Hudson Yards

According to the New York Post, the City has selected 5 design teams for a competition to design the Hudson Yards mid-block boulevard:

The firms have until the middle of July to come up with their designs for the project, which will run between 10th and 11th avenues from 33rd to 42nd Streets as part of the city's Hudson Yards plan. A final selection will be made in September.

The park and boulevard will be part of what is expected to include 20 acres of open space that will include plazas and parks over the rail yards.

Financing for the mid-block boulevard and park is coming from a $3 billion bond that is also funding the $2 billion extension of the 7 subway line to 11th Avenue and 33rd Street.

The five design teams were picked from 18 applicants.

Note re: 7 subway extension - the stated project budget has not changed since 2003, but revised projections from the MTA expect the extension to cost at least $3.3 billion. The City intends to pay 100% of the cost of this extension, which is unusual (subway extensions are normally funded significantly by the Federal Government and the State). This means that the subway extension alone will cost more than the existing $3 billion bond issue.

Question of the Day: How will the City pay for a $1 billion boulevard plus the $3.3 billion subway extension with only $3 billion in hand?

To complicate matters: The Hudson Yards deal with Related Companies requires the City to pay penalties if the subway extension is not built by 2014. And Related can get out of the contract without penalty if the extension is not built by 2020.

To further complicate matters: The City will rely on revenues from Hudson Yards development to service the bonds.

Read “5 Compete in $1B City Design Job," by Tom Topousis for The New York Post

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.

The MTA failed to come to terms with Tishman Speyer over the $1 billion Hudson Yards deal. According to a New York Times report from Charles Bagli (the moderator of the panel at MAS tonight), the MTA will resume discussions with three developers, including Vornado (in a joint venture with Durst) and Related, co-developers of Moynihan Station.

Tishman Speyer had sought to delay closing on the rights over the yard on the east side of 11th Avenue until it got a zoning change for the western yard, a process that could take 18 months. Under the terms of the deal struck in March, Tishman Speyer would have paid $18.8 million at the closing for the eastern yard later this year, and $24.7 million for the western yard sometime in 2009 or 2010.

In an attempt to salvage the project, the transportation authority said it will now turn to three other developers — Douglas Durst, Stephen Ross and Steven Roth — who had competed for the right to build a small city of office towers and apartment houses on a platform over the 26-acre rail yards.

“It’s an exciting and important project for New York City,” said Jordan Barowitz, a spokesman for Mr. Durst, who had offered $39 million less than Tishman Speyer. “We would be interested in resuming discussions on its development.”

Read “Talks Over West Side Yards Collapse Again,” by Charles Bagli for New York Times

In an article in today's paper, New York Times architecture critic Nicolai Ouroussoff characterized Tishman’s winning bid for Hudson Yards as a "wishful fantasty," its design as “miserably depressing," and offered a scathing indictment of the state of large-scale development in New York:

If recent history teaches us anything, it is that the project is only likely to get worse. This is because of the nature of the urban planning process in New York, which tends to lock in the worst parts of a design while allowing a developer to chip away at what is most original and often most costly.

New York is experiencing the repercussions of such thinking at ground zero, where Daniel Libeskind’s master plan, unveiled by Gov. George E. Pataki to mixed reviews in 2003, is now a distant memory. Various design components have been watered down until they are barely recognizable.

In the Atlantic Yards project, Forest City Ratner acknowledged last week that it would delay building most of the elements of Frank Gehry’s design for that eight million-square-foot development because it is short of financing. If built, the project would be a pathetic distortion of the original design. And the developer already has city approval.

There will be a similar predicament if the city manages to steamroll the Tishman Speyer railyards proposal through the public review process. The broad outlines will be virtually set in stone, from the position of the park to the location of a yet-unchosen cultural institution. So will the site’s density, among the highest in the city. And the architecture within the plan will gradually diminish in quality. The West Side railyards is as good a place as any to start rethinking this disastrous approach to charting the city’s future. The transportation authority could begin by taking the planning process out of the hands of bean counters who have little interest in anything but profit. It could bring in more thoughtful voices from the urban planning and architectural fields. It could take into account the ups and downs of the area’s economy and how a neighborhood of this scale might evolve.

But that would mean championing the public good rather than hustling for money.

Read “Profit and Public Good Clash in Grand Plans,” by Nicolai Ouroussoff in The New York Times

Read “Ada Louise Huxtable Lambasts Hudson Yards and West Side Planning”

The Conflict of Interest Board ruled it is ok for former Deputy Mayor and current Bloomberg L.P. president Dan Doctoroff to remain involved in Moynihan Station and other city projects including the redevelopment of Governors Island, PlaNYC, and Queens West.

