Public Building Service; Record of Decision, Proposed Disposal of Governors Island, New York Harbor, New York, NY

GENERAL SERVICES ADMINISTRATION

Public Building Service; Record of Decision, Proposed Disposal of

Governors Island, New York Harbor, New York, NY

I. Introduction

The United States General Services Administration (GSA) announces

its decision, in accordance with the National Environmental Policy Act

of 1969, as amended (NEPA), and the regulations issued by the Council

on Environmental Quality (40 CFR Parts 1500-1508), for the proposed

disposal of federally-owned real property known as Governors Island,

New York Harbor, New York, New York. The purpose of this Record of

Decision (ROD) is to clearly communicate GSA's decision on implementing

the Preferred Alternative identified in the Final Environmental Impact

Statement dated November 4, 1998 (the FEIS) and the basis for that

decision, and to identify any mitigation measures to be implemented as

part of that decision. This ROD describes the alternatives considered

and the rationale for selecting the chosen alternative and documents my

decision regarding this proposal.

Public scoping meetings for the Draft Environmental Impact

Statement (the DEIS) were held on December 16 and 17, 1997. The period

for comments on the proposed disposal action was open from December 1,

1997 and ended on January 19, 1998. GSA released the DEIS for a 45-day

public comment period on June 5, 1998. Public hearings were held during

the comment period on June 24 and 25, 1998. The FEIS was released for a

30-day public comment period which closed on December 14, 1998. GSA

provided written Notices of Availability for these documents in the

Federal Register, local newspapers and direct mailings to interested

parties.

The purpose and need for the proposed action is for GSA to comply with

a legislative directive with respect to approximately 172 acres of

Federally-owned property known as Governors Island, New York, as

provided in the Balanced Budget Act of 1997 (Item 373:[17], Sec. 9101)

as signed by President Clinton, described below:

(a) In General--Notwithstanding any other provision of law, the

administrator of General Services shall, no earlier than fiscal year

2002, dispose of by sale at fair market value all rights, title, and

interests of the United States in and to the land of, and

improvements to, Governors Island, New York.

(b) Right of First Offer--Before a sale is made under subsection

(a) to any other parties, the State of New York and the City of New

York shall be given the right of first offer to purchase all or part

at fair market value as determined by the Administrator of General

Services, such right may be exercised by either the State of New

York or the City of New York or by both the parties acting jointly.

(c) Proceeds--Proceeds from the disposal of Governors Island

under subsection (a) shall be deposited in the general fund of the

Treasury and credited as miscellaneous receipts.

In accordance with NEPA, GSA disclosed information concerning the

potential environmental effects associated with the disposition of this

property. GSA examined a range of reasonably foreseeable land use

options that might be implemented on the island by another party after

disposal. GSA has no authority to implement a reuse on Governors

Island. Potential future reuses on Governors Island would be subject to

their own environmental and land use review

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processes upon implementation. The ultimate reuse scheme for the island

will be determined by the future owners and will be subject to all

applicable Federal, State and local regulations.

II. Alternatives Considered

Through the environmental review process, GSA identified a

preferred alternative, the Action Alternative (disposition of Governors

Island), as well as the No Action Alternative (retention of Governors

Island). In conjunction with the disposition alternative, and in order

to disclose any potential impacts and/or benefits that could result

from the island's reuse by a party other than GSA after disposition, a

number of potential Land Use Options were reviewed for Governors

Island. These options were developed during the preparation of the

Governors Island Land Use Study, commissioned by GSA. The land use

options are illustrative of a range of reasonably foreseeable reuses

that might be implemented on the island by another party or parties.

The options were developed based on a year-long effort that included

input from local, State and Federal agencies as well as the public at

large. The options are not reflective of any GSA plans for the future

of the island. The land use options encompass what GSA believes to be a

range of reasonable and likely land uses, given the island's

opportunities and constraints. Before the implementation of any future

reuse of the island the sponsoring party would need to comply with all

of the applicable local, State, and Federal laws and regulations. This

may include the preparation of a project-specific Environmental

Assessment or Environmental Impact Statement and the provision of a

specific mitigation plan.

A. No Action Alternative

The No-Action Alternative assumes that the island is not disposed

of by GSA after the fiscal year (FY) 2002. Under this alternative, the

Federal government would retain ownership of Governors Island. The

annual appropriation of monies for the on-island caretaking effort are

assumed to continue.

B. Action Alternative

The Action Alternative involves the disposition of Governors Island

by GSA. As directed by the Balanced Budget Act of 1997, GSA has been

limited to two distinct means by which to dispose of Governors Island;

disposition to New York State or New York City for fair market value;

and, disposition to another or entities for fair market value.

