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Breaking News: Reactions to Vornado’s “Plan B”

According to Reuters, Vornado announced revised plans for Moynihan Station on Tuesday. "Either the (city and state) governments are going to get their act together, which they probably will not or we'll go to plan B," said Steve Roth, CEO of Vornado.

At the Pennsylvania Station/Madison Square Garden complex, Vornado plans to remove the theater, build a grand entrance to Eighth Avenue underneath the seating of the arena and another grand entrance to the train station on 7th Avenue.

The Garden is across from the Moynihan Station, a Beaux Arts style post office completed in 1914. Vornado and partner Related Cos. are redeveloping the structure.

"What that will do is to create a new grand train station," Chairman and Chief Executive Steven Roth said during an investor meeting. "What happens with this Moynihan and Madison Square Garden is to increase the value of our adjacent 8 million square feet."

A few questions:

Where will the theater go? Will it just close? Is someone buying it from MSG?

There are plenty of unused development rights on the Penn Station block. But we wonder whether the rights would be unlocked by renovating the station instead of building a new one as originally planned? How exactly would Vornado benefit from work on Penn Station?

What will be the role of the Related Companies, Vornado's partner in the Moynihan Station Venture?

And what about the role of the public?

Let us know what you think.

Read “Vornado Goes to Plan B,” by Ilaina Jonas for Reuters.

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Media Focused on Passenger Rail

On Monday, a major story for NBC Nightly News reported that mass transit ridership has reached a 50 year high but it “may not be ready for all the Americans leaving their cars behind and hopping on for the ride.”

On Sunday, James Howard Kunstler called for fixing and expanding the rail system in an editorial for the Washington Post:

Fixing the U.S. passenger railroad system is probably the one project we could undertake right away that would have the greatest impact on the country's oil consumption. The fact that we're not talking about it -- especially in the presidential campaign -- shows how confused we are. The airline industry is disintegrating under the enormous pressure of fuel costs. Airlines cannot fire any more employees and have already offloaded their pension obligations and outsourced their repairs. At least five small airlines have filed for bankruptcy protection in the past two months. If we don't get the passenger trains running again, Americans will be going nowhere five years from now.

We don't have time to be crybabies about this. The talk on the presidential campaign trail about "hope" has its purpose. We cannot afford to remain befuddled and demoralized. But we must understand that hope is not something applied externally. Real hope resides within us. We generate it -- by proving that we are competent, earnest individuals who can discern between wishing and doing, who don't figure on getting something for nothing and who can be honest about the way the universe really works.

Read "Federal Government Remains Hostile to Rail Boom"

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Bloomberg Supports High Speed Amtrak Service

As we reported last week, Mayor Bloomberg met with Rep. Mica regarding a bill that would solicit private proposals for high-speed rail service between DC and NY. Afterwards, he released the following statement:

"I met today with Congressman John Mica of Florida, the Ranking Republican on the House Committee on Transportation and Infrastructure, who briefed me on his plan to encourage proposals to bring high-speed rail service to New York. Congressman Mica's plan makes a great deal of sense and I strongly support it. High speed rail service could cut the travel time between New York and Washington to only two hours. This would encourage more people to take the train, which simultaneously would relieve congestion at New York City airports and reduce our greenhouse gas emissions.

"Congressman Mica's plan, which is included in the House Amtrak reauthorization bill, would solicit proposals - including proposals from the private sector - to build the high speed rail service. Those proposals would be evaluated and presented to Congress for further action. Soliciting and considering proposals is an important and necessary first step toward determining the feasibility of this initiative.

"Congressman Mica's plan demonstrates the kind of ambitious, pragmatic thinking about our future that guided PlaNYC and that Building America's Future - my coalition with Governors Rendell and Schwarzenegger - is asking Congress to provide. Investing in modern mass transportation is critical to New York's future, and all options should be on the table. No idea should be ignored or dismissed simply because it is ambitious. That is not how America's greatest infrastructure marvels - from the Brooklyn Bridge to the Grand Coulee Dam - got built."

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Bloomberg to Meet with Rep. Mica on High Speed Rail Link

Yesterday, the New York Sun reported that Mayor Bloomberg will be meeting with Rep. John Mica on Friday to discuss his proposal for a high speed rail link – or “rocket train” – between DC and NY, a bill we detailed last week (see ”New DC/NY High Speed Rail Link?” and “DC/NY High Speed Rail Legislation Advances in House.”) It's no surprise that Senator Moynihan was an early proponent of the idea.

