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Olympic Glory or Fool’s Gold?: New Yorkers Boo Stadium and Midtown Plan

April 24, 2004 by Administrator in Spring 2004

By Eugene J. Patron

Just a stone’s throw from Manhattan ’s famed Theatre District, the curtain has risen on one of the city’s major urban redevelopment dramas. The line of community and civic groups opposing the massive Hudson Yards plan runs around the block. Dreamed up under the administration of former mayor Rudolph Giuliani, the Hudson Yards plan gained a new impetus under Mayor Michael Bloomberg, the billionaire executive who wants to see the city’s Midtown office district grow to the west. The Bloomberg administration sees the west side as the city’s “last frontier.”

The Hudson Yards master plan would turn a 360-acre slice of Manhattan ’s west side into a new commercial and residential district twenty times larger than the World Trade Center site. At a price tag of at least $5 billion for the city (and untold billions more for private developers), the plan calls for 28 million square feet of Class A office space, 12.6 million square feet of primarily market-rate housing, an extension of the No.7 subway line, a near doubling in size of the Jacob Javits Convention Center and a ten-block network of greenspaces. At the center of this major new development would be a 75,000-seat stadium for the Jets football team, which would also be the centerpiece of New York ’s bid to host the 2012 Olympic Games.

Many residents of Hell’s Kitchen and Clinton, the two neighborhoods falling under the sight of the proposed Hudson Yards plan, think that traffic-snarled Manhattan is hardly the best site to locate a new stadium. Agreeing with them are the major Broadway theater owners, who fear a huge stadium at the doorstep of Manhattan ’s Theater District will produce endless gridlock.

Hell’s Kitchen Meets West Midtown

Members of the local community have responded by forming two groups to voice differing degrees of opposition to the current Hudson Yards plan. One, the grassroots West Side Coalition, opposes any large-scale development of Manhattan ’s west side and is determined that the curtain should come down on the city’s plans. The other, the Hell’s Kitchen Neighborhood Association (HKNA), has chosen to respond proactively and last summer drafted a plan of its own. As long-time Clinton resident and affordable housing advocate Joe Restuccia explains, the HKNA plan is not anti-development. It doesn’t, however, buy into the mayor’s dubious logic that developers need the inducement of a huge sports stadium to build new office and residential towers in Manhattan. “We want development that respects our neighborhoods and plans wisely for the city’s economy,” Restuccia says. “A West Side stadium just doesn’t fit that bill.”

Hell’s Kitchen, the core area affected by the Hudson Yards plan, was once a hardscrabble neighborhood of tenements, warehouses and factories. Today part of the neighborhood is quickly gentrifying, while many streets to the west are ensnared in a morass of pedestrian-hostile transportation infrastructure. Traffic crawls along the entrance ramps to the Lincoln Tunnel. Buses go in and out of the Port Authority Bus Terminal, and the area is dotted with bus parking lots. The largest of these monster facilities is the Metropolitan Transit Authority’s 23-acre Hudson Yards, which serves nearby Penn Station.

Atop Hudson Yards the city is proposing to put a platform. The city would pay $600 million for the platform and a retractable roof, the Jets $800 million for the stadium structure itself. The Jets want to build what Deputy Mayor Daniel Doctoroff insists will be not merely a stadium but a unique multi-use “sports and convention center.” When the Jets are not playing one of their ten home games each year, the stadium would supplement the exhibition space of the Jacob Javits Convention Center.

The Javits, located just to the north of Hudson Yards, is currently the fifteenth largest convention center in the country, at 720,000 square feet. The Hudson Yards plan calls for a two-phase expansion of the Javits to create a total of 1.3 million square feet of exhibition space. The Bloomberg administration insists that to compete with the very largest of convention centers nationally, such as Chicago and Las Vegas, New York needs to link an expanded Javits to the Jet’s hybrid stadium-convention center. No one really knows though how well a detached stadium will be able to fit into the convention complex and provide the kind of exhibition space trade show organizers desire.

The Plan for West Midtown

To allow for the millions of feet of office and residential space outlined in the Hudson Yards plan, the Department of City Planning (DCP) is proposing local zoning changes that in some places would do away with the Floor Area Ratios (FARs, which control the amount of building floor area that can be fit on a lot) —literally allowing real estate developers to reach for the stars if they so choose. The proposed zoning calls for lower densities close to the existing residential sections of Hell’s Kitchen, but a wall of buildings with the largest FARs (19-24) would essentially cut the neighborhood off from the Hudson River. Two new parks, each about a square block in size, are included in the plan, but they would really be bookends to the stadium.

One important question people in the neighborhood are raising is how quickly and to what extent the real estate market will actually show interest in this tremendous amount of new office and commercial space, especially at an untested locale. The Regional Planning Association estimates that the current Manhattan office vacancy rate is about 13 percent (representing 45-60 million feet of available space) and another 14 million square feet of office space is under construction.

