Today Governor David Paterson made a bold statement in support of the construction of Moynihan Station when he announced conditions related to the future of Moynihan Station at New York Building Congress forum. He emphasized the critical importance for the project to emphasize infrastructure improvements and to that end announced that the Port Authority of New York would be taking over the project.
The Governor said that while New York City and State are in a difficult economic climate, fiscal responsibility is not just about reducing spending; it’s about making wise investments. Throughout New York State’s history, the government has moved ahead with infrastructure projects during times of financial insolvency. For example, the state was facing a deficit for seven of the ten years it took to construct the Erie Canal and the Lincoln Tunnel, George Washington Bridge and the Independent Subway System (IND) were all constructed during the Depression.
New York City was in the midst of a fiscal crisis during the construction of the historic Penn Station. “By any measure the 20th century was the New York Century. We entered it as a burgeoning metropolis and we left it as the greatest and most powerful city in the world. We can make the 21st century the New York Century as well, but only if we invest wisely in our infrastructure.”
Paterson said the Federal government must put together a plan for the nation’s infrastructure so we may reduce our dependency on fossil fuels and avoid catastrophic disasters like last year’s bridge collapse in Minneapolis. He also decried the Federal government's “starving” of Amtrak and reduction of slots at the city’s airports. The Governor said that we must bolster the rail options between Washington DC, Boston and other cities within 300 miles of New York City. Rail is the most fuel-efficient way to move people,, and it is critical that we lighten the loads of our airlines and on our highways. In the absence of a Federal transportation plan, Paterson said the State must develop its own plan.
“It is fitting that 100 years after the building of the first Penn Station, we assess our infrastructure priorities and establish clear conditions for the future of transportation in our State,” said Governor Paterson. “If we are to realize our full potential for growth in the 21st century, then we must look to increase our rail capacity. That is why today I have outlined the conditions that I believe must be met if we are to move forward with the Moynihan Station project. Moynihan must be more than a beautiful station; it must move more people more efficiently.”
The Governor’s specific conditions for Moynihan Station development include:
1. Ensuring that the Moynihan Station project increases transportation capacity by physically expanding the number of tracks and platforms and instituting operational changes by Long Island Railroad, New Jersey Transit and Amtrak.
Paterson announced that he was asking the leadership of the three railroads to report to himself and Governor Corzine on how they planned to work together.
2. Coordinating the development of Moynihan Station in tandem with other major development projects including New Jersey’s Access to the Region’s Core (ARC) which is the first crossing under the Hudson in 50 years;
The Governor made it clear that it would be a formidable challenge to ensure that the project will be coordinated with major infrastructure projects like ARC and unifying the three transit systems of Amtrak, Long Island Railroad and New Jersey Transit. “This is why we want the Port Authority to take over the leadership in terms of constructing Moynihan Station, and what we are really saying is that with such major development occurring, there has to be coordination,” the governor said.
3. Taking necessary steps to ensure that the project also helps to revitalize the surrounding community.
While the Governor acknowledged the importance of making Moynihan Station a Gateway to New York city and catalyst for development on the Far West Side, he said first and foremost this is a transportation project.
“Increasing our transportation capacity is an important step, but it is only a one step. We must ensure that we carefully coordinate the improved capacity with other major development and infrastructure projects, which is why today, I called on my Deputy Secretary for Economic Development, and Infrastructure to convene all of the project’s partners from both the public and private sectors to discuss the challenges they face,” Governor Paterson continued. “Deputy Secretary Gilchrist will report back to me with an assessment of these challenges and potential solutions.” “By any measure the 20th century was the New York Century. We entered it as a burgeoning metropolis and we left it as the greatest and most powerful city in the world. We can make the 21st century the New York Century as well, but only if we invest wisely in our infrastructure,” added Governor Paterson.
Read Governor Paterson's press release.
Read Paterson Invokes New Deal in Calling for Fresh Moynihan Plan by Eliot Brown in The New York Observer.
Read Paterson Gives Moynihan Another Shot by Matthew Schuerman of WNYC.
Read Paterson appoints aide to look into Moynihan by Theresa Agovino of Crain's New York.
