[NYtenants-online] Doctoroff Manipulates Transit Report; Gambit Backfires

[Tenant]

NYtenants Online/TenantNet                               12/23/03
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IN THIS ISSUE ...

1. Killing the Second Avenue Subway
2. Transit Priorities: the Real Estate View (Tri-State Transp. Campaign)
3. New [2nd Ave.] Subway Line a Winner (Newsday)
4. Press Release on 2nd Ave. Subway from Congresswoman Carolyn Maloney


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KILLING THE SECOND AVENUE SUBWAY
Real Estate Agenda designed for Displacment

IT STARTED just about two years ago. No, not the stadium idea. That's been 
around since 1993 when then Governor Mario Cuomo suggested the West Yards 
for Yankee Stadium.

But with the rise of the Bloomberg-Doctoroff Flu, the notion to bulldoze 
the entire West Side from 28th to 42nd Streets (phase I) for a new Central 
Business District of 45 million square feet of office space -- equivalent 
to 22 Empire State Buildings, a few forward thinkers realized that to build 
the No. 7 subway extension to the Javits Center at a cost now approaching 
$3 billion would severely tax the already strained capital resources of the 
MTA. It would also delay or kill such projects as the East Side Access 
(bringing the LIRR into Grand Central) or the long-delayed Second Avenue 
Subway (SAS).

In February of 2002, Gene Russianoff of Straphangers Campaign, in a Daily 
News Op-Ed, stated:

"New York's top transit priority has to be achieving the long-delayed 
promise of a Second Ave. subway, running from East Harlem to the Financial 
District ... It is essential to reviving lower Manhattan and relieving the 
misery of Bloomberg's fellow Lexington Ave. line riders..."

He also stated, "A No. 7 line extension also would compete with a Second 
Avenue line for scarce public funds ... The financing scheme for the No. 7 
extension requires massive development on the far West Side and faces 
legitimate community concerns, while a Second Ave. line enjoys broad support."


EVEN BEFORE 9-11, there was a lengthy laundry list of major transportation 
projects being advocated. Few of these enjoyed, or even could expect, major 
funding. Combined, the price tag would be more than $60 billion. Even 
today, there is no consensus as to which projects deserve priority of 
funding and resources.

The East Side Access and the Second Avenue Subway could be a shot in the 
arm for downtown recovery. But now, putting them on the back burner, Mayor 
Bloomberg and Dan Doctoroff are pushing the No. 7 line ... with no 
financing sources, few potential riders, and substantial community opposition.

The extension of the No. 7 line is key to Doctoroff's plans for a stadium 
and Central Business District. He knows it and we know it. Without the 
subway the West Side might enjoy some normal development more in line with 
the scale and needs of the communities. With the subway, you could probably 
see 45 million square feet of office towers walling off Clinton and Chelsea.

According to Doctoroff, the financing for the No. 7 extension would depend 
on real estate taxes expected from the new development, the infamous 
Tax-Increment Financing (TIF). Since last year, after being shot down by a 
host of experts, the plan has morphed into a mixture of TIF and PILOT 
(Payment in Lieu of Taxes). By definition, Pilot only works with tax-exempt 
property, so the scheme now involves massive use of condemnation (Eminent 
Domain) throughout large swaths of the West Side.

Even more recently they are promoting an idea called Uniform Tax Exempt 
Policy (UTEP), which is TIF, PILOT, Air Rights, District Improvement 
Funds/DIF (which allows developers to literally purchase additional bulk 
from the city) and other such nonsense.

Many consider TIF/Pilot financing a diversion and shift of available taxes. 
What normally would accrue to the city's treasury would be diverted for the 
subway, forcing taxpayers in other boroughs to make up for the loss of the 
West Side tax base. While it's really a simple concept, such tax burden 
shifts are rarely, if ever, articulated in the press.

But many question, even with all this smoke and mirrors, if the numbers are 
realistic. What happens if the development does not occur on the scale and 
timeline promised by Doctoroff? How many office towers would be built on 
the West Side when 10 million SF of office space are being built downtown 
at the WTC site? Who would be left holding the bag for the outstanding 
bonds used to pay for the subway? (Answer: NYC taxpayers).