Because of GSA's mandate under the Balanced Budget Act to dispose

of the island to another party, as well as GSA's inability to specify

or control the land uses that may be developed on disposed property in

the future, a precise statement of the specific land use-related

environmental and socioeconomic effects that could result from reuse

would be largely hypothetical. In response to the lack of certainty

concerning a future reuse for the island, GSA has developed a range of

reasonably foreseeable land use options that might result upon

disposition of the island. These land use options were developed

through a planning effort undertaken by the United States Coast Guard

(USCG) and GSA, with input from New York State and New York City

officials as well as the public, which culminated in the Governors

Island Land Use Study.

The specific purpose of the land use options was to describe a

range of reasonable uses that could be implemented on the Island upon

disposition. The FEIS generically disclosed the potential impacts

pertaining to the short and long term, direct and indirect, beneficial

and adverse significant regional cumulative impacts associated with

these land use options.

This analysis was provided in order to explore the issues

associated with the reuse of the island by a party other than GSA. GSA

has no intention of implementing any of the Land Use Options. The

potential land use options that resulted from the Governors Island Land

Use Study analyzed in conjunction with the Action Alternative,

disposition of Governors Island, are as follows:

1. Reuse Option. This option reuses as many buildings as is

feasible, while expanding open space. There is a strong residential

focus.

2A. Academic Option. This option assumes use of the Island by an

academic institution of approximately 4,000 students. There is a large

open and recreational space component.

2B. Academic Option with New York City Proposal for a Casino. This

option is similar to the Academic Option, with the inclusion of a

gambling casino and its necessary ancillary facilities. Review of this

option was requested by New York City during the environmental scoping

period.

3. Recreation Option. This option's predominant use is a 70-acre

public park. Some residential units and a conference center are also

included.

4. Mixed Use Option. This option strikes a balance between new

development and a public park. Major components of this option include

a 42-acre park and approximately 2,400 housing units.

5. Maximum Development Option. This option features the highest

residential density (4,450 units in apartments and townhouses) of all

the land use options. It also includes a 20-acre park, hotel, golf

course and retail uses.

6. Phase-In Option. This option is intended for transitional use of

existing facilities prior to implementation of any of the land use

options. Residential and hotel or hostel use is emphasized.

The FEIS provides a narrative description and a tabular summary of

the potential environmental consequences of each of the land use

options. Recommended mitigation for any adverse environmental

consequences is also set forth in the narrative description and tabular

summary. GSA itself has no intention of implementing any of the land

use options, and only intends to transfer the property to another party

who would determine the island's ultimate land use. Mitigation for any

future adverse impacts identified in association with the land use

options or other specific development plans would be the responsibility

of the future owner of Governors Island. A specific development plan

for the island would be subject to Federal, State and local regulations

that would ensure proper mitigation of adverse impacts associated with

any future development.

III. Decision

Based upon review of the written materials associated with the

environmental review process, including the transcripts of the scoping

and public hearings and the comments received from those who reviewed

the DEIS and FEIS, I have decided to proceed with the disposal of

Governors Island under the Action Alternative as summarized above. This

ROD is in keeping with the statutory mission of GSA to dispose of

Federally-owned real property, as well as the Balanced Budget Act of

1997 that mandates disposal of Governor Island. My decision is based on

the following factors:

A. On October 16, 1995, the USCG announced that it would close

Governors Island by the end of Summer 1997. This decision was made in

response to the Presidential mandate to meet the goals of the National

Performance and Results Act, and the challenge of reducing the Federal

budget deficit. The USCG developed a five-part Integrated Business

Decision Package, of which closing Support

[[Page 6091]]

Center New York on Governors Island was a key element.

An Environmental Assessment (EA) was prepared under the guidance of

Coast Guard direction COMDTINST M16475.1B (Final Environmental

Assessment for the Closure of Support Center New York, Governors

Island, May 1995), pursuant to NEPA. This EA evaluated the closure of

Governors Island for potential environmental impacts. The EA concluded

that no significant environmental impacts would result from the closure

of Governors Island and relocation of USCG commands under the preferred

alternative of standard maintenance.

B. Governors Island is subject to special legislation incorporated

as part of the Balanced Budget Act of 1997 (Item 373:[17], Sec. 9101),

as signed by President Clinton. The act directs GSA to dispose of

Governors Island at fair market value no earlier than FY 2002. The

State and city of New York have the right of first offer to purchase

all or part of the island at fair market value. Disposition of the

island under the Action Alternative is in compliance with this

legislation.

C. Since closure of the USCG facility, the island and its

structures have been maintained by a caretaker detachment of Federal

and contract personnel at an approximate annual cost of $6 million in

FY 1998 and $7 million in FY 1999, respectively. The responsibility of

continuing maintenance of Governors Island would be transferred to the

owner of the island upon disposition, thus alleviating the Federal

Government of the annual expenditure for maintenance of the island.

