Civic Conversations: Far West Side of Manhattan - Opening Statements
The following are excerpts of opening statements made at a
June 24 forum on the city's plan to develop the far West Side of
Manhattan. The forum was a Civic Conversation sponsored by Citizens
Union Foundation, the publisher of Gotham Gazette.
Joyce Purnick, New York Times:
Here we are, on a summer night when we could all be home relaxing or taking in a
movie. And instead we're meeting in a midtown auditorium to talk about a
I don't think the city has seen anything quite like this since Westway,
which is saying quite a lot. If you're too young to remember Westway, it
is worth looking up. At least this is not in the courts yet. It's just
on TV -- and in our minds. It's on TV in an ad campaign of a scale that
is unprecedented even for New York City. The two sides, it seems are
spending more money on TV ad campaigns than the presidential candidates
are, but then both George Bush and John Kerry think that they know how
New Yorkers are going to vote in November.
Development of a city that has limited space is always controversial,
and the far West Side is the last large undeveloped area in Manhattan.
This kind of controversy, I think traditionally, centers on the
fundamental economic question: Who will really pay to develop the
complex and will the stadium yield the economic benefits the city
So we have a lot to discuss and a number of experts to hear from.
Daniel Doctoroff, deputy mayor for economic development:
I rushed here from my previous engagement, which was
hosting a party for the 60 or so people in the Department of City
Planning who this week really crossed a major, major threshold by
submitting the 6,000-page draft environmental impact statement [for the
West Side development]. I asked the resident expert at the Department of
City Planning, "Is this the biggest, most complicated, longest
environmental impact statement of all time?" And without hesitating he
said, "No, actually it's number two." I said, "What was number one?" He
said, "Did you ever hear of Yucca Mountain?" I said, "No what's that?"
He said, "Well that's where we dispose of our nuclear waste."
I'm not exactly sure what that story means.
What we are here to talk about is the future of New York City. New York
has a history, at critical junctures, of taking bold action that sets
the city on a completely different course. And the Hudson Yard Plan
falls into that tradition: The tradition of Central Park, which was
thought to be impossible and took years to get done. The tradition of
the Brooklyn Bridge. Also the tradition of Park Avenue.
There was no Park Avenue 100 years ago. Instead what there was was
dirty, twisting rail yards. In 1903, the state legislature, in one of
its acts of infinite wisdom, actually ordered the New York Central
Railroad to cover its tracks. The New York Central Railroad said, "OK
how do we pay for it?''
They hit upon an ingenious solution -- one that is our inspiration in
many ways for what to do with the Hudson Yards. What they did was they
built a big deck over those yards. Down the middle of it they built a
magnificent new boulevard, Park Avenue. They crowned it with a
spectacular new train station, Grand Central. And to pay for it, they
sold the plots of land that they'd created on a platform. By 1935, the
Waldorf Astoria, the Helmsley Building, St. Bartholomew's Church, Grand
Central itself, and a series of apartment buildings, hotels and office
buildings were built on that platform. Today 160,000 people work on that
platform, and the train, 100 years later, still runs under it.
We have a comparable opportunity to change the future of New York City
in a dramatic way and do it over rail yards. And we have a comparable
need, because the plain fact of the matter is we are running out of
space in New York City, and the far West Side over the Hudson Yards is
Manhattan's last frontier.
Go ahead and walk to this area on the far West Side of Manhattan. What
you'll see are rail yards, you'll see abandoned lots, unused lots,
parking lots, warehouses, auto body shops. What you'll also see is a
completely inadequate convention center. Our convention center, the
Javits Center, is the 16th largest convention center in North America.
Even [the convention center in] Rosemont, Illinois, is bigger than the
Javits Convention Center.
So, the city and state working together have developed a plan to
transform this rather forlorn area into one of New York's great places.
The key elements of the plan are first to extend the Number 7 subway
line. The reason nothing has happened in that area in 80 years is
because there's no mass transit. So we will extend the Number 7 line
west under 41st Street and go down under 11th Avenue to a new station at
34th Street and 11th Avenue.