After a few quiet weeks in the world of Moynihan, the Farley Post Office emerged unscathed from a two-alarm fire on Tuesday night and Steve Roth, chairman of Vornado, and Steve Ross, chairman of Related – the Moynihan Venture tag team – spoke about the project at a real estate breakfast this morning in New York. The Venture's latest scheme is to get the Port Authority to buy the Garden from the Dolans and liberate the coveted air rights on the arena site. Eliot Brown of the Observer has this report:
In case there was any doubt, Steve Roth and Steve Ross really want Madison Square Garden to move.
This morning, some 13 weeks after Madison Square Garden announced it was renovating and staying in place (i.e. not moving), the developer duo professed, once again, their eagerness to see the Paterson administration pick up the ball and move forward with the large-scale Moynihan Station plan. The plan, in its most recent iteration, would involve the state using Port Authority money intended for regional transportation projects to buy the Garden and its air rights from the Dolan family—that is, if they’re willing to sell (the Dolans have expressed no interest and are moving forward with the renovation).
Mr. Ross is the chairman of the Related Companies and Mr. Roth is chairman of Vornado Realty Trust, the two designated developers in the project that would redo Pennsylvania Station.
Why not let the dream die? The air rights that would be unleashed from the Garden moving, as Mr. Roth reminded the crowd at the Portfolio real estate breakfast at the Four Seasons Pool Room, are of great value.
“Since Vornado owns all the property around it, and half the air rights above Madison Square Garden, obviously, it’s ‘Come to mama,’” he said.
Some other tidbits from the breakfast:
• Mr. Roth was candid as to why he wants the Garden to move to Farley: It’s the only other place they’ll consider besides their current site, he said. “We don’t care if they move to Iowa. ... They can move as far west as they want.”
• Apparently the plan to move the Garden to the rear of the Farley building was the brainchild of Mr. Ross, at least according to Mr. Roth.
• Mr. Ross likes the Port Authority for reasons other than just its money. As he put it, “If the Port Authority does it, there isn’t any additional approvals, and you don’t have to go to the state or Shelly [Silver, the Assembly speaker] to get approvals to make it happen, so I believe that the governor will see it that way.”
• Mr. Ross and Mr. Roth seemed to differ some in how strongly they feel about pushing the larger plan. Mr. Ross said he was optimistic that the whole thing would come together, (rating its chances 8 out of 10). Mr. Roth has previously trumped a scaled-down “Plan B,” though talk of that was absent today (at the end of the discussion on Moynihan, Mr. Roth put the chances of everything coming together at 7.5 out of 10 … though he also added later that the reason the two were so optimistic was there was a tenant in the room, looking squarely at S.I. Newhouse, whose Condé Nast is on the hunt for a new office tower.
Today at a Crain’s breakfast, Deputy Mayor Robert Lieber expressed interest in the Port Authority taking over Moynihan – “they have money,” he said. This comes one month after Mayor Bloomberg deemed it a “horrible idea.” Crain’s has a recap and video.
The New York Observer reports that Governor Paterson has nominated Stanley Grayson, the former deputy mayor under Koch, to take the place of Bruce Blakeman, a Pataki administration appointee, on the Port Authority’s governing board. The governors of New York and New Jersey each appoint six members to the board for overlapping six year terms. Last month, Paterson appointee Chris Ward assumed the head role at the agency, which may take over the Moynihan Station project.
Statement from the governor's office, courtesy of the Observer:
Stanley E. Grayson has been nominated as a Commissioner of the Port Authority of New York and New Jersey. Mr. Grayson is currently the President and Chief Operating Officer of M. R. Beal and Company, an investment banking firm focused on public finance, corporate debt and equity, fixed-income sales and trading, and financial advisory services. Prior to joining M. R. Beal in 2002, Mr. Grayson was a Managing Director and Manager of Prudential Securities Public Finance Department and member of the firm’s Operating Committee where he oversaw the public finance activities of Prudential Securities. Prior to joining Prudential Securities, from 1990 to 1996 Mr. Grayson was a Vice President at Goldman Sachs in the Municipal Bond Department’s Infrastructure and General Banking Group.
Prior to his investment-banking career, Mr. Grayson held several senior positions within New York City Government, including Deputy Mayor for Finance and Economic Development, Finance Commissioner and Chief Executive Officer of the New York City Industrial Development Agency. Mr. Grayson began his legal career in the Law Department of the Metropolitan Life Company.
