Tag Archive for #moynihanstation #pennstation #madisonsquaregarden #newyorkrealestate

Make it Even Bigger

With yesterday’s announcement, Governor Cuomo brought a needed sense of urgency to the redevelopment of the Farley Post Office and Penn Station in Manhattan, a now nearly twenty year saga most notable for its total lack of progress.

It’s a great start, and an ambitious plan, but not ambitious enough. Here’s what should be on the table.

Evict Madison Square Garden. Back in 2013, the City Council wisely declined to grant MSG management a special permit to operate in perpetuity, and instead gave another ten years. The clock is ticking, and now it’s time for the Council to close ranks, dig in, and make it clear that MSG has to find another site, build it out, and vacate. No extensions.

Tear the Garden Down. It’s old, it’s outmoded, and the fact that a even Newark has a better-designed arena should be a regional embarrassment. It also sits on top of the busiest, most important train station in the country. No half measures here, no insertion of a glazed entry in place of the theater. Tear it all down and build a new, state-of-the art railway station that will serve the region for the next century or so.

Dump Moynihan Station. It’s a seductive repurposing of a building, a relic of 1970s design thinking that appeals only to the preservation/adaptive reuse crowd. For the rest of us, it’s a poorly conceived plan that would never be quite right. Not even Amtrak wanted any part of this one; even they didn’t want their waiting room a block away from the train platforms. If the project had been done twenty years or so ago, when first proposed, it would have been here already and we would have seen just how flawed the concept it. By living with it.

Move Madison Square Garden. Here’s a radical proposal: tear down the west half (or more) of the Farley Post Office and replace it with a new, up-to-date Madison Square Garden with all the amenities and features that a 21st century arena needs. Preserve the magnificent portico and principal façade on Eight Avenue and incorporate it into the new complex (rail and entertainment) in a creative way befitting the times we live in. As for the west half, yes, McKim, Mead & White designed it, but it’s a loading dock for heaven’s sake. Let’s preserve what’s worth saving and remake the rest in our contemporary image.

OK, how do we pay for all this? Fair question. The knee-jerk reaction these days seems to be to get a private sector developer onboard, give them a piece of the action, in this case the retail space, and turn them loose. The problem is, developers, like all business people, have their own agendas, which are usually not aligned with anything resembling the public good. The other problem is that this approach didn’t work with Related and Vornado in control of the Farley Post Office project, which is why they are out and a new RFP is coming. The alternative is Federal money, and lots of it; there’s a very strong argument that this is a national growth driver that deserves Federal money. Add to that a massive state bond financing, and a requirement that the private developer selected to build all this should be able to finance whatever piece of the action it gets upfront, and we should get there. You can read the NY Times article here http://nyti.ms/1THfP90.

Time to think really, really big. Maybe even huge.

Tunnel Rats

Yesterday, none other than the New York Times editorial board got on the train to urge the construction of new rail tunnels under the Hudson to alleviate the strain on the existing tunnels, which are around 100 years old and in dire need of replacement, or augmentation, or both. It’s about time.

Readers of Naked Urbanism already know the back story: how Chris Christie torpedoed the ARC project back in 2010 that would have addressed this now urgent situation. No matter what he said at the time, he was angling to be President, and used this issue to vault onto the national stage, playing as he was to the national Republican Party to burnish his credentials as a slash-and-burn rock ribbed conservative, the needs of his constituents be damned.

Clearly, the New York metro area contributes much more to the national economy than its size would suggest, and Republican politicians across the country would ever admit. But it’s true. We have more high-value, high income jobs here per capita than anywhere else, save perhaps the Bay Area/Silicon Valley, and I would suggest that our distribution is more diverse than theirs. So this is arguably both a local and a Federal matter.

Now that Christie’s performance to date in the Republican circus makes clear that his Presidential aspirations were far-fetched at best, and delusional at worst, it’s time to get back to reality and face the music. But how to pay for this?

Let’s start with how the ARC, a $10 billion project, was to be financed. The Federal government committed to 51% of the cost. The balance was to come from New Jersey Transit, the state of New Jersey (until Christie pulled the plug), and the Port Authority.