We will deck over those rail yards just like we did 100 years ago. We'll
add parks and open space to an area that will help lure commercial and
residential developers, commercial and residential tenants. Today the
360-acre area has a grand total of 615 trees, shrubs and bushes. We will
add over 20 acres of parkland. We will rezone the area from its current
zoning of manufacturing to a higher density, higher value commercial and
West of 11th Avenue, we will finally address the inadequacies of the
Javits Center in two steps that will be done simultaneously. First we
will expand Javits, ultimately up to 42nd street. And secondly, we'll
create a convention corridor that extends down to 30th Street by
building the New York Sports and Convention Center, obviously the least
controversial element of our plan.
This is not just a sports stadium -- this is a building that we project
to be in use 17 days out of the year as a stadium. But because it will
be one of the most technologically advanced facilities of its type in
the world, with a retractable roof, removable seating, with a lighting
grid that will come down from a retractable roof and a removable field,
it will be easily converted into a 200,000 square foot, column free
exhibition and meeting convention hall.
Altogether, we will create in this area over a 30-year period of time,
roughly 120,000 new permanent jobs Over 12,000 units of housing, roughly
2,000 of them affordable. Twenty acres of new open space. And we will
create a place for millions of conventioneers and other visitors.
It will be a spectacular investment for the city and state. Under a
roughly $4.5 billion public-sector investment over the next 30 years, we
will generate we believe roughly $67 billion in new revenue. That's
enough to pay the cost of the police force for 30 years. It's enough to
build 1.5 million new units of housing in Brooklyn or the Bronx.
So the question is clear. Are we going to invest in the future in a way
that makes financial sense for the city, that makes planning sense? We
believe we have a once in a lifetime opportunity to firmly establish New
York's financial future. And we hope you agree that it's time to take
Christine Quinn, City Council member from District 3, which
includes the Hudson Yards:
I represent the area that is being rezoned and targeted for the stadium.
I first want to say something very important that I think sometimes gets
lost in the debate on this. Neither myself or the other elected
officials who are here tonight or the community board members or
neighborhood residents are opposed to this stadium in a major
anti-development way. Those of us on the West Side feel strongly -- we
don't necessarily call it a wasteland, a word that has been used - that
it is an area that in need of rezoning. We don't agree that only a
couple of hundred people live there - in fact, according to the census,
there's 21,000 people who live in the 50-square block area that would be
rezoned -- but we do agree that the area should be rebuilt and upzoned.
And we do believe that the heart of that rezoning and up-building should
be an expansion of the Javits Center. And we wish this plan was more
squarely poled on the Javits center and its expansion into a model that
would truly bring convention business to the city without being attached
to the stadium.
It's true that the city of New York is woefully far behind as it relates
to bringing conventions to the city, but if you look at the 18 cities
that beat us, so to speak, only one of those has a model where the
convention center flows into a stadium and another one has a stadium
across the street. So, only two of the 18 have a model like the one that
we're proposing here. The other 16 do not but nonetheless beat us. I
think that and other facts show that this is not the model one has to
have to truly be competitive in the 21st century convention business.
Let me say a little bit more about the plans for the Jets stadium to be
built on the Hudson Rail Yard, which has been put forth by the Bloomberg
administration. I and many others have deep concerns about the financing
plan, in particular, the amount of public money that is going to go into
this plan. The Jets stadium I think will be the most expensive stadium
we've seen built. It's going to cost in the end $1.4 billion. The city
will pick up $300 million of that and the state another $300 million. We
hear a lot in the economic analysis, in the economic justification of
this stadium, that the money that is spent will be made up by increased
revenue, increased tax dollars.
