REBNY: Build The Subway Station

The developers understood that the station would be built. It was part of the rezoning plan. The area is the last un-developed land in Manhattan. Private money has already started building residential towers and commercial office buildings. $15 billion dollar buildings. The city came up with the $2 billion to build the subway. There have been many compromises already. The real estate industry is so eager to see plans for it resurrected they're willing to provide some cash, say $50 million of the $800 million cost.

IMO The problem is the MTA. It was never a priority for the transportation authority, which builds, operates and maintains the city’s subways and commuter rail operations. They are a state agency that mis manages money and makes bad investments so they just decided to scrap it. The state and MTA have budget problems. The city is in much better financial shape than the state.

(a little history)

The MTA owned the land. A pet project of former mayor Rudy Giuliani and current mayor Mike Bloomberg was to build a west side sports stadium. The MTA decided to sell the Hudson Yards to The Jets for $100 million for a Jets Stadium even though Cablevision the owner's of Madison Square Garden offered more. The stadium was Mayor Bloomberg's centerpiece for the city's bid for the 2012 summer Olympics.

Cablevision and the strap-hangers sued claiming the MTA would have hundreds of millions less for new subways, buses, commuter railroads if it sold below market value. The deal was killed by the state legislature in Albany.  The MTA said the appraised value of the property is about $923 million.

A few months later the city offered to pay the MTA $500 million to develop the west side rail yards the proposed site of the Jets Football Stadium. The offer was made by Mayor Bloomberg to MTA chairman.

Eliot Spitzer the Attorney General who was running for Governor said the bid is grossly under market and NYC is attempting to steal the Hudson rail-yards for $500 million. The city's offer was more than twice what the Jets were willing to pay a year earlier. The mayor said it is a fair price that reflects the market value and cost of developing a platform and the city would shoulder several costs.

The Mayor and the city upped their bid and offered $200 million more for air rights - over the eastern half of the rail yards. The property was appraised at $1.5 billion a few years ago.

Then a whole new deal to develop the land with residential and commercial developers was on again and off again. The MTA is always in the middle. The MTA called off the first deal with Tishman Speyer Properties to develop skyscrapers, apartments, and parks over the 26 acres of railroads along the Hudson River. Negotiations ended over zoning disputes but the mayor said the disagreement is just a typical snag that big-money deals fall into.

Bloomberg said the 7 line will be extended to the West Side yards, and he's hopeful the zoning issues will be ironed out. That was back in 2006. He did come up with the money for the subway.

I believe the problem with private money building the station is they don't want to own and operate a public subway station.

I bought an apartment in a new building back in 89. The developer built a new subway station so he could build a 23 story building in a neighborhood zoned for only 20 stories. He left the tenant owners (shareholders) with the subway station. It was outlined in the original offering plan. When the owners took over the board we were stuck with the liability of managing and operating a subway station. Just last year 20 years later we settled a lawsuit with the city over the station. We are still paying for it. The whole neighborhood/public uses it but my building (a private corporation) owned it. We didn't get any tax abatements either.

Dan, Lol, I know but it's worth it.

Actually we're asking the federal government not people from Kansas or Nebraska. NY pays much more in federal taxes than we receive in federal spending. The feds will be paid back in increased tax revenues from the economic development. Kansas and Nebraska receive about the same in spending as NY. Hopefully Kansas and Nebraska will receive Farm Aid from the stimulus bill.

States with higher incomes pay much higher federal taxes. Beneficiary states like Mississippi, Virgina, New Mexico, Florida, Alaska, North Dakota, Georgia and many other (mostly red states) receive more in federal spending than they pay in federal taxes per dollar.

New York City became the most popular tourist destination in the country in 2009. More than 45 million visitors in 2009, 46.7 million expected in 2010. All those tourists from Kansas, Nebraska and the rest of the country will be using and enjoying NYC's infrastructure paid by NYC taxpayers.

Dan, I'm certainly no farm expert. I didn't mean subsidies such as paying farmers not to farm. I meant investments in agriculture infrastructure like water sytems.