While Doctoroff is quick to cite anticipated office space need, the only 
study suggesting this "need" was done in the midst of the dotcom bubble, at 
the behest of Dan Doctoroff and has been subsequently dismissed for not 
considering historical real estate trends, market realities, and not 
looking at effects on other areas. Many of these Demand Studies are written 
in a vacuum by the development industry, and are intended to provide some 
sort of justification for their agenda. Not only are the conclusions 
questionable, but the underlying assumptions are suspect.

So there are fair arguments that no matter how you look at it, the 
financing for the No. 7 line would be at the expense of other priorities, 
including other transit capital projects. Moreover, it's not just the 
capital costs of construction. It also involves operating costs, the cost 
of scarce MTA resources, management attention, focus and even spreading 
construction crews out across various projects.

THE NYCP "REPORT"

The New York City Partnership (NYCP), a group of developers masquerading as 
a Chamber of Commerce, of which Dan Doctoroff is a member, knows all this. 
Which explains why they recently released a report calling for the Second 
Avenue Subway to be put on the back burner and the No. 7 be made the 
priority. The report purported to consider the economic bang-for-the-buck 
in recommending transit priorities (and their analysis was based on dubious 
Demand forecasts). The report also failed to analyze or consider many other 
criteria normally associated with transit priorities (see report from 
Tri-State Transportation Campaign below).

But City Hall sources tell us that the NYCP report was intentionally 
"manipulated" and "sanitized" by Dan Doctoroff to reflect a priority for 
the #7 line, which of course would support his Olympics/Jets stadium and 
plan to bulldoze much of the West Side. Overall, the NYCP report seems 
politically designed to advance various development agendas rather than a 
serious inquiry of realistic transit capital priorities.

It would be safe to say that the NYCP report ruffled more than a few 
feathers. The notion of scaling back and/or re-thinking the Second Avenue 
Subway, which has already been partially funded, has a demonstrated need 
and wide civic and political support, was unacceptable to many.

On December 13, Assembly Speaker Sheldon Silver wrote in the NY Post that 
the SAS was necessary as a connection to the East Side Access project (that 
itself would dump 175,000 LIRR commuters into Grand Central Station), 
saying those commuters will need to get downtown and the Lexington line is 
already over capacity.


THEN LAST FRIDAY, a news conference was held at City Hall with East Side 
Congresswoman Carolyn Maloney, Congressman Charles Rangel, Speaker Silver, 
Council Speaker Gif Miller, and a long list of other politicians, transit 
and community activists.

They disputed the findings of the NYCP report and reaffirmed their support 
of the Second Ave. Subway project. They did not publicly disavow the No. 7 
line project; they did not need to do that as the criticism was implicit. 
According to them, and their counter-report from the Regional Plan 
Association, the SAS should be the number one transit priority.

It's a matter of commitment. If the MTA only commits now to the "stubway" 
(building the northern portion of the SAS first and then shunting it over 
to the N & R lines to complete the trip downtown, then the likelihood of 
the southern portion of the SAS ever being completed is questionable.

What became clear was that the NYCP report backfired on Doctoroff and his 
gang in that it admitted what everyone else seemed to know: You can have 
either the Second Avenue Subway OR you can have the No. 7 extension. You 
can't have both.

NewYorkGames.org stated, "by having their allies in the Partnership push 
the No. 7 extension at the expense of the much more popular Second Avenue 
Subway, the mayor's office has committed an enormous tactical blunder..." 
and "the mayor's office has said the two projects have no relation to one 
another, but the Partnership study has undermined that argument."

FOOTNOTE:

NYC2012 is relying on the No. 7 project to leverage approval for their 
entire West Side agenda before the International Olympic Committee even 
votes in 2005. But it must be noted that the No. 7 subway is expected to be 
closed for the two weeks of the Olympic games for security purposes.

REPORTS

Benefits of the Second Avenue Subway--Summary (1 page PDF)
Regional Plan Association
http://www.rpa.org/pdf/SASjustthebullets.pdf


Statement regarding the NYC Partnership report (PDF)
Regional Plan Association
http://www.rpa.org/pdf/PartnershipOnePager.pdf


Economic Benefits of the Second Avenue Subway
Full Report (PDF)
Regional Plan Association
http://www.rpa.org/pdf/2ndAvenue.pdf


Economic Impact Assessment for Big Ticket Transit Projects
NYC Partnership
Press Release
http://www.nycp.org/pr/TransportationStudyRelease.pdf

Transportation Choices/NYC Economu
NYC Partnership - Full Report (pdf)
http://www.nycp.org/PDF/PFNYC_TransportationStudy.pdf


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TRANSIT PRIORITIES: THE REAL ESTATE VIEW
Tri-State Transportation Campaign
December 15, 2003

A report from the NYC Partnership, the city’s most prominent business 
group, sharpens NYC’s debate over whether capital investment in mass 
transit capacity should emphasize general mobility improvements or underpin 
real estate development and thus serve altogether new trips and travel markets.

