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Big Building Plans Raise Big Questions
When state Assembly Speaker Sheldon Silver (D-Manhattan) gave the final state sign-off to Brooklyn’s Atlantic Yards development in the waning days of December, one controversial mega-project came off of new Gov. Eliot Spitzer’s (D) desk. Yet the new governor still must decide the shape of a host of other major infrastructure projects that are in the works—and perhaps more vexingly, figure out how to pay for them.
The End of the PACB?
In his State of the State address, Spitzer singled out the Second Avenue subway and East Side Access as downstate priorities, alongside such projects as the expansion of Stewart Airport in Orange County and building a replacement for the 50-year-old Tappan Zee Bridge.
Gov. Eliot Spitzer (D) declared that he is out to “transform” state government. One big question is what that means for the state’s public authorities.
While the governor’s State of the State address singled out authorities as “entrenched in the status quo and insulated from accountability,” it is less clear what shape any reform might take.
One anticipated target for change is the Public Authorities Control Board (PACB), the three-member oversight body that was thrust into the spotlight when Assembly Speaker Sheldon Silver (D-Manhattan) used it to block Mayor Michael Bloomberg’s (R) plan to put a stadium for the Jets on Manhattan’s far West Side as the centerpiece of the 2012 Olympic bid. With the governor, Assembly speaker and State Senate majority leader as the only voting members, the PACB is widely seen as exemplifying the state’s much-attacked “three men in a room” governing tradition.
That is how Bloomberg put it in his January State of the City address.
“Let’s work with our partners in Albany to abolish the anti-democratic Public Authorities Control Board,” he exhorted the crowd. “Government by three men in a room has turned New York State into a national symbol of government dysfunction.”
Yet as Manhattan Borough President Scott Stringer (D) notes, three men are at least better than none.
“There’s plenty of things you could do to improve the way the PACB operates,” he said. “But at the moment it’s the only check there is against the power of public authorities.”
Even if the PACB is left in place, one possible scenario would be for Alan Hevesi’s replacement as state comptroller to begin using more of that position’s power to audit the board’s decisions—especially if the job goes to Assembly Member Richard Brodsky (D-Westchester), who as chair of the Committee on Corporations, Authorities and Commissions has long been Albany’s top authorities watchdog.
Spitzer could also revive the independent oversight agency that was supposed to have been set up by legislation passed in 2005, but which was held up by former Gov. George Pataki (R).
Spitzer has earned generally high marks for appointing actual experts (albeit well-connected ones) to run state authorities. Patrick Foye, the new downstate head of the Empire State Development Corporation (Spitzer has split the operation into upstate and downstate divisions), is a Conservative Party bigwig who previously ran the United Way of Long Island, rather than a top fundraiser for the gubernatorial campaign.
At the Metropolitan Transportation Authority, new Executive Director and CEO Elliot “Lee” Sander founded both the Empire State Transportation Alliance and NYU’s Rudin Center for Transportation Policy & Management. He also ran the city Department of Transportation for Mayor Rudolph Giuliani (R).
In 2001, Sander joined four other former transportation commissioners in calling for a long list of transit improvements, including a re-instituted commuter tax with the proceeds dedicated to transportation, and a cross-harbor rail tunnel.
Neither of those projects has yet appeared on the public Spitzer agenda.
“The state is a very powerful public partner. It can override local zoning, it can do anything it wants,” observed Municipal Art Society President Kent Barwick. “So it’s been a good tool for developers, but it hasn’t been a very vigorous or attentive partner in these public-private partnerships.” — Neil DeMause
While the East Side Access project, which would allow LIRR trains into Grand Central, is largely in place, the Second Avenue subway has barely gotten out of the starting blocks after decades of planning. First conceived in 1929, the Second Avenue line was supposed to take up the passenger load of the Second and Third Avenue elevated trains when they were demolished in the 1940s and ‘50s.
Instead, digging for the new line had barely begun before the 1970s fiscal crisis left the city with nothing but a few stretches of empty tunnel in East Harlem. The number of riders on the Lexington Avenue IRT, meanwhile, has soared to unmanageable levels, with 30 percent of all subway riders now riding the 4, 5, or 6 line every day.