So if the Feds were ready to step up for 51% a few years back, there is no obvious reason why they wouldn’t do at least that much again. The revised estimate is now $20 billion, so there should be $10 billion right there. New Jersey will benefit tremendously from this project once it is done, and so should step up, too, for big money: According to a study done by the Regional Plan Association for the ARC, New Jersey can expect to see another $375 million in new tax revenue. If New Jersey contributed even a portion of that windfall, say $200 million, which would be recurring income, mind you, that would cover the debt service on nearly $4 billion in public finance at 5%. That would get us to $14 billion. New Jersey Transit should also take a piece, as should New York State, since New York will benefit from is a precedent to financing projects like this. At least on the back of the envelope, this job can be paid for, and we should start it immediately.

Chris Christie ceded the leadership on this one five years ago as he prepared for his quixotic quest on the backs of his constituents. Senators Menendez and Booker from New Jersey seem to absent on this one, Menendez possibly distracted by his indictment last April, and Booker likely wearing out his thumbs tweeting. So Chuck Schumer has rightly taken the lead here; the spectacle of spanking a deserving Republican a mere side benefit to this important project.

Scrap Moynihan Station

New York State’s recently announced plan to sell development rights associated with the Farley Post Office site, and the resulting controversy, brings the whole Moynihan Station project into a new focus. I’ll get to New York’s proposal later.  More to the point, we should take the opportunity to do the right thing and scrap the Moynihan Station project altogether.

Twenty years ago, the idea of converting the McKim Meade &White-designed Farley Post Office into a replacement for Penn Station was a beguiling concept.  What better way to right the grievous wrong that is the demolition of the magnificent McKim Meade & White-designed Pennsylvania Station, than to replace it with a new station in another magnificent McKim Meade & White-designed building that, providentially, sits atop the railroad tracks?  And so the project began.  And stalled.  And re-started.  And stalled.  Again and again and again.  The problem was, and is, that it isn’t really a good project.  Conceived as it was in an effort to recapture something that is gone forever, it can’t really be much more than an old post office that someone converted into an approximation of a transit hub.

If it had been a good project, and if there had been real support for it, it might have already been done.  And had it actually been done, soothed by the knowledge that we had righted some historic wrong, we would have put up with the limitations and deficiencies of the plan, best expressed as recently as last year by David Gunn, who used to run Amtrak, when speaking to the New York Observer:

“From a transportation point of view,” Mr. Gunn said, “it makes no sense.” For         passengers coming from the 1/2/3 trains, “what the Farley Building does, is make you walk from Seventh Avenue all the way across Eighth Avenue. You’ll have to go under the Eighth Avenue subway, then climb up to the [new] head house, which is to the west of Eighth Avenue, over towards Ninth Avenue. And then, you walk back to where the train is! The trains are still going to be between Seventh and Eighth avenues.” For passengers arriving at Moynihan Station via the IRT Seventh Avenue Line, Mr. Gunn said, “they’ve gotta walk almost a mile.”

But in the twenty years that the Moynihan Station project has lingered in development limbo, things have changed.   The  best thing to do today is to abandon  the Moynihan Station project altogether and devote our resources and energy to relocating Madison Square Garden and building a completely new Penn Station in its place.

It’s not as farfetched an idea as it seems.  This is, after all, New York.  And thanks to Michael Kimmelman of the New York Times and the Municipal Art Society, a concerted lobbying effort last year got the City Council to deny Madison Square Garden, which was unceremoniously dropped on top of what is left of the old Penn Station, the license it sought to operate on the site in perpetuity.  Instead, MSG got another ten years, and a pretty clear message:  move Madison Square Garden.

There are ideas and schemes aplenty as to what the new Penn Station should look like, courtesy of the MAS and the Regional Plan Association, who asked four local architects what a new Penn Station could be (my point is not to critique or advocate one design scheme over another, but if you really want to see them, they can be found here:   http://bit.ly/1i9wAsW).  At best, they are all conceptual sketches albeit very elaborate and seductive ones; the real design will emerge from the hard work of talented people.  But the weakest and least resolved of the bunch is far better than what is there today, and far superior to an adapted post office.