D. The island is acknowledged to contain resources of historic

merit. In fulfillment of its consultation responsibilities under

Section 106 of the National Historic Preservation Act, GSA was a

signatory to a Programmatic Agreement between the USCG, the Advisory

Council on Historic Preservation, the New York State Historic

Preservation Officer, the city of New York, and the National Trust for

Historic Preservation. This agreement provides for the preservation of

the Governors Island National Historic Landmark District (GINHL) and

continuing covenants which will be binding upon the new owner of the

property. GSA is presently preparing the Governors Island Preservation

and Design Manual, which will become the governing document for all

future preservation and maintenance activities within the GINHL. The

obligation for adherence to the provisions of this document will be

transferred along with the island's title upon disposition. This

guarantees the future preservation of the GINHL after disposition.

E. Disposal of Governors Island by GSA does not have any direct

effect on the physical, biological or manmade environment. Any future

reuse of the island would need to comply with any and all Federal,

State, and local regulations. If there were project-specific impacts at

that time, they would need to be disclosed and mitigated by the future

owner of the island.

F. The USCG is currently completing all environmental closure and

clean-up operations in compliance with Federal, State and local

regulatory standards prior to disposal of the island. Full remediation

will have occurred by the time of transfer of the island, or the USCG

will continue such remediation after transfer as necessary.

G. The FEIS provided recommended mitigation for any adverse

environmental impacts identified in association with the land use

options. However, mitigation for any such adverse environmental impacts

would be the responsibility of the future owner of Governors Island. A

specific development plan for the island would be subject to Federal,

State and local regulations that would ensure proper mitigation of any

associated impacts.

IV. Environmentally Preferred Alternative

As required by NEPA, a lead agency must identify its

environmentally preferred alternative. The environmentally preferred

alternative is the alternative which best satisfies and promotes the

national environmental policies incorporated in Section 101 of NEPA.

The Action Alternative, disposition of Governors Island, is both the

preferred and the environmentally preferred alternative. By disposing

of Governors Island to another party, the Balanced Budget Act would be

adhered to, the property could begin to generate tax revenue (if

disposed of to a private entity) that might offset any maintenance

costs associated with the island, and the public could potentially gain

access to this previously secured facility. Disposal will also allow

for reuse of the GINHL in compliance with the Programmatic Agreement

and the Governors Island Preservation and Design Manual, ensuring the

appropriate maintenance and preservation of this resource. Disposal of

Governors Island would not have any direct adverse effect on the

physical, biological, or man-made environment, but rather beneficial

impacts could be realized as cited above. Any specific development plan

for the island would be subject to Federal, State and local regulations

that would ensure proper mitigation of any associated impacts.

V. Environmental Impacts and Mitigation Measures

In terms of environmental harm and degradation, the Action

Alternative, disposition of Governors Island, would have minimal or no

adverse impacts to physical and natural resources, biological

resources, and man-made or socioeconomic characteristics. All practical

means to alleviate, minimize and/or compensate environmental harm were

considered.

Under the first scenario of the Action Alternative, Governors

Island would be disposed of to New York State or New York City (NYS

and/or NYC) for fair market value no earlier than FY 2002. The

responsibility of continued preservation and maintenance of the

National Register Landmark District would be transferred to NYS and/or

NYC along with the island's title. Generally, properties owned by NYS

or NYC do not generate tax revenue. Under this Action Alternative

scenario, the change in public ownership would not necessarily

constitute an increase in tax revenue for the city or state. The

possibility does exist, however, that NYS and/or NYC would create an

arrangement on the island where some land uses would be privately

sponsored and would pay taxes. Similarly, if the island is disposed of

to NYS and/or NYC the burden of providing services on the island would

fall to local government. Transfer of the island to NYS and/or NYC

could enable public access to a portion of the city previously

unavailable to visitors and possibly create additional open space for

the city. It is not anticipated that the addition of Governors Island

to the NYC real estate market would adversely affect prices for

comparable properties, as the current real estate market is strong and

Governors Island possesses unique characteristics (size, location,

existing facilities). Under the Action Alternative, the sale of

Governors Island for fair market value would result in the Federal

government realizing a monetary gain. Additionally, the Federal

government's responsibility for caretaking on the island would cease

and the annual recurring expense for caretaking would end. Disposal of

Governors Island to NYS and/or NYC does not have any direct effect on

the physical, biological or man-made environment. Any future

development of the island by NYS and/or NYC would be subject to all

applicable Federal, State, and local regulations.

