[Federal Register Volume 64, Number 25 (Monday, February 8, 1999)]
[Notices]
[Pages 6089-6092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2722]


=======================================================================
-----------------------------------------------------------------------

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

[[Page 6090]]

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