I don't think that is actually true for a couple of reasons. I am
troubled by the fact that the environmental impact statement and most of
the economic discussion about the stadium is based on an Ernst & Young
statement, and nothing against Ernst & Young, but they were hired to do
that study by the New York Jets. That does not make them an independent
voice in this process -- it makes them an equal voice, not an
independent voice. I don't know of any time before -- certainly it's not
frequent in the municipal government -- that projects, particularly
massive projects like this, are debated and deliberated based on an
analysis that was done by one of the parties with a major interest at
It would have been as if myself or Community Board 4 had commissioned
the people to do an economic analysis. I think the Jets would be right
to say, "You're going to go by their numbers? They're against this, they
said they're against this, they hate this. Why would you go by their
I think we're right to say, "The Jets! They're for this -- they want
this. They're going to make a lot of money, why should we go by their
numbers?" I am very troubled by that.
I am also troubled by the fact that if you look at the analysis that is
put out by the city of how much tax money will come in, they're based on
some fairly flawed ideas. When the deputy mayor testified at the City
Council a couple of weeks ago, there was discussion about the stadium
bringing in many events to the city -- the Superbowl, the Final Four,
other major sporting events. In that analysis, there was some projection
that we would get those types of events in some cases every five years.
Later on in our hearing, sports and convention financial experts came
forward and said that those numbers are the most optimistic numbers they
have ever seen for any convention center. In fact, it is their
experience that the National Football League and other leagues do not go
to cities more than once a decade. And that for a city to get that much
business out of it is just impossible to imagine given these experts'
knowledge of sports scheduling. Also, many of the events, which are
projected to happen at the stadium, are events that require pressure
from a home team. As far as we know, besides the Jets, there aren't
going to be any other home teams of other leagues. Maybe there will be
and maybe that will change the economics, but maybe there won't be in
which case things will come in a great deal shorter than is being
The thing that's perhaps most troubling about this plan is the degree by
which it's moving forward out of the public domain and public debate.
We're here tonight having a public discussion because Citizens Union
stepped forward and said that we need to have this discussion. But the
movement of the $300 million dollars of city and state money -- neither
will be voted on by the City Council or state legislature. Such a
massive project -- whether you are for or against it -- needs to have
more opportunity for public debate, public modification and moments
where elected officials can weigh in and convey the opinions of their
constituents by voting yea or nay.
Adam Barsky, deputy secretary to the governor for finance &
It is good to have the public debate. That's why we're here tonight.
We want to have the discussion. We want to have the input.
Currently the state and the governor support this plan the mayor has put
forth. We are a partner with them on this project. We negotiated a
memorandum of understanding that laid out our intentions of going
forward, and we believe that, from the state's perspective, it is a
very, very good and wise investment that will have tremendous return,
that will increase the revenue to the state to support all of the
That's how we're able to pay for the programs that you pay for in the
state. You have to have a tax base. You have to invest in your tax base.
You have to expand and grow. You have to keep the state viable and
competitive. Projects like this are the way you do that.
Critics come out and point to, "Well, if you don't spend $600 million
on this, you can spend it on these other [things]." That's not a good
characterization of how things really work.
I was a former city budget director and a budget adviser. We're talking
about $600 million of combined city and state money that comes out of
the capital budget, as opposed to an operating budget.
We want to look at these things with a little bit of context. Let's
assume that we spend $600 million in public investment in this project.
What that means is we go out and borrow the money. Because we are a
municipality, we can borrow at a tax-exempt rate which is the lowest
rate you can possibly get. That way to do a $600 million project, it's
about $40 million to $42 million in a year in debt service. When you
combine that $42 million a year, out of a combined $140 billion budget,
that's about 1/300th of one percent.
In terms of the magnitude, for a project of that scope, we're getting
revenue that would far exceed that investment. [[The projection of
revenues]] don't necessarily take into account all all the multipler
effects, the indirect spending and the indirect revenue. They were very
conservatively put together. They analyzed this using the same models
that our state Economic Development Corporation uses to analyze all
projects. They didn't just rely on the Ernst and Young study. They put
it through their model and they came up with the same answer: This is a
very good investment to generate a tremendous amount of revenue for the
state and the city.
Looking at it from the state's perspective, our $300 million in this
project means we're going to be spending $15 million to $20 million a
year in additional appropriations. In return for that, we're getting $3
billion to $5 billion of investment for the West Side of Manhattan.
