Gotham Gazette

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Rebuilding NYC

The Last $1.2 Billion

International attention has focused on the dramatic architectural plans for the World Trade Center site, and the unprecedented outpouring of public desire to be involved in key decisions. But, until now, there has not been much focus on the funds allocated by Congress to revitalize the New York economy.

In the months after the terrorist attacks, Congress and the Bush administration gave $21.5 billion in aid to New York. It was a good deal less than we lost. It did not include, for example, compensation for the lost tax revenue, a standard part of federal relief in hurricanes or floods, which in New York would have amounted to $8.8 billion.

Restricted Only By Geography

Legally, the $1.2 billion remaining in federal rebuilding funds can be used for virtually any kind of revitalization, as long as it is directed at the area below Canal Street-including the Financial District, Battery Park City, much of Chinatown, Tribeca, and the part of the Lower East Side below Canal.

Some groups have argued that this is too narrow a definition of what areas were affected by the attacks. "I don't understand what part of Lower East Side doesn't sound like Lower Manhattan, quipped Barbara Caporale, of the Rebuild with a Spotlight on the Poor Coalition.

To change the zone would require an amendment to federal legislation, a step favored by a number of advocacy groups.

But $2.7 billion of the money came in the form of cash that can be used for virtually any purpose in revitalizing Lower Manhattan. The first $1.5 billion was spent primarily on grants to attract and retain businesses and residents, as well as business recovery grants.

Today, $1.2 billion in federal funds remains.

The chance to figure out how to spend this money brought 150 regular New Yorkers together last week, at a forum sponsored by the Fiscal Policy Institute and Regional Plan Association. They debated a range of ideas about where the money might go. There is widespread concern, though, that many of these ideas may not get the attention they deserve. When it comes down to it, the only vote that counts is that of Governor George Pataki.

The governor has been evasive in recent months, but last August, the Daily News reported that the governor's vote was as good as cast: "The only significant pot of flexible federal aid now available is $1.2 billion held by the Lower Manhattan Development Corp. Gov. Pataki has vowed to use all of it for a rail link to Kennedy Airport."

The public sees it differently. There are several alternatives that it prefers to the rail link:

Community Services and Facilities: include investments in parks, streetscape improvements, daycare facilities, libraries, health screening, and "Liberty Jobs" that would put people to work right away, at the same time as providing needed services.

Housing: Investments in housing could include building new, mixed-income housing, making lower Manhattan affordable to a range of New Yorkers; and preserving existing affordable housing, to prevent current residents from being priced out of the neighborhood.

Local Economic Development: Efforts could include providing affordable space to start-ups and small businesses, subsidizing wages, job training and career development, English classes, special events or marketing campaigns to attract visitors to the neighborhoods, and work with business, labor and government representatives to focus on entire business sectors, instead of focusing assistance at dealmaking with individual businesses."

Arts & Culture: Initiatives could include the financing of the much-discussed cultural buildings that have been proposed for the World Trade Center site, community arts institutions in other areas of Lower Manhattan (such as a Children's Theater or a Chinatown cultural & community center), a "NYC WPA for artists" to provide direct employment in the arts, or grants to commission artworks for historical groups, schools, libraries, or other downtown institutions.


Participants at last week's forum heard from an array of experts and community members presenting options about where the money might go and how much it would buy in each category of spending (pdf format). They were then given 12 gold coins, each representing $100 million, and asked to vote with their pocketbooks for how they think the money should be spent.

The clear consensus of the evening was that a tunnel could suck all the money away from other priorities and still be far from having a viable financing plan. This is consistent with public opinion as expressed in many different ways -- a poll of downtown residents released last week , a resolution passed last summer by Community Board 1, the public input at Listening to the City (pdf format), Imagine New York (in pdf format), , and the Lower Manhattan Development Corporation's own neighborhood outreach meetings (pdf format) from the summer of 2003.

Not everyone who opposes the use of this money for the tunnel is against the project itself, especially if it can be done in a way that adds subway service in Brooklyn and Queens, rather than taking away from it. "The rail link can be a very important project for the city and region if it is done properly and serves a variety of markets," Jeffrey M. Zupan, Senior Fellow for Transportation at the Regional Plan Association and one of the city's foremost experts on the subject, said at Tuesday's meeting. "What's becoming clear, though, is that the community development funds may not be an appropriate funding source for the project."

Still, when the voting was in, the JFK link ranked last in order of importance. The participants gave $468 million to mixed-income housing, $276 million to local economic development, $204 million to community services and facilities, and $180 to arts and culture.

They wanted to give only $72 million to connect JFK and the Long Island Rail Road to lower Manhattan.

David Dyssegaard Kallick is senior fellow of the Fiscal Policy Institute, and coordinator of the Labor Community Advocacy Network.

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