Enough MTA bonds and federal funds have been pieced together to break ground on the first section of the Second Avenue line, a spur running north from 63rd Street to 96th Street that would allow Q trains to bring Upper East Siders to and from Lower Manhattan. Funding for the rest of the $17 billion project, though, remains a mystery.
“The whole thing is $17 billion, a number so large as to make you go back into bed and curl up into a fetal position,” said Gene Russianoff of the Straphangers Campaign, who served on Spitzer’s transportation issues transition team. “We’re supporters of Second Avenue, we always have been. But there’s also a compelling case that we not do what London did, which was while they built the new Jubilee Line, they let the Underground rot.”
Replacing tracks and signals may have “less ribbon-cutting” to them, says Russianoff, but are just as vital to city commuters.
Waiting in the wings for the new governor, meanwhile, is the mega-project likely to dwarf all others in terms of controversy: Moynihan Station, the plan to renovate the Farley Post Office building on Eighth Avenue to provide a new grand entrance for Penn Station. Though Silver used his role on the Public Authorities Control Board to stall the project last fall, Gov. George Pataki spent the last few days of his administration pushing for the project. Most observers agree that Spitzer will re-launch the project now that he is in charge.
The new vision for Moynihan Station is likely to include the proposal to relocate Madison Square Garden to a new facility in the Farley Annex on the Ninth Avenue end of the post office block, freeing up the existing Garden site for office towers and a new above-ground Penn Station entrance on the east side of Eighth Avenue. This plan was first floated early last year but never made it into the original planning documents. It has drawn harsh criticism from some preservationists worried that a new sports arena will tower over the historic Farley building, squeezing out much of the public atrium that was planned for the block.
Other Moynihan advocates, though, say that the growth of rail travel, coupled with plans for the new Hudson Yards office district on the Far West Side, make a larger project a necessity.
“If you tore down Madison Square Garden and took the entire block and made it into a new Penn Station, it would not be big enough for the level of rail traffic that we have today,” said Municipal Art Society President Kent Barwick. “And this is before we create a city of 40 million commercial square feet west of Moynihan. So you need both spaces.”
Other big local projects on Spitzer’s plate include the long-delayed redevelopment of Governors Island, and the Javits Convention Center expansion, which is already facing a half-billion-dollar budget hole.
The Empire State Development Corporation (ESDC) is also slated to use its eminent-domain powers to clear the way for Columbia University’s controversial expansion to the Harlem waterfront. Furthermore, in his State of State speech, Spitzer indicated he would direct more state development funds to “those neighborhoods and communities that have been overlooked in years past,” a hint that the ESDC may direct increased attention to smaller projects in addition to the big-bang ones that have been its forte.
How all this would be paid for is anyone’s guess. Steel, fuel, and labor costs are already through the roof, thanks in part to post-Katrina rebuilding along the Gulf Coast and Beijing’s massive construction efforts in advance of the 2008 Olympics. Having a flood of new construction hit New York all at once is only expected to make matters worse.
One concern expressed by development experts is that with Spitzer’s administration trying to move ahead on so many fronts at once, private financiers will end up driving the state development priorities. The Tappan Zee Bridge project in particular appears to have leapt to the top of Spitzer’s agenda thanks in part to its financing scheme: a so-called “public-private partnership” in which a private developer would commit capital to the project and own the new bridge in exchange for receiving toll revenues.
This would not only cut the state’s up-front bond costs, but also enable the private partner to gain tax benefits by depreciating the bridge over its lifespan. Since the state does not pay taxes, it cannot take advantage of this, which would mean effectively allowing hundreds of millions of dollars of costs to be pushed onto the federal treasury.
Even aside from the ethics of using tax shelters to finance the state’s capital plan, some good-government types wonder if prioritizing development projects based on how well they can lure private backing is best for New York residents.
But, some say, there are problems to guard against no matter how the projects come to life.
“With budget constraints and the governor’s commitment to cutting state spending,” warned Dan Steinberg of the development-watch group Good Jobs New York, “it’s important to make sure that public policy isn’t dictated by the agenda of private parties.”