That's a pretty good deal. That is something we think is really worth
The governor has been out there for years now, since 1995, trying to
gather political support, trying to get the convention center that this
city needs, and do the kind of things we need to do. We lose business
every year, we lose hotel rooms every year. People are very anxious and
very excited about having conventions here; they were very disappointed
that the state legislature this week would not approve the legislation
to move forward on the [expansion of the] Javits center. We will
continue working with them to try to get that legislation moving
James Parrot, deputy director and chief economist of the Fiscal
The Fiscal Policy Institute has not
taken a position for or against any of the components of the West Side
proposal. At this point, it's a very complicated proposal. We're trying
to understand it. We've been fairly engaged with the city in discussing
this. We applaud the city's openness and willingness to share
information on this.
One of the aspects that we've been particularly keen to understand is
the calculation behind the $67 billion in revenue that would be created
over the next 30 years. We've yet to see sufficient back up of that. I
understand that those calculations are being reviewed, and we will look
forward to seeing the revisions of that.
What I do want to talk about is an aspect of the financing that is
clearly very large and complicated. The city is proposing to borrow
$4.65 billion dollars and the state another $1.15 billion Ð at least.
That's most of the financing that goes into this. The Jets are supposed
to be contributing $800 million dollars, and a hotel investor to be
identified is contributing $200 million dollars. So, it's a fairly large
public investment. In an effort to make the project self-financing,
though, it has increased the risk involved.
We have particular concerns about the subsidy policy that's being
proposed. There's a name for this, UTEP: the Uniform Tax Expenditure
Policy, which basically involves the developers of residential and
commercial buildings entering into private agreements with the city's
Industrial Development Authority that will allow them to pay a reduced
rate of property taxation. Now this involves an implicit subsidy to the
developers of the commercial property.
We tried to understand the justification for this. We have looked at
the real estate model. While they project the future need for office
demand in the region, and in the city and in Manhattan, we don't know at
what prices a given office building is being projected for. So, we
don't know whether or not a subsidy is going to be needed. In effect,
the UTEP policy is a tax subsidy approach on automatic pilot.
Some city representatives will say that the city subsidized every office
building in Manhattan for the last 25 years. That goes back to 1979.
Certainly, you can understand some need for the city to induce
development, to induce investment back in New York City in the years
immediately following the 1975 fiscal crisis and the decade of 1970s
when the city lost 600,000 jobs and there was this big outmigration of
corporate headquarters. And in the early 1990s recession when the city
lost 400,000 jobs in a matter of two or three years, the city was very
concerned that there be a recurrence of the massive job flight among
corporate headquarters that had occurred in the 1970S.
The deputy mayor does a superb job in projecting to people, not only in
New York City, but as he goes around trying to convince the
International Olympic Committee representatives about how compelling New
York is for the games and as a location for global business. Because
it's so compelling, why do we have to continue giving subsidies?
We should turn off the autopilot on the subsidies policy. It does a lot
to antagonize small and medium sized businesses in New York who don't
have the same access to those tax breaks. A lot of companies are getting
tax breaks -- Madison Square Garden is one of them. They have a full
property tax exemption -- $10.6 million a year -- and they have it for
The annual cost for tax subsidies in New York City that goes to
business, commercial and industrial activites, is $1.3 billion dollars.