"It's a little late in the game, but we need it," the chairman of the political science department at Touro College, David Luchins, a longtime adviser to Senator Moynihan, said yesterday in an interview. "It's important because of the cost of oil, its important because of the environment, and it would be great for the economy — I see no downside. It is the most economically sound way to move people from New York to Washington."

Mr. Luchins also said that the job of generating political support could be eased by the disgruntlement of lawmakers who must deal with the rigors of shuttling between New York and Washington.

"The senator used to say you get one less day in purgatory for every day you have to spend on the shuttle," Mr. Luchins said.

As for the role of Amtrak:

A spokesman for Mr. Mica, Justin Harclerode, said Amtrak could participate but that the congressman envisions creating high-speed service that would be independent of existing commuter and freight lines, which would likely require new tunnels and ridding existing tracks of curves to facilitate speed.

On Tuesday, Bruce Reed, the president of the Democratic Leadership Council, and Paul Weinstein, chief operating officer of the Progressive Policy Institute, presented high-speed rail as the solution for air congestion in an editorial for Newsday.

That's why the next president and the new Congress should commit to building five new high-speed rail corridors in the next 10 years. The corridors would be selected based on three key criteria: geography (the flatter the terrain, the faster the train); a high probability of use (densely populated corridors with significant levels of highway and airborne traffic); and a commitment by the private sector, states and localities to share in the cost of construction. Wherever possible, the high-speed rail corridors should connect to major air hubs.

Roads and airports have direct sources of financing - namely, taxes on gasoline and ticket purchases. If high-speed rail is going to become a reality, it will need a similarly robust stream of income. That's why policymakers should establish a trust fund that would finance construction and maintenance. We could pay for this investment in a number of ways: carbon-offset purchases; a 4.3-cent diesel gas tax on the railroad industry that would raise about $200 million a year; ticket surcharges; and/or matching contributions from states served by the new rail lines.

How this would impact Moynihan Station remains unclear.

Read “High-Speed Rail Solution for Chronic Sky Troubles,” by Bruce Reid and Paul Weinstein Jr. for Newsday

Read “Congress Eyes a Rocket Train to Washington,” by Peter Kiefer for The New York Sun

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Manhattan BP Presents “Moynihan Two-Step”

Manhattan Borough President Scott Stringer wants to get Moynihan Station “back on track.” In an editorial for today’s New York Sun, he offers a “two-step strategy that builds on the strengths of the Port Authority and the public conservancies that have been responsible for development successes like Battery Park City.”

Given its experience with transportation infrastructure and its deep pockets, we should let the Port Authority broker a deal and oversee construction.

The Port Authority has $2 billion in available funds to get the deal done now. As Senator Schumer and Governor Paterson have noted, it is the only agency equipped to provide the centralized coordination — and, most importantly, the deep pockets — that the project desperately needs.

However, some critics, including the mayor, have raised very legitimate concerns about the Port Authority. They worry that it is too unaccountable to New Yorkers, and inherently insensitive to the public input and design considerations that are critical to a project of such monumental civic worth.

To solve this potential problem, the design, operation, and maintenance of the new train station should fall to a new State-City public conservancy that is accountable to the public and modeled on the Hudson River Park Trust or the Battery Park City Authority.

Call it the Moynihan Station Conservancy. The ground rules for the new conservancy would establish a process of public hearings and input before major actions took place, it would have a community representation on its board of directors, and its finances would be transparent.

Read “Moynihan Two-Step,” by Scott Stringer for The New York Sun

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Observer: Developers Want Port Authority to Buy MSG Block

Eliot Brown has the news on the latest proposal from the Venture to lure MSG back to the negotiating table:

According to multiple people familiar with discussions, the joint venture of the Related Companies and Vornado Realty Trust wants the Port Authority to come in and buy the current Madison Square Garden, along with its hotly desired air rights, a task that would cost somewhere between $1.5 billion and $2 billion. The developers have told officials that this purchase by the public sector, which would be effectively paid back by the developers should the entire project come together, is necessary to right the troubled large-scale plan. By the public sector taking a risk that the developers apparently find too risky and/or expensive—in the failed plan, billions in funding and numerous agreements for the entire project were needed before the Garden could get a new arena—the developers seem to be reasoning that the Garden would be given enough certainty to be lured back to the table.

Of course, there are many steps before that plan becomes anything more than a concept, as the bistate Port Authority would first need to be convinced that spending nearly $2 billion of highly sought money meant for regional transportation is a worthy investment, one that would come before actually rebuilding a train station. And then even if the Port Authority got behind the plan, it would still require the consent of the Garden.