Mr. Grayson serves on the Board of Directors of New York Catholic Charities, The Faith Center for Community Development, The Alliance for Downtown Business, The New York City School Construction Authority and is a Trustee of The Churchill School and Center. He received his BA from the College of Holy Cross and his JD from the University of Michigan Law School.
As a Commissioner of the Port Authority of New York and New Jersey, Mr. Grayson will not receive a salary. This appointment requires Senate confirmation.
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.
Today, Peter Kiefer reports that “Senator Schumer's plan to give the Port Authority of New York and New Jersey control of the redevelopment of Pennsylvania Station is being viewed as an end run around the Democratic speaker of the Assembly, Sheldon Silver, and the state Legislature.” Excerpts below:
As a bistate agency, the Port Authority is not subject to the Public Authorities Control Board, which gives final approval on financing for public projects in New York State. In recent years, Mr. Silver has controlled the PACB, and has used it to wield influence over a number of development projects — most notably to kill Mayor Bloomberg's plan to bring a new Jets stadium to the Hudson rail yards, and Governor Pataki's plan to convert the Farley Post Office building into Moynihan Station.
In the past, Mr. Silver has used his PACB vote to wrest concessions for his district, Lower Manhattan. Less than two weeks before Mr. Silver cast his vote to derail the Jets stadium project, Messrs. Pataki and Bloomberg announced plans to spend more than $800 million on a slew of projects for Lower Manhattan…
Proponents of the transfer say the Port Authority could use the $2 billion that is available in its capital plan to plug a public funding gap and get the project back on track. At the end of 2007, the Port Authority, which controls the area's ports, airports, and most New York City toll bridges and tunnels, reported gross operating revenues of about $3.2 billion.
Regarding Assemblyman Brodsky’s hearing on Friday:
The chairman of the Assembly's Committee on Corporations Authorities and Commissions, Richard Brodsky, opposes the Port Authority taking the lead role on the project, and is said to be addressing the matter at a hearing on Friday.
Mr. Brodsky said the problem stems from the state of New Jersey's refusal to alter the governing structure of the Port Authority. "There is no statute that can control Port Authority behavior," he said.
A spokesman for Mr. Silver, Daniel Weiler, said: "The speaker's concern is that before jumping on new projects, we need to see existing projects come to conclusion."
Mr. Schumer's office would not respond to a request for comment.
"The Moynihan Station is a vital project and we are pleased by the discussions of confidence in our role as a builder in the region. But any potential role is up to the board and consultations with the governors," a spokesman for the Port Authority, Steve Sigmund, said.
Today, the Port Authority’s board of directors is expected to officially appoint Chris Ward as the agency’s new executive director.
In an editorial in today’s New York Post, Senator Schumer says that “the next best steps to prepare New York to maintain its preeminence are to overhaul Penn Station and construct a grand Moynihan Station, spurring a Grand Central-like district with 8 million new square feet of office space.”
So how do we develop the Penn Station district, given all the recent setbacks and pall of doubt that has descended on big-development projects? I believe there are four steps we must take.
* First, project management should be given to the Port Authority. A lack of expertise and money has been the bane of this project, and the Port Authority has both of these in abundance. The agency should use New York's $2 billion share of Port Authority money to make it happen.
* Second, even if Madison Square Garden doesn't move, we can drastically improve Penn Station by relocating 200,000 square feet of Amtrak and NJ Transit operations offsite. Further, MSG has said it would be willing to move the WaMu Theater, which would bring daylight into the train station.
* Third, the money to achieve Sen. Daniel Patrick Moynihan's vision of transforming the Farley Post Office into a magnificent train station is there. One last step, government approval, is needed to move forward. So let's start building.
* Fourth, we should move ahead with creating a special Penn Station zoning subdistrict, allowing for more building and giving more development rights to those who make a contribution to the transportation infrastructure. Additionally, Amtrak and NJ Transit should leverage their real-estate holdings to create new commercial buildings.
Let me be clear: We should develop the Penn Station area and the Far West Side, not one or the other. But the key to developing 10th and 11th avenues in the 30s and 40s is kick-starting Penn Station development; a new transit hub is vital to support and sustain the major development we all hope to achieve in the Penn Station area and beyond. As it's unlikely that we'll see commercial development on the Far West Side for several years until the new No. 7 line is operational, we need to get the Penn area moving first.