That debate has been developing within New York City for the past several 
years. Mayor Bloomberg is on one side of it, stating often that his number 
one mass transit priority is extending the #7 subway to the far west side 
of Midtown to facilitate stadium and office tower development. Lower 
Manhattan business interests have taken the point further. They propose 
that in-use subway infrastructure be appropriated for a direct 
LIRR-downtown link they say will boost investment in lower Manhattan.

The Partnership’s paper also backs this point of view. Indeed, it complains 
that the transportation industry focuses too much attention on current 
infrastructure and users. It argues that major investment decisions about 
city transit are generally made without consulting the business community 
and with little objective regard for projects’ likely contributions to 
economic growth.

The report ranks major transportation proposals according to their 
estimated economic development impacts and their transportation benefits.

The economic benefits appear to be linked directly to property values, 
though job creation is also mentioned at points in the argument. 
Transportation benefits are derived from assigning values to reduced trip 
times, including time associated with transfers and walking. It does not 
estimate the overall mobility or access benefits from groups or 
combinations of projects, or from single projects’ integration into the 
overall transit network.

The paper says transportation hubs are the best motors for economic growth, 
because multiple lines converge at them and thus they are stronger drivers 
of business location decisions than are single transit lines. Thus, the 
report is bullish on the lower Manhattan transit hub (combining the 
permanent PATH station with an upgraded Fulton Street station and 
encompassing nearby N/R and E-train stations) and the Farley Building/Penn 
Station project. It is also favorable toward connection of the LIRR to 
Grand Central and the extension of the #7 train to the far west side. 
Without analyzing it, it also reports favorably on the Brookfield 
"super-shuttle" project, which would take part of the A/C subway tunnel 
between Brooklyn and Manhattan for a LIRR connection to lower Manhattan. 
Also without analysis, it recommends that the Metropolitan Transportation 
Authority develop a regional ferry system.

On the other hand, the Partnership calls for rethinking the Second Avenue 
subway, calling for analysis of various segments and for the MTA to scrap 
its commitment to its full-build construction. It is also negative 
regarding additional commuter rail tunnels between New Jersey and 
Manhattan, though it admits that it did not factor in benefits to New 
Jersey for the latter and elsewhere calls for rail passenger service from 
New Jersey to Queens.

The paper seems far from the last word on appropriate transit investment 
for Manhattan, though it is perhaps valuable as a stark statement of the 
real estate industry’s point of view. While historically, subways led the 
development of much of NYC, the long hiatus in transit development during 
the second half of the 20th century has created many areas where job and 
residential development has outstripped mass transit capacity. Brutal 
crowding on the Lexington Avenue line is a case in point. The Partnership 
does not consider how such conditions may present a major obstacle to 
people living and working in lower Manhattan, for instance, nor how some of 
its recommendations will make subway crowding on the east side even worse. 
Moreover, the lack of network considerations in estimating transportation 
benefits would seem to put a greater damper than usual on a project like 
the Second Ave line, which will increase transit access options for many 
across the city. And on its face, it is hard to see how a project like the 
Farley Penn Station project, which has no transportation benefit at all, 
will on its own stand as a magnet for development.

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REPORT: NEW SUBWAY LINE A WINNER
Newsday, by Pete Bowles
December 19, 2003

A Second Avenue subway line would generate more economic benefits for the 
city than it would cost to build, a group of elected officials, business 
and labor leaders said Friday.

The group released an economic report contradicting a study last month by 
the Partnership for New York City that argued the pricetag for the subway 
line exceeds its economic development benefits by nearly $2.7 billion, 
largely because it would take 17 years to build.

The report by the Regional Plan Association released Friday said the 
subway, when completed, would generate $14.4 billion annually in benefits, 
far outweighing the estimated $15 billion cost of the project.

The association also calculated that the project, which first was suggested 
in the 1920s and has been talked about since, could be completed in 10 or 
12 years rather than 17.