Given that a vacancy rate under 9 percent is usually thought to be the signal that new space is needed, the Hudson Yards plan may be overly optimistic about the market’s appetite for new supply. Even when speculating on the long-term (20-30 years) need for new office and commercial space, the city should continue to strengthen the expanding central business districts in its outer boroughs, such as Brooklyn and Queens, rather than flood the market with more space in Manhattan, where building and infrastructure costs are much higher.

The Alternative Plan

The HKNA plan calls instead for a maximum of 20 million square feet of office space and holds out the possibility of mixing commercial and residential development, depending on how demand evolves. But the biggest difference between the city and community plans is that the HKNA eschews building a stadium over the MTA rail yards for expanding the Javits Convention Center south over the same site. Like the Moscone Center in San Francisco, a park would be built atop the Javits Center. And rather than allow a wall of large commercial and residential development to line the avenues that parallel the Hudson River waterfront, the HKNA plan places towers on the four corners of the expanded Javits site, with lower commercial structures between them on three sides. This leaves open the western side facing the Hudson River and would improve public access to the waterfront.

Some critics of the Hudson Yards plan have questioned the expenditure of $1.7 billion in public funds to extend the No.7 train a mere one mile to the doorstep of the new stadium. A light rail system could potentially serve the area better, with or without the stadium. The HKNA plan doesn’t rule out an extension of the No.7 line, but recommends that it be phased in if demand begins to exceed the capacity of other transportation options, such as bus and light rail shuttle service.

Affordable housing is another key issue. New York City has a residential vacancy rate of only 2.9 percent. Monthly apartment rents near the Hudson Yards site are already $400 above the city average. The city’s plan does not include any proposals to provide affordable housing to working people with modest incomes. Instead, it relies on standard, market-driven incentives such as the “80/20” program, which gives developers bonuses for providing financing for “affordable” units amounting to 20 percent of the total.

All told, when completely developed over thirty years, Hudson Yards is estimated to produce 1,500 units of housing available to people earning up to 60 percent of the area’s median income of $47,899 for a family of four. For a plan which will see the city assume over $5 billion in debt, that is a feeble accomplishment. Community advocates also stress that besides a greater number of affordable units, they want to see any new zoning include strong, anti-harassment regulations such as exist in the nearby Special Clinton District; there, property owners must satisfy a number of criteria before they can evict or terminate occupancy in the course of altering or demolishing a building.

The Bloomberg administration, citing the tight deadlines the city faces in competing to host the 2012 Olympics, has waved aside the idea of slowing down the planning process to tackle specific community concerns. Deputy Mayor Doctoroff has a carnival barker’s talent for teasing the public with the supposed big picture benefits of the city’s plan, heralding impressive figures such as the $2 billion annual revenue that Hudson Yards will supposedly generate by 2025.

Shaky Financing, Hidden Subsidies

What Doctoroff doesn’t say is that the city will have to spend billions of dollars (none of which it has on-hand) to realize the primary infrastructure components of the plan. Doctoroff’s way out is to create a special authority that will borrow money, money that will hopefully be paid back later on with future tax revenues. Developers will pay a newly-created Hudson Yards Infrastructure Corporation payments in lieu of taxes (PILOTs) equal to what their property taxes would have been. The corporation will then use the PILOTs to retire the $2.8 billion in construction bonds for the stadium and the extension of the No. 7 train. (The $1.4 billion for the Javits expansion and new parking facility will likely be paid for through an increased hotel tax.) However, since the best scenario has the first revenues from Hudson Yards starting in 2010, the city will have to borrow $900 million now in commercial paper to pay for the start of construction—debt that most likely will carry a high interest rate because of the risk investors face banking on future tax revenue that may not materialize.

Through clever manipulation of New York State law, it will actually be the Hudson Yards Infrastructure Corporation (an agency not subject to approval by the state legislature) rather than the City of New York that has to carry most of that debt on its books. Of course if push ever came to shove, most investors would probably find the distinction as paper thin as it is and expect the city and state to make good on the Corporation’s debt.

Critics of the plan decry the way the Bloomberg administration is attempting to shield the Hudson Yards development from transparent and equitable oversight. “The idea of raising billions by selling development rights and then putting the money in an off-budget fund [is] an extraordinary departure from democratic government,” says New York Assembly member Richard Gottfried.

The current Hudson Yards plan centered around a stadium would offer most New Yorkers perhaps some fleeting moments of Olympic fanfare beyond the bread and circuses they know all too well. Meanwhile, the powerful real estate, sports and finance industries will enjoy years of financial windfall at the taxpayers’ expense. In a city where Robert Moses ruled with almost absolute power as planning czar, the cloaking of private gain in supposed public good is not a new script. But planning for Manhattan ’s west side need not reenact past development dramas.

Eugene J. Patron is a student at the State University of New York.

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