In an editorial today, the Daily News says “there are hopeful signs Gov. Paterson is starting to focus on projects that would remake a huge swath of midtown.”
What's more important right now is that Paterson is trying to revive a development that would be a major boon to New York - provided the project is designed so as to maximize public benefits and minimize public costs.
Thanks to a rezoning that permitted construction of 5.5 million square feet of office space, the developers and Cablevision stood to reap handsome rewards as long as they invested in a new train station.
But no one ever settled how much the builders would pay, how much the public would kick in or even what kind of station they planned to offer. Still, it was clear that their most magnificent design was - and is - unaffordable at almost $3 billion.
So, first things first for Paterson, Bloomberg and all involved. As they seek to entice Cablevision back to the table, they must determine whether it is possible to design a station that provides major transportation improvements at minor public expense.
Aides say that's Paterson's goal. Excellent. Holding to it will mean refusing to simply tap into $2 billion that the Port Authority has set aside for transportation projects in New York. The public needs the biggest bang for the buck. Let's see what it is.
Yesterday, Paterson said he still has not mind up his mind about who should be in charge at Moynihan Station and reiterated his call for a summit of the key players. Newsday reports:
Paterson agreed with the rationale behind Port Authority control of the halted project - a position Mayor Michael Bloomberg bitterly opposes. But, he said, he hasn't decided if that agency is the best choice to lead the Penn Station redevelopment project. The Empire State Development Corp. is currently the overseer.
Paterson said he is open to a funding solution that would lead to actually moving dirt at Moynihan as well as at other financially troubled developments, including the Hudson Yard site.
"We've gotta take all those projects, bring the stake holders in, have a conversation about what is working and what isn't working and show leadership," Paterson said after a news conference at his executive chambers in Manhattan.
Yesterday, Governor Paterson endorsed Senator Schumer’s proposal to give the Port Authority control over Moynihan Station. “I think it’s a good idea,” he said. “The Port Authority is the area's transportation vehicle. The Moynihan Station is a transportation project.” (Watch a video of the press conference here)From the Daily News:
This, of course, pits Paterson against Mayor Bloomberg, who was less than thrilled with Schumer's rejection of a key part of the mayor's plan as "the goofiest thing" he had ever seen. Bloomberg retorted that perhaps Schumer should mind his own business.
The governor insisted the disagreement over Moynihan Station "isn't a personal feud," and praised Bloomberg for voicing concerns now rather than at some point down the road, adding: "He did what public servants should do."
Paterson said he will "weigh" Bloomberg's concerns as he works to reach a final decision on Moynihan, but he also called Schumer's proposal "a good idea."
Paterson also again defended his decision to do away with the two-chair structure Eliot Spitzer created at ESDC - a move that has brought him considerable grief from upstate business leaders and editorial boards.
The governor said he doesn't have anyone "teed up" to run the development corporation; he has appointed a commission to help him find someone.
The Post has an entertaining graphic called “The Fight for Moynihan Station.”
The Observer is running two stories today suggesting that Governor Paterson is poised to tap Chris Ward as the head of the Port Authority, the agency that he proposes to oversee the development of Moynihan Station. According to Eliot Brown, Christopher O. Ward, currently the managing director of the General Contractors Association of New York (member of the Friends of Moynihan Station), could be appointed Friday afternoon.
According to Em Whitney in “Paterson Sympathizes With the Dolans Over M.S.G. ,” Paterson is moving the project to the Port Authority because that agency “has a better chance of getting it done quickly, and I hope that we can start construction quickly enough that we can reverse plans that exist.” The reversal of “plans” he refers to are MSG’s plans to renovate their current arena instead of constructing a new arena in the Farley Post Office. MSG staying in place prevents the construction of a new Penn Station. According to the article, it seems that the Dolans pulled out of the project because of the pace of development, “I think the Dolans finally got fed up with the delays,” Paterson said.
While it may be a little early to be optimistic, this move could be good news for the Moynihan project. The Port Authority can provide additional funding and has experience in completing large complex transportation projects. We will certainly have more information and analysis of the possibility of PANYNJ taking over the project as it develops.
Read “Gov. Paterson Ready to Tap Chris Ward as Port Authority Director,” by Eliot Brown for The New York Observer
Read “Paterson Sympathizes With the Dolans Over M.S.G.,” by Em Whitney for The New York Observer