The opportunity here is that, a little more than a hundred years since the original Penn Station opened to the public, we have a the chance to rebuild to build the world-class transportation hub that New York should have, and get a twenty first century arena in the bargain.  It will take a tremendous effort but it will be worthwhile.

There are a lot of ideas out there as to how to get this done, and it will take a full court press.  Two obvious obstacles loom large:  how to pay for a new Penn Station, and where to put Madison Square Garden.

Because none of this is possible without money, let’s start there.  In July of 2013, the Municipal Art Society released a report that proposed the creation of a revenue capture district, kind of like a BID, which would collect payments from property owners in the area, actually payments in lieu of taxes (PILOT).  These PILOT funds would be the income stream that pays down bonds issued to fund the demolition of MSG and the construction of the new Penn Station.  MAS contends that the area property owners would reap the benefits of increasing property values and rising rents, and so should sign on.  In the abstract it makes sense, but area property owners, in whatever the final configuration of this new district will be, must be lobbied and made to understand the need for this and the benefits to them; otherwise it’s hard to imagine a bunch of NYC landlords leaping at the opportunity to pay yet another recurring cost.  In addition, City and State approval of this new revenue capture district would be required.  The MAS report also recommends that the area be rezoned:  both Madison Square Garden and Penn Station are already in the Hudson Yards Special District and are subject to its regulations, which favor the creation of commercial space over residential at present.  There is also a City Planning proposal from 2007 that may be worth re-evaluating.

Then there is New York State’s latest proposal, which is to sell the development rights from the Farley Post Office to fund Moynihan Station. While it, too, is an intriguing idea, and certainly consistent with the new hypercapitalist concept that government should sell its public assets to the highest bidder, funding Moynihan Station is throwing good money after bad.  As an idea, it may also be premature.

As noted above, the Farley Post Office is in the Hudson Yards Special District, which was designed to foster the creation of 28 million square feet of new office space, 12.6 million square feet of new residential space, 1.5 million square feet of new hotel space, and 700 thousand square feet of new retail space. Development of the Hudson Yards district, by which I mean actual construction and execution of the plan, has really only gotten underway in the past year or so, as we crawl out of the real estate slump.  Of the 28 MM SF of office space the plan provides for, somewhere in the neighborhood of 4MM SF are either under construction or close to starting, and of the 12.6 MM SF of new residential space, only one new apartment building has actually been built so far.  All this tells us that it is early in the process, and that no one really knows what the actual demand, absorption rate, and pace of the buildout will be.  It may be more prudent for New York State to hold these development rights until we can see what the demand, and therefore what the real value of these development rights are.  Selling them today sets the State up to sell them too low.

There is also the issue of transferring those rights, whether they are sold today, or in ten years.  Transfers of development rights in the Hudson Yards Special District are governed by the regulations for landmark development rights transfers in the NYC Zoning Resolution.  As the regulations stand, these rights can only be transferred from a landmark site to a receiving site across a street, or diagonally across an intersection.  So, under the current rules, there is a very limited set of receiving sites, and therefore buyers, for these development rights.  While it would make more sense to expand the set of receiving sites, and therefore potential buyers, of these rights, that would require  amendment of the NYC Zoning Resolution, a proposition approached carefully under the best of circumstances.  Still, it is worth further investigation, and may be part of a strategy that calls for holding them in in abeyance, as a kind of backstop to other funding efforts.

Lastly, what to do with Madison Square Garden?  There are some potential sites within a few blocks of where it currently sits, each with its attributes, and each deserving of further study.

And, inevitably, what of the Farley Post Office?  Having rued the last generation’s demolition of Penn Station, and since we think we are more evolved, I believe it should stay in place and a creative new life imagined for it as the development of neighborhood picks up steam.

Time, however, is not on our side.  The fact that Moynihan Station has lingered for twenty years, despite the work of many, should tell us that ten years is a blink of an eye.  Relocating Madison Square Garden and building a new Penn Station are huge, complicated tasks that require focus and commitment from government at the City, State, and likely Federal levels; lobbying and advocacy from the preservation, design, construction, and development communities; and lots of money from every reasonable source possible.  It can, however, be the signature achievement of a new administration, and create a valuable new public benefit for the next century or so to come.