The Garden has made no signs that it will deviate from its renovation plan, and a Garden spokesman, Barry Watkins, was unequivocal about the company’s intention to renovate.

“We have been and continue to be moving full steam ahead on the renovation of Madison Square Garden,” he said.
The new plan also would require Governor Paterson’s putting the Port Authority in charge of the Moynihan Station project, a step he said earlier this month he would likely take, but has yet to execute. Mayor Bloomberg has publicly criticized the concept of giving the Port Authority control, as has Assemblyman Richard Gottfried, the local representative, and Assemblyman Richard Brodsky, chairman of the Assembly committee that oversees authorities.

Governor Paterson has set an internal deadline of the end of June for the state to craft a path forward, according to people familiar with talks.

Read “The Accidental Ingenuity of James Dolan,” by Eliot Brown for The New York Observer

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Wednesday at MAS: Grand Central Terminal & The Urban Railroad Station

Please join us tomorrow for the final event in our spring program series, "Can New York Build Another Great Train Station?"

The Heart of the City: Grand Central Terminal & The Urban Railroad Station

Wednesday, May 28, 6:30 – 8:00 p.m., at the Municipal Art Society

Great railroad stations are often not just gateways to cities, but are the beating hearts of cities. Midtown Manhattan is unimaginable without Grand Central Terminal, which defines Midtown’s circulation patterns, gathers and dispenses people, moves the masses with a functional elan that is inseparable from the aesthetics of its architects’ visions. It is the great object lesson in how cities are made livable when neither form follows function nor function follows form, but when they are one and the same. Join Francis Morrone, architectural historian, for a look at Grand Central in comparison to the old Pennsylvania Station as well as some other American stations, and with an eye to what the projected Moynihan Station could mean for the future of New York.

$15, $12 MAS members. Reservations and prepayment required. Purchase tickets online or call 212 935 2075.

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AYR Recaps Brodsky’s Hearing on Moynihan, other West Side Projects

Atlantic Yards Report has a thorough recap of Assemblyman Richard Brodsky’s hearing on West Side development held last Friday. Brodsky, who chairs the Assembly Corporations, Authorities and Commissions Committee, used the opportunity to question Deputy Mayor for Economic Development Robert Lieber, ESDC’s acting president Avi Schick, MTA Chair Lee Sander and others about the public investment and current status of Hudson Yards, the 7 line extension, and, of course, Moynihan Station.

We’ve excerpted some Moynihan-related items below, but the entire recap is worth reading - especially an exchange about using eminent domain for MSG. The Observer has a brief article on Sander’s comments about bringing light rail to the West Side and WNYC focused on comments about expanding Amtrak service at Penn Station to obtain further federal funding for the Moynihan project (see our related posts on a federal proposal for NY/DC high speed rail).

Looking at Moynihan

When it came to the Moynihan Station project, which could involve a new rail station in the Farley Post Office, the relocation of Madison Square Garden, and new office towers and retail over the current Penn Station/MSG site, Brodsky had the same basic questions. “How do I know how the public investment should be made versus private--what’s the rule?” he asked.

You make what’s “necessary to maintain the infrastructure, to maintain the stature of the city” replied Avi Schick, acting president of the ESDC. “This is not a subsidy for economic development. It is maintaining and enhancing transportation.”

Brodsky asked the “value of 5.4 million in FAR.” (He was referring to Floor Area Ratio but meant, simply, development rights.)

It’s not a simple answer, Schick said, saying that the working number is $125/square foot--the figure Levin later disputed.

Brodsky again asked about the appropriate relationship between public and private investment.

“We take into account the nature of the project,” Schick replied gnomically.

Brodsky acknowledged he was facing a formidable rhetorical foe. “I’m going to get you, Mr. Schick, but it’s going to take a bit longer,” he said playfully.

(At the close of the hearing, he offered public thanks to Schick for service to the state, suggesting that this might have been Schick’s last public hearing. Schick is leaving in September, so that suggests that, at the least, Brodsky’s not planning to hold an Atlantic Yards hearing by September.)

Who’s paying?

Brodsky brought up the apparent effort by Madison Square Garden to get government to advance the cost of building an arena.

“To my understanding, it’s not for the Garden, it’s for the [Moynihan Station] project,” Schick said.

Has the Garden asked for such support, Brodsky asked.

No, replied Schick.

