Valuing Central Park's Contributions to New York City, May 2009

In May, the Central Park Conservancy released a report on Central Park's impact on the economy of New York City. The report, which was prepared by Appleseed, highlights the multiple ways in which the Park contributes to the City's economic vitality – as a major enterprise in itself; as a magnet for visitors, a location for film and TV production and a venue for major events; as a resource for New York City residents; and through its impact on property values and City tax revenues.

Most of the research and analysis presented in the report was completed in 2008, before New York City began to feel the full impact of the current recession. Some of the details of our analysis would of course be different if we had been using 2009 data. Retail and office rents in the area around the Park have declined, for example, and a sharp slowdown in the sale of apartments and commercial properties has meant less revenue from real property transfer taxes.

On the other hand, because changes on taxable assessed values always lag behind changes in real market values (both on the way up and on the way down), the real property tax revenues that the City derives from properties near the Park (and in effect, from the Park itself) are actually higher in 2009 than they were in 2007.

In other ways as well, Central Park's contribution to the City's economy is probably even more important today than it was at the height of the boom.

  • The single most critical factor in New York's economic recovery will be the City's continued ability to attract and hold talented people. With 843 acres of high-quality space for both active and passive recreation, cultural events and other activities, the Park makes the surrounding neighborhoods – and all of New York City – a more attractive place to live, work and do business.
  • Research by Richard Florida and others has highlighted the particular importance of easy access to opportunities for active outdoor recreation as a factor in young adults' decisions about where to live and work. Probably no other park in the U.S. provides so many people with such easy access to so many different types of recreation.
  • The opportunities for free or low-cost recreation that Central Park provides (and indeed, that all of the City's parks provide) are especially valuable at a time when many New Yorkers are out of work, or have seen their incomes decline, or are simply trying to spend less.
  • Since the fall of 2008, many of the forces that contributed to the escalation of Manhattan property values, and thus to the growth of City tax revenues, have receded – the "wealth effect," strong demand from foreign buyers, the easy availability of credit. But the "Central Park effect" – the added value associated with proximity to the Park – endures. The Park helps stabilize property values in the surrounding area – and thus City revenues.

Both the history of Central Park and our analysis of its contemporary impact suggest an important lesson that New York – and by extension, other cities – should keep in mind.

During municipal budget crises, there's a natural temptation to cut deeply into city spending on parks. The effects may not be immediately visible – and it's a lot easier politically than cutting cops or firemen. But as New York City learned to its sorrow in the 1970's, parks that are not adequately managed or maintained can turn very quickly from an asset to a liability. And it can take a long time (and in the long run cost a lot more money) to bring them back.

So where does the money to maintain the Park come from? We'll come back to that question in the next few weeks.