"There's no greater transit investment for New York's economic future than 
the Second Avenue subway," said U.S. Rep. Carolyn Maloney (D-Manhattan), 
who joined other officials at a news conference. "Transit overcrowding is 
crippling our economy and the Second Avenue subway would solve that 
problem, serving 600,000 people a day from its first day of operation."

According to the Regional Plan Association, the subway line would create 
70,000 jobs during construction and an additional 86,000 jobs after its 
completion.

Assembly Speaker Sheldon Silver (D-Manhattan), who has secured $1.05 
billion in state funding for city transportation projects in 2004, said the 
state is committed to the project. He said a Second Avenue subway would 
ease overcrowding on the Lexington Avenue line and "will provide major 
benefits to many areas that are vital to the future of New York City."

The line would run from 125th Street to the financial district. The 
Metropolitan Transportation Authority is nearing completion of design and 
engineering work and construction could begin as early as next year.


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PRESS RELEASE
December 19, 2003
Office of Congresswoman Carolyn Maloney

SECOND AVE. SUBWAY AN ECONOMIC ENGINE FOR NY
Coalition of Elected Officials with Transit, Business & Labor Leaders 
Release first-ever Economic Report detailing Billion Dollar Benefits of the 
Second Avenue Subway


NEW YORK, NY - The economic benefits of the Second Avenue subway, including 
thousands of jobs and billions of dollars in economic activity, would far 
outweigh initial construction costs and greatly improve the city’s transit 
system, a group of elected officials, transit, business and labor leaders 
said today, led by State Assembly Speaker Sheldon Silver, Representatives 
Carolyn Maloney and Charles Rangel, Manhattan Borough President C. Virginia 
Fields, and Robert Yaro, President of the Regional Plan Association.

The group jointly released the first ever economic report focused 
specifically on the Second Avenue subway, conducted by the Regional Plan 
Association. The major findings of the study include that the Second Avenue 
subway could create 70,000 jobs during construction and the capacity for an 
additional 86,000 jobs after construction, and that the project could 
generate more than $14.4 billion in annual Gross City Product (a measure of 
all the goods and services produced in the city), $7 billion in additional 
wages, and $1.26 billion in economic activity per year in the city. The 
full report will be made available at: www.rpa.org.

Also participating in today’s event were: Public Advocate Betsy Gotbaum, 
City Council Speaker Gifford Miller, State Senators Martin Connor, Liz 
Krueger, & Tom Duane; State Assembly Members Herman ‘Denny" Farrell, Pete 
Grannis, Cathy Nolan, Steve Sanders, Deborah Glick, Richard Gottfried, 
Scott Stringer, Jonathan Bing, Adam Clayton Powell, Jr., Keith Wright, & 
Adriano Espaillat; City Councilmembers Phil Reed, Eva Moskowitz & Alan 
Gerson; Lee Sander, Co-Chair of the Empire State Transportation Alliance; 
Gene Russianoff, Senior Attorney, NYPIRG Straphangers Campaign; Don Winter, 
President, & Nancy Ploeger, Executive Director, Manhattan Chamber of 
Commerce; Sidney Baumgarten, President, East Side Chamber of Commerce; 
Community Board leaders Madelyn Wils (1), Jim Smith (2), Herman Hewitt (3), 
Charles Buchwald (6), and David Givens (11); and Beverly Dolinsky, 
Executive Director, Permanent Citizens Advisory Committee/NYC Transit 
Riders Council.

Speaker Silver said, "New York State is very committed to this project and 
I consider it my highest priority. I have already personally secured $1.05 
billion for it in the current MTA 5-year capital plan. It is important that 
we capitalize on this commitment and not let this opportunity to improve 
our transportation system get away. In addition to easing overcrowding on 
the Lexington line, the full-length Second Avenue Subway will provide major 
benefits to many areas that are vital to the future of New York City, 
including the Lower East Side, Chinatown and the Financial District."

Congresswoman Maloney said: "There’s no greater transit investment for New 
York’s economic future than the Second Avenue subway. Transit overcrowding 
is crippling our economy and the Second Avenue Subway could solve that 
problem, serving 600,000 people a day from its first day of operation, more 
than any other project in the nation. Today we are releasing a report 
showing that Second Avenue Subway can create 70,000 construction jobs and 
86,000 additional jobs once it begins full operations. It will boost 
business creation and retention, improve air quality, save travel time and 
create alternative routes to the city’s business centers (redundancy being 
essential in a post-9/11 world). It will add capacity, reach new, 
underserved areas, and run through neighborhoods that support 1.9 million 
existing jobs -- with enormous potential for growth. In short, New York can 
no longer afford to put off construction of the Second Avenue Subway."

