BJH is providing financial and economic advisory services to Empire State Development in the redevelopment of a portion of surplus land at Belmont Park in Nassau County. The project, which is being privately funded, will create a new home for the New York Islanders, as well as new retail, hotel and entertainment facilities. ESD’s designated development partner has also agreed to invest in site and transportation improvements that will enhance accessibility and improve the public realm. BJH’s role included assisting with the draft Environmental Impact Statement (EIS) and analyzing the economic and fiscal impacts of the project, which will include the creation of over 3,000 permanent jobs and 10,000 construction worker-years.
BJH worked with New Jersey based planning and development firm Topology on four separate residential development projects in Essex, Union, and Morris counties in New Jersey. BJH used cash flow models to perform sensitivity analyses on market assumptions and Payment In Lieu of Taxes (PILOT) structures. BJH used these analyses to examine the financial feasibility from the developers’ perspectives while also considering the impact on the municipalities’ character, density and future tax revenues.
BJH is currently undertaking a series of tax and payment-in-lieu-of-tax or PILOT analyses for New York State public clients for large-scale infrastructure projects. BJH is responsible for constructing PILOT models that include full-tax runs including as-of-right tax policy (e.g. 421-a), as well as sensitivities with discretionary tax policy built-in, including the Industrial and Commercial Abatement Program and Hudson Yards Uniform Tax Exemption Policy programming. The tax/PILOT analysis is meant to feed into full development pro formas, as well as to provide the basis for better understanding debt capacity and funding streams that may be used by the public entities to pay for infrastructure and other project related elements.
Empire State Development (ESD) / Moynihan Station Development Corporation (MSDC) engaged BJH to provide real property tax analysis, financial feasibility, and underwriting support for the Moynihan Station redevelopment project. Using its expertise in New York City tax and incentive policies, BJH was able to assist ESD / MSDC in negotiating the payment in lieu of tax (PILOT) structure in the State’s ground lease with the selected developer. Arriving at an appropriate PILOT structure required BJH to determine baseline market and assessed values for comparable properties, project the property taxes that would be due from the repositioned asset, and advise on available incentives and current tax policy in the geography. ESD / MSDC used BJH’s work in support of a successful effort to obtain a Transportation Infrastructure Finance and Innovation Act(TIFIA) loan from the U.S. Department of Transportation. BJH prepared and presented materials on project economics and estimated PILOT revenues to rating agencies, including stress testing for downside scenarios.
BJH completed a series of benefit cost analyses regarding the implementation of an integrated flood protection solution in Red Hook, Brooklyn. The proposed flood protection could stretch up to three miles around the waterfront neighborhood’s perimeter, providing protection to the thousands of residents that were severely affected by Super Storm Sandy. The analysis considered avoided damages from property structures and contents, as well as displacement, loss of work, and public service losses. It also quantified other social and economic benefits of the project. BJH then calculated the overall benefit cost ratios per FEMA methodology for multiple flood protection alignments to be submitted as part of the City’s HMGP application. A brochure summarizing the findings of the study can be viewed here.
The principals of BJH have worked on various aspects of the Hudson Yards redevelopment project since 2002.
In 2017 BJH provided analysis of current and potential future development in the district as a sub-consultant to a national real estate firm for a feasibility study in support of the successful refinance of $2.1 billion of bonds issued by Hudson Yards Infrastructure Corporation. Services included demand analysis and tax and alternative revenue source estimation.
In 2015 BJH prepared a development analysis and revenue projection report of the district for an investment bank. The study included a survey of residential, hotel, office and retail buildings completed, in construction and planned in the district, and estimation of current and future real property tax revenues, PILOT payments, and zoning bonus payments.
BJH worked as an advisor to Civic Builders in the early conceptual design of a new program, the Building Equity Initiative, an innovative approach to financing charter school construction. Traditionally, charter schools have had difficulty accessing standard financial products and capital due to a lack of expertise (school management focused on quality education, not financial markets and construction) or equity (funding based on per pupil allocations and donations, not capital needs). This program supports a loan pool of standardized transactions, allowing for faster execution, lower borrowing costs, and greater access to capital for both established and emerging schools.
BJH provided strategy and analysis around the structure of the program, both financially and operationally. The team reviewed current financial market conditions for short and long term products, identifying the largest gaps in the market, and participated in interviews with potential lenders and borrowers, summarizing findings for funder presentations. BJH also vetted issues related to program operations, advising on board structure, compliance and risk management tools.
BJH, working with a talented team of design and construction professionals, created the lowest-cost proposal in the Port Authority of New York and New Jersey’s (PANYNJ) 2016 Midtown Bus Terminal Design Competition. BJH’s main task on the team was to identify a potential receiver district to land unused air rights from the surrounding PANYNJ properties and to model potential real estate revenues streams that could help pay for the construction of the new terminal. BJH’s approach takes into account the complicated construction phasing and existing conditions in the neighborhood, careful to protect community facilities and historic properties. The team’s proposal reshapes the public realm surrounding the PANYNJ bus terminal, adding significant new open space and connecting the improvements already underway at Hudson Yards, the High Line, and the Javits Center.
BJH was retained by the Friends of the BQX, a group led by property owners and business interests along the Brooklyn-Queens waterfront, to study the financial feasibility and determine optimal financial structuring for a new streetcar that would stretch from Astoria, Queens to Sunset Park, Brooklyn. BJH estimated development scale along the 11 neighborhoods in the corridor and applied the concept of “transit premiums” to real estate values and development pace. The computed value was then compared to the cost of the system. BJH’s work was presented to the City of New York, who subsequently hired BJH as part of the initial team to test design, engineering and financial/economic feasibilities.
In coordination with Mayor de Blasio’s ten-year affordable housing plan, the Department of Housing Preservation and Development, the Department of City Planning, and the Housing Development Corporation undertook a study of the effects of various a mandatory inclusionary housing (MIH) program structures in various neighborhoods. BJH was the key New York City subconsultant to the prime consultant – BAE Urban Economics – a California based specialist in MIH programming. The consultants examined structures requiring residential developments in the targeted areas to include a certain percent of affordable units. Analysis included the creation of an index for each neighborhood in the New York based on market conditions, a thorough investigation of development costs for a variety of multi-family housing prototypes, and the creation of a dynamic pro forma that included variability across markets and tax policy outcomes.
Prior to Mayor de Blasio’s commitment to expanding ferry service in New York City, BJH Advisors provided the New York City Economic Development Corporation (NYCEDC) with analysis of funding opportunities for launching and operating new ferry service. Our analysis explored the universe of capital and operating funding sources for transportation projects in the United States and abroad, including value capture, taxation, and other funding strategies such as sponsorship. BJH Advisors built a model to evaluate the potential for each funding source to successfully fund ferry expansion in New York City based on the structure of the funding source and the goals of ferry expansion and provided NYCEDC with recommendations for implementation in New York City based on case studies and tax policy analysis. Link to the report here.