobs from fleeing elsewhere on the east coast and to keep local roads and air from strangling on truck traffic.

All in all, the port plan called for an investment of $1.5 billion over 20 years to develop 1,200 new acres of port space in the city, bringing 30,000 jobs and $300 million in annual tax revenue. Red Hook would triple its container volume by 2010, at which point the entire operation would move further down the Brooklyn waterfront to the new and bigger port in Sunset Park, which would have access to rail lines. From then on, Red Hook would specialize in “break bulk” cargo like cocoa and bananas, shipped in piles and sacks instead of containers, hundreds of thousands of tons of it a year. The city’s plans also called for doubling the size of Howland Hook, in Staten Island, which the Giuliani administration reopened as a container port in 1996.

But a full-fledged port running the length of Sunset Park will cost hundreds of millions of dollars. Building out Howland Hook to its full capacity will cost the city another half-billion. Facing record budget deficits, the city is now assessing whether it will move forward with port development. The Bloomberg administration will not comment on the status of the previous administration’s port plans. “It’s premature to discuss,” says EDC spokesperson Janel Patterson. “That’s the purpose of the study, to give us an idea of the best use of the [Red Hook] site.”

The future of a Sunset Park port also depends on dollars and decisions from Washington. This September, Congress is set to reauthorize major transit legislation known as TEA-21, and Rep. Nadler is determined to use the new appropriation (“TEA-3”) to fund a cross-harbor freight tunnel. This is the very project, as Nadler relishes pointing out, that the Port Authority was created to build in the first place. The tunnel would permit freight trains to cross the harbor from Bayonne to Bay Ridge, just south of Sunset Park, then roll onto currently unused train tracks crossing Brooklyn and Queens.

The immediate effect would be to take millions of truck-miles off the roads. But a tunnel would also make Brooklyn ports viable: Sunset Park, with wide-open ocean access, naturally deep waterways, unused rail lines and now a way to get freight across the harbor to the mainland, has the potential to be a valuable star in the harbor’s constellation of ports.

At Nadler’s prodding, the Bloomberg administration made one small step in February, when it agreed to put a freight tunnel on its list of priority TEA-3 funding requests to Congress. And EDC is currently in negotiations with a Georgia company to run a new auto terminal at 29th Street in Sunset Park, the first phase of the full port plan.

But without firm commitments from EDC on the future of the Sunset Park port, even would-be supporters of new housing development in Red Hook say the city can’t afford to lose the Marine Terminal and its high-paying jobs. “If they have a port at Sunset Park, I have less trepidation about losing the Red Hook container port,” says City Councilmember David Yassky, who chairs the Select Committee on Waterfronts. “Without knowing more clearly what’s happening in Sunset Park, I’m very leery about losing the last container port in Brooklyn, Queens and Manhattan.”

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No matter how the city proceeds, the future looks bleak for American Stevedoring. The Catuccis have been talking to Phoenix Beverage, a New Jersey company that distributes Heineken and other beers, and currently delivers the goods from Elizabeth to New York City via truck. Phoenix has expressed a willingness to move its east-of-the-Hudson operations from Long Island City to Pier 12, bringing perhaps 650 more jobs–but only if the move comes with a long-term lease commitment from the Port Authority.

Under the current terms, a new lease is the last thing the Port Authority wants. The agency spends $267,000 a month for a barge to shuttle containers back and forth between Red Hook and transportation connections on the mainland in New Jersey, so that goods coming through Red Hook can travel west of the Hudson River. (The Catuccis say they pay another $76,000 to keep it going.) Last October, Port Commerce Director Richard Larabee told the City Council Select Committee on Waterfronts that “the Port Authority will continue to fund this service through the end of the new lease”–until April 2004.

“We’re looking to find out if there is a better use for that property,” says Port Authority spokesperson Steve Coleman. “We’re really concerned about the subsidy the Port Authority has to continue to pay for Red Hook.”

Larabee also alluded to “a variety of new economic realities confronting New York City and the region.” Though he didn’t identify it, one reality is the vow of the Danish shipping giant Maersk Sealand to abandon its operations in New York Harbor if the Port Authority fails to dredge its New Jersey shipping terminals and waterways to a depth of 50 feet by 2009. The agency has committed to spend billions of dollars to bore its way through toxic sludge and rock in Newark Bay. The Red Hook port, which accounts for just 2.4 percent of all the goods shipped into New York Harbor, costs the Port Authority money but does nothing to help retain Maersk.

Phoenix, however, wouldn’t need a costly cross-harbor barge, and neither do other operations like it–companies that are simply trying to get bulk goods from the mainland into Brooklyn, Queens and Long Island via water instead of truck. In an effort to convince the Port Authority to keep the Red Hook Marine Terminal going, some local officials are now floating the idea of an alternative to the international container port American Stevedoring wants to keep running: a local niche operation that doesn’t cost the Port Authority anything to keep afloat. Tenants like Phoenix could be rounded out by Carnival Cruise Lines, which has expressed interest in building a berth at Piers 6 and 7.

Supporters of the alternative say that turning the Marine Terminal into a local delivery depot would be the best of all worlds: a way to keep port jobs in New York and Red Hook, and to keep trucks off the roads. At that site, “a container port probably isn’t going to be a profit-making industry,” says one government aide. Rethinking the Red Hook port is fine, says the aide, as long as the neighborhood retains a working waterfront: “That’s not a bad thing–especially from the point of view of the Port Authority.”