Congressman Rangel said: "The study conducted by the Regional Plan 
Association (RPA) outlines the tremendous economic growth and other 
benefits that construction of the Second Avenue will bring to our city, 
including tens of thousands of new jobs, billions in economic activity and 
city revenues for improved public services, the elimination of overcrowding 
on the Lexington Avenue Subway, improvement in our air quality resulting 
from a reduction of car travel plus enhanced economic development, not only 
in the central business areas, but also in the empowerment zone area in 
upper Manhattan. The MTA should make a public commitment now to the full 
length construction of the Second Avenue Subway and adopt it as part of its 
Capital Plan."

Borough President Fields said, "With construction scheduled to begin next 
fall, the Second Avenue Subway project is the only major capital project 
not already underway on the MTA slate that is ready to go. It must remain 
the top priority. This new subway line, which has already been far too long 
in coming, will provide increased capacity and better connectivity, both of 
which will benefit commuters, businesses, and ultimately, the entire City."

"It's time to set transportation priorities, and the Second Avenue Subway 
must be our top priority," said Robert Yaro. "No other project provides the 
widespread transportation and economic benefits that Second Avenue brings 
by adding vital capacity to a subway system that hasn't really grown in 60 
years."

Public Advocate Gotbaum said, "How many years have we been talking about a 
2nd Avenue subway line? How many times have we heard that it would make 
life easier for the elderly and disabled, for commuters of all classes? A 
2nd Avenue subway line would make morning commutes much faster and more 
reliable. It would encourage economic development across a broad swath of 
the City by making Midtown and Downtown more accessible. It would make 
commuting to work by subway more pleasant and efficient. It would mean 
fewer cars on the street and therefore less pollution and less asthma."

BACKGROUND: Major funding for the Second Avenue subway has come from the 
leadership of State Assembly Speaker Sheldon Silver, who successfully 
advocated for $1.05 billion in funds to be included in the MTA’s capitol 
plan. The House of Representatives recently approved $2 million for the 
Second Avenue subway for Fiscal Year 2004, and Congress appropriated $2 
million for the Second Avenue subway in FY03, $2 million in FY02, and $3 
million the year prior. This is almost double what had been marked in a 
five year federal transportation bill by Congress in 1999. Borough 
President C. Virginia Fields also allocated $1 million in funds for the 
project.

The Second Avenue subway would be New York’s first new subway line built in 
generations. It would relieve massive congestion on the most overcrowded 
subway line in the nation ­ the 4, 5,6 trains on Manhattan’s East Side. It 
would also alleviate sharp increases in commuter traffic on the 4,5,6 lines 
that are expected to result from the connection of the Long Island Railroad 
to Grand Central Station, a project know as East Side Access. When 
completed the full length Second Avenue subway will carry approximately 
600,000 people daily. The total estimated budget for the project is 
currently $16 billion, while extensive economic growth for the city as a 
result of the project is anticipated to be both immediate and long-term.

The Second Avenue subway has been rated "Recommended" by the Federal 
Transit Administration. The MTA is moving forward with environmental review 
and is nearing completion of preliminary design and engineering work. A 
Final Environmental Impact Statement (FEIS) was submitted to the FTA this 
fall. In December of 2001, the MTA Board approved a $200 million contract 
for preliminary engineering for the full length Second Ave subway project. 
This work included the design of the tunnel structures from 125th Street to 
lower Manhattan and the rehabilitation of the existing tunnels to conform 
to new tunnel construction. The work also included the design of station 
envelopes, utilities, track work, mechanical systems, life safety systems, 
communications systems and maintenance facilities and storage yards. 
Preliminary Engineering and Design and the FEIS must be approved before the 
MTA can ask for a Record of Decision. Construction is slated to begin in 
2004. During the 1970s, three tunnel segments were built for the Second 
Ave. Subway ­ between 99th and 105th Street (1,814 feet), between 110th and 
120th Street and Bowery ­ Manhattan Bridge Plaza (2,556 feet), and Division 
Street to Canal Street (736 feet).