BATTERY PARK BRAWL BREWING
By Steve Cuozzo
A SIMMERING squabble over development rights to a precious Battery Park City site has come to a rolling boil.
The Battery Park City Authority, the state agency that oversees the 92-acre complex, plans to soon issue a request for proposals for a huge lot at West Street between Vesey and Murray streets.
The RFP will invite developers to compete for the right to lease the land and put up a giant office tower just north of the American Express headquarters in the World Financial Center, Battery Park City's commercial heart.
Trouble is, Brookfield Properties – which controls some 10 million square feet of space in Manhattan, including most of the WFC – claims it already holds those rights. Yet it declines to say how or why.
The stakes are high. BPCA wants to strike a deal soon, and a delay over who has first dibs on the site could result in the agency's missing the market's peak – a peak many industry insiders fear will soon flatten.
Right now, both sides want to downplay the test of wills. BPCA President and CEO Tim Carey says, "We have no animosity. Brookfield is a great tenant. And we like John Zuccotti" – the influential lawyer who runs Brookfield's U.S. commercial operation. "But they simply have no claim to Site 26."
Through a spokesman, Peter Rosenthal, Brookfield says, "Brookfield is aware of the BPCA position, and BPCA is aware of Brookfield's position. Beyond that, no comment."
The Brookfield position, spelled out in its annual report, is: "Brookfield has rights over the development of the last two remaining office sites in Battery Park City … including the largest immediately developable site in Manhattan."
And Brookfield's corporate profile, available on its web site, confidently lists Site 26, with "2 million square feet," under the heading "development operations."
BPCA and Brookfield have, in effect, agreed to disagree over the site for years – as long as the agency had no immediate plans to put it on the market.
But now everybody's waiting to see who will blink first.
In a city starved for space, Site 26 is almost incalculably valuable. Right now, the rectangular lot, between West Street and the new Embassy Suites Hotel, is an unsightly mess of parking lots and rubble.
Carey says that based on zoning formulas used elsewhere in Battery Park City, the site allows a tower of about 1.88 million square feet. That's larger than all but a handful of Manhattan skyscrapers, and as big as the proposed New York Stock Exchange headquarters – a tower that Brookfield is also vying to build.
Unlike that project, the Site 26 scheme can be built without time-consuming condemnation proceedings. It could provide a company with a new corporate home amid Battery Park City's roster of prestigious tenants, including Merrill Lynch, Dow Jones, Oppenheimer, and the N.Y. Mercantile Exchange.
ForestCity Ratner previously expressed interest in the site, and the RFP is certain to draw the attention of developers who seem to pop up in every bidding war – among them, Related, Vornado and Trump.
To BPCA officials, the reasons for Brookfield's claim are as murky as the mists off the Hudson. Carey says he has "no sense of what the basis is for Brookfield's claim."
One theory is that Brookfield means to protect views from the American Express tower, built in the 1980s by Brookfield's predecessor company Olympia & York. Canadian-based O&Y went bankrupt and later – under the deft leadership of one-time Deputy Mayor Zuccotti – emerged as publicly traded Brookfield.
Brookfield owns the long-term lease on the WFC's three other towers, but transferred its lease on American Express to the company in 1983.
Carey declares, "There is a view corridor issue, but it has nothing to with control of the site." He says, in fact, that view corridor considerations are "built into the RFP," likely to go out within six to eight weeks.
"It has to do with where you position your tower on the base. There's a view corridor you have to maintain looking north."
Site 26 is the biggest of Battery Park City's missing pieces which Carey, appointed by Gov. George Pataki last year, is aggressively moving to fill.
Carey points out that the BPCA and Brookfield are working together with city officials to strike a deal for a new headquarters for investment bankers Brown Brothers Harriman at another Battery Park City site not far from Site 26.
But: "Our own counsel, the governor and the city's Economic Development Corp. agree on Site 26. Brookfield's claim is nonexistent."
If Brookfield sticks with its claim, will the whole mess end up in court?
"I have no idea," Carey says.
* Please send e-mail to: scuozzo@nypost.com