Interestingly, Doctoroff is restricted in his dealings with Vornado Realty – the co-developer of Moynihan Station - because Bloomberg L.P. is negotiating with it for more commercial space. However, those restrictions do not apply to Moynihan Station:

The opinion issued on Tuesday limits the role he can play in matters involving Vornado Realty, which owns the building housing the Bloomberg L.P. headquarters. The company is negotiating with Vornado for additional space.

The board said that given Mr. Doctoroff’s knowledge, it was best for the city for Mr. Doctoroff to continue his involvement with the Moynihan Station plans. Vornado is a developer of the station project and was one of the companies vying to develop the railyards with whom Mr. Doctoroff met earlier this month. On March 12, Mr. Doctoroff met with the Vornado chairman, Steven Roth, and the M.T.A. selection panel, and last Friday with David Greenbaum, a top Vornado executive.

The opinion advises Mr. Doctoroff to recuse himself from any discussions between Bloomberg L.P. and Vornado for one year from the date of the conclusion of the Moynihan Station negotiations, and from all dealings involving Vornado or Bloomberg L.P. in any of the other projects addressed in the ruling.

Read “Ex-Official Cleared to Continue Work on Big City Projects,” in New York Times

Read "Mayor Names New Point Person for Moynihan"

Today Charles Bagli reports that Morgan Stanley, the anchor tenant for Tishman Speyer’s bid, is backing out of a plan to build a new headquarters on the Hudson Yards site. According to the article Morgan Stanley is concerned the new tower will not be ready in 2013 when its current lease expires. Bagli says “Morgan Stanley’s move is the latest shadow to fall across the anticipated billion-dollar sale of the development rights over the railyards, and another indication that the project may not proceed as quickly as city officials had hoped.” The article also contains more details on the bidding process:

“The winning bidder will have to put up $20 million immediately and complete a final contract within four months, when it must make a $100 million down payment. The transportation authority expects that it will take 18 months after that to prepare the property for construction, and two to three years and about $1.5 billion to build platforms and foundations over the railyards.”

“Everyone’s hoping that by the time you need to finance it, the market is back to normal,” said one bidder

Read “Morgan Stanley Retreating From Railyards Development,” by Charles Bagli in the New York Times

Read about a plan to eliminate the working railyards and run a shuttle between Hudson Yards and Penn Station in "Does New York Need the West Side Railyards?"

Last week, we received two detailed comments challenging George’s assertion that New York should lose the West Side Yards. Here is his response:

Typically, commuter rail lines have yards at their outer terminals in the suburbs, where trains are dispatched to the central business district, and yards close to the core, where cars are stored midday. Rapid transit lines, on the other hand, like our subways in NYC, have a single yard for each rail car. Trains might leave a yard in Brooklyn and end up in the Bronx, but no cars are stored in the center of town. Land is just too valuable. Newer rapid transit lines, with relatively long routes like those in Washington, DC or San Francisco (BART) offer much more frequent service all day long, and store rail cars that are not needed for this higher level of service in the same yards where they are kept overnight.

Much of the LIRR is like a long distance rapid transit system. Yet it is run like a 19th century railway, with far less service in the middle of the day than is need. This should change. The suburbs are not just homes for Manhattan-bound commuters, but are busy economic centers with travel needs all day long.

By keeping more trains in motion all day long, fewer mid-day storage spaces are needed in the center of the city. With the very high cost of building decks over yards, the need for these spaces can be seriously questioned. In my analysis, it looked like moving rail cars back to yards further east would increase operating cost by $8.2 million per year, or even less if more frequent service were operated all day long. This is a small price to pay to avoid spending a billion dollars or more for decks over the rail yards.

In 1987, when tracks that were needed to reach the yards were placed in service, they were helpful in making the northern portion of Penn Station into a thru-station increasing its capacity. This feature would be retained even if the yards are closed, since trains would continue to a two-track station that would be retained to provide access to West Side
development sites.

Finally, storing trains overnight in the center of the city, sending them empty to the suburbs to fetch passengers and then doing the same thing at the end of the day is costly. If rail yards cannot be built in the closer in suburbs, then the solution is to increase the utilization of the bi-level, dual-mode locomotive-hauled fleet which can be stored in existing underutilized yards much further to the east. These trains could be operated as thru-trains between points in Long Island and points in NJ. This need not wait for generations, but can be put into place over the next two to three years. This does require institutions to cooperate. Short of a full merger of all three commuter rail lines that serve the region, inter-operability agreements can be accomplished where the political will exists to press operators to move forward. With NY and NJ facing severe fiscal constraints, now is the time for agencies to work toward common solutions that save cost and improve service.

The time for the LIRR West Side Yard has come and gone. The stakes are too high to preserve the status quo!

What do you think? Please send us your comments and questions for George Haikalis.