Brodsky amended his question: Has the joint venture--involving Related Companies and Vornado Realty Trust--asked for such funding.

Yes, replied Schick.

Lieber added the entire financing plan was under discussion.

Summing up

In closing the hearing, Brodsky said the general question of whether we’re subsidizing projects at an appropriate level still remains. Still, he said he appreciated the government officials’ willingness to answer questions at a public forum, calling it an important part of the governmental process.

“I hope we can move forward on these [West Side] projects,” he said. “I fear we’re in more trouble than we’re letting on.” (He noted that it was news to him that the hearing brought out the city’s commitment to spend up to $3.5 billion on the #7 line, given that he'd previously criticized the city for committing to only $2.1 billion.) He said he was recessing rather than closing the hearing, given that he hoped Port Authority representatives would testify as well.

Does the legislature have any power, he was asked after the hearing. While it may not have direct oversight of such project, he said, in the long run the legislature has the power to pass laws restricting certain actions.

Again he criticized governance mechanisms to manage projects that bypass democracy. "What we've structured is a set of governance mechanisms that eliminate democratic institutions," he said. "And the net result is that anonymous people.... this is a set of Soviet-style bureaucracies that are acting without any public accountability, even when they’re right. They would much rather discuss whether they're right or wrong.... The reason we're in this problem with these projects is that the governance is secretive and out of touch, and we don't have enough money."

Doesn't Brodsky favor a new authority, however, to oversee the Hudson Yards project?

"A foolish consistency is the hobgoblin of little minds," riposted Brodsky, never at a loss for words. "The answer is, right now, I'm wrestling with a series of emergencies and the fact of the matter is that the Hudson Yards deal does not represent a thought-out economic development strategy or priority for what the city and the region need. In defense of that, we're scrambling for ways of gaining some control. It's not necessarily intellectually consistent."

"Having said that," he continued, "what today's hearing was about was bringing out into public view the realities of decisions, like on Moynihan, like, for example, the Garden is now seeking public monies." (He said he'd seen documents that have not been made public.)

"The Dolans have every right to seek public support," he said. "The public ought to deal with it intelligently. That's what this is about. This is about returning these things to the control of public agencies."

Agencies, perhaps, but not--as per his comments--public authorities.

Read “At West Side Hearing, Brodsky Questions Subsidies, Muses About Eminent Domain for MSG,” from Atlantic Yards Report.

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DC/NY High Speed Rail Legislation Advances in House

According to the Wall Street Journal, the bill that would have the U.S. Department of Transportation solicit proposals for a high speed rail service between NY and D.C. was approved on Thursday by the House Transportation and Infrastructure Committee. Chris Conkey reports that “the bill's prospects appear to be strong since it enjoys the support of the committee's Democratic and Republican leaders.” (For more info on the bill read yesterday’s post: ”New DC/NY High Speed Rail Link?” and this reader’s comment). From the Journal:

"One way to address road and air congestion is by expanding our passenger rail system," said Rep. Bill Shuster, (R., Pa.), the ranking Republican on the House railroads subcommittee. Rep. James Oberstar (D., Minn.), chairman of the transportation committee, called the vote a historic milestone. "We ought to at least do in America what has been done in France to promote passenger rail service," he said.

The slow-moving U.S. rail network pales in comparison to the popular high-speed routes in Europe and East Asia. But hints of change are emerging. California is poised to vote on a ballot measure this fall that would steer over $9 billion toward the development of a high-speed route stretching from Sacramento to San Diego. Several Midwestern states have teamed up in the Midwest Regional Rail Initiative, which aims to speed up service times between Chicago and cities such as Detroit, Cincinnati and St. Louis.

The federal bill that advanced in the House Thursday would provide nearly $1.8 billion in grants to develop rail corridors between cities where trains can travel up to 110 miles per hour.

Another provision of the bill, championed by Rep. John Mica (R., Fla.), would have the Transportation Department solicit proposals for high-speed service along the heavily traveled and densely populated New York to Washington, D.C., route.

Mr. Mica's goal is to offer consumers a rail option that would connect the cities in two hours. It takes 2 hours and 45 minutes for Amtrak's fastest train, the Acela Express, to cover that distance.

Read “Railway Legislation Advances in House,” by Christopher Conkey for The Wall Street Journal

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New DC/NY High Speed Rail Link?

During the first of our series of programs on Moynihan Station, Walter Zullig, counsel emeritus to Metro North Railroad said the “federal government has abdicated its responsibility” in supporting rail and, as a result, we lack a world class passenger rail system in the Northeast Corridor.