[[Page 6092]]

Under the second scenario associated with the Action Alternative,

Governors Island would be disposed of to an entity other than NYS and/

or NYC for fair market value. The continued preservation and

maintenance of the GINHL district would be an obligation transferred

along with the island's title. Disposition to an entity other than NYS

and/or NYC under the Action Alternative could be beneficial in terms of

the creation of new tax ratables within NYC. Additionally, if profit-

generating uses occur on the island, these uses would generate sales or

corporate taxes, which would accrue to NYS and/or NYC. Provision of

police, fire and other municipal services to Governors Island would be

necessary, the cost of which could be offset to some degree by taxes.

The possibility exists that the island could be disposed of to a not-

for-profit institution at fair market value, or some combination of

not-for-profit entity. In this case the not-for-profit institution

would be exempt from paying taxes. This could result in a burden to

local services without commensurate tax relief. A Payment in Lieu of

Taxes (PILOT) could offset this burden. Under this scenario, the

Federal Government would realize the financial gains generated from

sale of the island, as well as the annual savings of the costs

associated with maintaining the island. Disposal of Governors Island to

an entity or entities other than NYS and/or NYC does not have any

direct effect on the physical, biological or man-made environment. Any

future development of the island by the new owner would be subject to

all applicable Federal, State, and local regulations.

VI. Supporting Information

GSA has received a limited number of comments concerning the FEIS.

Upon review of these comments, I am satisfied that they have already

been sufficiently addressed in both the DEIS and FEIS. In support of

this, GSA has received notification from the Environmental Protection

Agency (EPA) that ``In light of the covenants that will be set forth in

the transfer deed, we have concluded that the proposed project would

not result in significant adverse environmental impacts; therefore, EPA

has not objections to the implementation of the proposed project''.

The Port Authority of the State of New York and New Jersey has

requested that in reference to the Hazardous Materials Sections of the

``Re-Use Options'', GSA ``forbear from characterization of dredged

material absent actual sampling and testing''. The FEIS disclosed that

if dredging were determined to be necessary adjacent to the island in

connection with the construction of docks or piers, ``and the spoil is

contaminated, or is ocean-dumped, this may constitute an impact under

Section 103 of the Marine Protection, Research, and Sanctuaries Act''

(Governors Island Disposition FEIS, November 1998, pp. IV.E-9, IV.R-52,

IV.E-90, IV.E-109, IV.E-131). Because of the conceptual nature of the

land use options, it is not clear if dredging is actually necessary.

GSA did not intend to indicate that spoil material is contaminated,

rather that if the spoil were contaminated the potential for impact

could exist. In order to determine the nature of any spoil material

associated with dredging activities an actual sampling and testing

program would need to be undertaken.

The Port Authority also indicated that the * * * disposition to New

York City or New York State is preferable to a private disposition and

should be evaluated as such in the decision-making process.'' As

indicated earlier, GSA has undertaken the disposition of Governors

Island as directed by the Balanced Budget Act of 1997. While the

Balanced Budget Act does provide the city and State of New York with

the right of first offer (at fair market value), it does not designate

a preference as to the purchaser of the island. In keeping with the

directive offered in this Act, GSA has employed a similar two-tiered

approach to the environmental review of the disposition of the island.

The potential benefits and impacts associated with disposition to New

York City and/or New York State as well as to a private/institutional

party have been fully disclosed in the FEIS. The selection of the

disposition alternative as the preferred alternative does not indicate

a preference as to the purchaser of the island yet it still allows the

State and or city of New York the right of first offer. I believe that

sufficient background information concerning the effects of disposition

to a public or private entity has been provided to the appropriate

parties in the decision-making process.

Finally, a letter received from the Regional Plan Association (RPA)

indicates that ``[t]he DEIS does not adequately examine the

consequences of its action alternatives''. I disagree with this

assessment and am confident that the analysis of the action alternative

has been conducted and the impacts and benefits disclosed as required

by NEPA. As I indicated above, GSA has disclosed the impacts and

benefits associated with the disposition of the island to either New

York City/New York State or another entity. Additionally, in

conjunction with the action alternative, GSA has identified and

analyzed a range of reasonably foreseeable reuse options that could

occur on the island. In total, GSA has provided a sufficient level of

review of the consequences associated with the disposition of the

island.

VII. Conclusion

Environmental and other relevant concerns presented by interested

agencies and private citizens have been fully addressed within the

FEIS. GSA believes there are no outstanding environmental issues to be

resolved with respect to the proposed project which are within the

mission capabilities of this agency.

After consulting with GSA staff, reviewing the FEIS and all of its

related materials, it is my decision GSA will proceed with the disposal

of Federally-owned real property known as Governors Island, New York

Harbor, New York.

Dated: January 27, 1999.

Robert W. Martin,

Acting Regional Administrator.

[FR Doc. 99-2722 Filed 2-5-99; 8:45 am]

BILLING CODE 6820-23-M