George Haikalis believes the LIRR’s West Side Yards, opened in 1987, were not necessary in the first place. In his view, the MTA should eliminate the yards, but keep one platform with two tracks to run a shuttle on the existing tracks between the Hudson Yards development and Penn Station. This would eliminate the need for the $1 billion deck over the yards and significantly increase the value of the land by adding a link to the region's rail hub.

Haikalis is a civil engineer/transportation planner who co-chairs vision 42, a citizens initiative advancing a plan for an auto-free light rail boulevard on 42nd St. which is sponsored by the Institute for Rational Urban Mobility, Inc. (IRUM), a NYC-based not-for-profit corporation. IRUM also hosts the Regional Rail Working Group, an informal collaboration of rail advocates from the NY-NJ-CT metropolitan area.

He is here to answer your questions about transportation and the West Side, including Hudson Yards, Moynihan Station, and ARC, for the next two weeks. We'll call it “Ask George."

“For 77 years the LIRR operated without a West Side yard,” Haikalis said. “Their operations were such that the trains would either return to points in Long Island carrying passengers in the reverse peak direction, or would be operated without passengers to Long Beach, Babylon, or Jamaica where there was more yard space and they would stay until the evening peak. That added operating costs but nothing compared to the cost of building the yard, which was originally estimated at $100 million but turned out to be $230 million.”

Haikalis estimates that, in today's dollars, the added cost of returning LIRR cars to yards further east for midday storage would be about $8.2 million per year, small in comparison to the value MTA would gain from clearing the yard and selling it as raw real estate, with a good access link to Penn Station.

He points out that even with the Penn Station/Hudson Yards shuttle in place, the city's plan for the #7 line extension adds important additional connections to subway lines, particularly on Manhattan's East Side. Yet he is concerned that it may not be worth the cost. Soaring construction costs are slowing the pace of major MTA projects, including the #7, and the Fulton Street Transit Center has already been sent back to the drawing board.

Haikalis thinks the LIRR shuttle train would require little capital cost and could be placed into service quickly. “In this day and age if you were to build only a small two track platform and ran more trains in reverse peak hours to Long Island you would come out way ahead,” he said. Furthermore, linking Hudson Yards to the Penn Station transit hub furthers the establishment of a regional rail network in the city.

Please submit questions or comments on this and other transportation issues and Mr. Haikalis will be happy to address them.

Curbed reports that Brookfield Properties has announced plans for the site between the Farley Post Office and Hudson Yards (31st to 33rd Streets and Ninth Ave to the Lincoln Tunnel approach). According to a Bloomberg story, “Brookfield will start constructing a platform over the rails in June, and three acres and 5.4 million square feet of fresh new office and mixed-use develop space will be created. The $600 million project has been dubbed Manhattan West, and the platform is expected to be completed in late 2010. The first tower could be finished by 2013.”

Curbed: “Brookfield Births Manhattan West on Hudson Yards Doorstep

The New York Sun has a story on the push to create a historic district in the area south of Hudson Yards (25th to 28th Streets and Tenth to Twelfth Avenues). A spokesperson from the LPC says a hearing could come in spring. The proposed district contains many significant warehouses including the New York Terminal Warehouse Co.’s Central Stores, the Starrett-Lehigh Building, and the Baltimore and Ohio Railroad Company Warehouse.

”New Push May Hinder West Side Development,” by Peter Kiefer in The New York Sun

The Real Deal’s excellent recap of last night’s panel on the Far West Side contains this update on Moynihan Station:

"We are planning a large public roll-out on this project soon," Empire State Development Corporation spokesperson Warner Johnston told The Real Deal, "but we are not planning to share designs until later this year."

What is a public roll-out of a $14 billion civic project and development without designs? As the New York Times recently editorialized, "If such negotiations must continue behind doors, that still does not mean the state and the developers can delay letting the public see detailed plans and proposals. Veteran commuters deserve some hope that the new Moynihan complex is not just another urban fantasy."

The story also quotes Anna Hayes Levin of Community Board 4 who “said that the public needs to see concepts for Moynihan Station before Hudson Yards can sensibly proceed.”

Meanwhile, the Rail Yards Blog lists the big West Side projects and predicts: “Chances are high that these projects will shift, scale back, or possibly fall through completely. This development burst is in its infancy, so it’s crucial that the public stay informed and demand accountability in both the planning and funding of these major projects.”

And it includes this quote from former MTA head Richard Ravitch:

“Until Moynihan Station is resolved, there will be a serious impediment to development on the whole West Side.” Expansion of the station would promote natural growth of Midtown by adjacency, he explained, rather than starting with large commercial developments on 10th and 11th Avenues. He encouraged the MTA to hold off plans for the Rail Yards until Moynihan Station was settled.

Read ”Former MTA head: Moynihan Station confusion threatens Hudson Yards, by Alec Appelbaum in the The Real Deal

Read “MCNY Panel Calls for West Side Development Oversight, Funding Transparency” at Rail Yards Blog