The city's proposal is basically to continue providing subsidies. Now,
what are the consequences of this? I think it makes the financing
riskier. Increased pressure for development. It probably creates
pressure for more subsidies because the tax collections related to
development will be less. The city will be under pressure to foster
more development at a faster pace and it may then resort to even deeper
subsidies in the future. It's a treadmill. Once you get on it, it's
hard to get off. We've been on it for 25 years. I think its time to get
Putting UTEP in to the plan locks the city into the subsidy policy for
the next 40 years. Given the uncertainty of projecting what all the
development needs are going to be and to understand what the market rate
will be at those times, I think it's a flawed part of the policy to say
now -- 10 years before any development starts -- that we're going to
offer tax breaks. So, my recommendation as we proceed in our analysis of
this is that this UTEP policy seems to be a wrong approach and that by
taking this out of the proposal, it would improve the outlook of the
city budget. It would improve the financing behind the Hudson Yards
Infrastructure Corporation, and it would be good economic development
Richard Ravitch, former chair, Metropolitan Transportation
I have not spoken out on an issue of this kind in the
city since I left the public sector many years ago. I am a great admirer
of Deputy Mayor Daniel Doctoroff. I admire his audaciousness and his
vision and it pains me to disagree with him on this issue. But I feel I
have to do so and I will try to explain why.
Number one, I had the honor of becoming chairman of the MTA during a
period of serious neglect by the governments of the state and the city
of New York of the conditions of the public transportation system. The
1960s was a time of great preoccupation with new projects, bold visions,
and no money for capital maintenance of transportation system.
During my tenure, the air rights over the rail yards that are now the
focus of our attention were considered to be a very valuable asset for
the MTA. And I, with more than a passing interest, entertained many
proposals for private development of those air rights. I rejected all of
them because I did not think any of them would give fair value to the
It is hard to be precise about the value of those air rights over the
rail yards. But in my judgment, they belong to the MTA and any sale or
development of those rights must be for the ultimate benefit of the
transit system in the city of New York. This is particularly true since
the MTA will be coming out with a capital plan in July that requires $15
billion for maintenance, without any consideration of new projects or
My successor Robert Kiley and I recently wrote the current MTA chairman
Peter Kalikow a letter in which we urged him to respect the fact that he
has the power and the duty to make sure that that the transportation
authority is not shorted in this deal.
The second thing that bothers me about this plan is that the State
Legislature has been asked to enact legislation that will further the
power of public authorities in the state of New York to act with respect
to this site even though there is no firm deal with the MTA and there is
no firm deal with the New York Jets.
We have been told anecdotally that the Jets are going to put up $800
million and everyone seems to accept that. But there is no evidence that
they are going to put up $800 million. They are going to put some equity
in, they are going to get a very attractive loan from the National
Football League, and the rest of the money they plan to borrow.
I don't blame the Jets for a second. I admire their willingness to go
through what they are going through to try to get a stadium in New York
City, but I want to disabuse anyone of the idea that the Jets are going
to put $800 million in credit or cash into this project.
So how can the public, how can the legislative bodies of the city and
state of New York properly make a decision about the wisdom of this or
about the real economic benefits? Nobody of course can predict the
future. And I have no question in my mind that the rosy predictions have
as much validity as the pessimistic predictions. But how can those
decisions be made without knowing what the business deal is and how much
money is actually going to be put into this project?
My third major problem with this is that the city plans to use the
Transitional Finance Authority to insure the financing of this project.
The Transitional Finance Authority was created to generate borrowing
capacity for the city for capital purposes when it was up against its
constitutional debt limit.
The city's intention to use this kind of revenue to back up the
financing for this project is very troublesome. The Transitional Finance
Authority has about $5.5 billion in revenue from the city income tax and
sales tax, and they have $550 million of debt service on its existing
If the board of the authority, which is in a sense a mayoral agency, has
the power to expend excess revenue without going through the budget
process, then the City Council might as well close its tent and go home,
because it is a total circumvention of the budgetary process set out in
the charter of the city of New York.
If we can do it for $20 million or $40 million, then we can do it for $5
billion. This is a serious issue of governmental process.
Number four, I have no problem with the legislative body deciding to
spend this money if they understand the risks that they are taking.
There are serious cost overrun risks for the Jets stadium. And we don't
know how they are going to bear it or what credit they are going to put
behind their promise. And if they have no assets other than a contract,
then that does not ensure completion of the stadium.
So, to sum it up, I think this is a very bold effort. But I think at
this point in time, the details, the financial burden for the taxpayers
of New York, and the interests in maintaining the city's public
transportation system have to be clearly understood. And they are not.
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