That may be changing according to an ambitious bipartisan proposal in Congress to allow private companies to develop a high speed passenger rail link along Amtrak's Northeast Corridor.

Last week U.S. Rep. John L.Mica (FL), the Republican leader of the House Committee on Transportation and Infrastructure, was in New York touting the proposal to a group of international finance experts at the Dow Jones Infrastructure Summit. According to a press release, Mica recently introduced legislation, the Passenger Rail Investment and Improvement Act (H.R. 5644), that requires the U.S. Department of Transportation to solicit proposals from the private sector for engineering, financing, and development plans for a high speed DC/NY link, to be followed by similar projects across the U.S.

A map of the proposed rail link:

Here are some recent quotes from Mica:

“With the promise of a trip time from center city Washington to center city New York of under two hours, this legislation would foster a renaissance for the heavily congested Northeast Corridor by opening it up, for the first time, to private sector transportation investment and expertise. The private sector must be part of the solution if we as a nation are going to solve the problem of how we finance our tremendous infrastructure needs,” Mica said.

“Three-fourths of chronic aviation delays in this nation are a result of congestion in the New York area airspace. Air traffic control modernization is still years away, yet even then modernization will only improve aviation congestion at the margins,” Mica said. “True high speed rail, beginning in the Northeast Corridor between Washington and New York and followed by other corridors around the country, can offer an efficient and environmentally friendly transportation alternative and relieve congestion across the United States.

The Associated Press reports:

In response to a suggestion that the Air Transport Association, a trade group for the U.S. airline industry, would not support such a proposal, Mica underlined the urgent need to update the rail system.

"We'll drag them kicking and screaming into the 21st century," he said.

The upgraded rail network is merely the tip of the iceberg, though, of changes that Mica deems necessary to modernize the nation's highways, tracks and bridges. Funding for the projects remains a major hurdle. He estimates that about $1.5 trillion must be spent over the next five years just to maintain the current system.

Mica suggests that a partnership between public and private financiers is the key to getting some projects, including the high speed rail network, off the ground. Next, Mica said the regions that require the most help need to be identified and plans on how to connect individual state networks need to be laid out.

"All you need is the rules of the game, and then you can play," he said.

Amtrak ceo Alex Kummant downplayed the idea of involving the private sector when he spoke to the Associated Press on the sidelines of a hearing on the bill last week:

"I'm open to any innovative ideas," he said. "I just think we need to be really honest with ourselves on what the British Rail experience really was."

The privatization of Britain's state-run rail service in the mid-1990s proved unpopular and critics blamed it for poor service and safety problems. Many aspects of privatization were subsequently undone.

Limited-stop trains on Amtrak's Acela Express service already make the New York-Washington trip in 2 1/2 hours, and the tens of billions of dollars it would take to create a two-hour service might be better spent elsewhere, Kummant said.

We would like to see some comments about this idea. Let us know what you think.

Details on the legislation from the Committee on Transportation and Infrastructure:

The bill is a five-year reauthorization of Amtrak, and includes the essential provisions of H.R. 5644, a bipartisan bill Mica, Shuster and others introduced in March. Although the Amtrak Acela currently provides passenger rail service between Washington D.C. and New York City, the route’s average speed of 83 mph pales in comparison to speeds of successful systems in other countries, where fast and reliable high speed rail plays a vital role in transportation. French and Japanese trains, for instance, hit speeds of 200 mph and more, making these systems attractive alternatives to driving or flying.

The high speed rail provisions in the Amtrak legislation include:

• The Department of Transportation will solicit proposals for development of a high speed rail link along the Northeast Corridor between Washington, D.C. and New York City;

• Proposals will include engineering, financing, and development plans for the DC/NYC corridor;

• Proposals will require DC to NYC express service of no more than 2 hours;

• DOT will convene a Commission of state, local, federal, rail and rail labor stakeholders to evaluate the proposals and report its recommendations to Congress;

• Congress will evaluate the Commission’s report and take the necessary action to commence work on the corridor;
• The DC/NYC link will serve as a pilot for similar projects across the United States, and the DOT Secretary may request proposals for other corridors after selection of the Northeast Corridor proposal;

• Guarantees labor protections; and

• Requires a study to examine how to achieve maximum economic utilization of the Northeast Corridor.

Read “US Rep: High Speed Rail Will Ease Transport Woes,” by the Associated Press

Read “Bill Would Open Door to Private, High-Speed Rail,” by Sarah Karush for the Associated Press


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