The $600 million South Ferry conundrumBy
Since getting wind of the MTA’s $600 million request for funds to repair and restore the South Ferry/Whitehall St. station complex, I’ve had a tough time wrapping my head around the exceedingly high figure. The total — which may not include repairs to the Montague St. Tunnel or nearby Broad St. station — is over ten percent higher than the cost of constructing the new South Ferry station, and a time when budgets at any level are maxed out, it seems on the surface to be just another example of the MTA’s inability to rein in capital construction costs.
The South Ferry price tag isn’t the only shocking number from the MTA’s Sandy Impact List. Restoring the A train’s Broad Channel connection to the Rockaways will cost $650 million, and repairing the damage to the signal system will run up to $770 million, nearly as much as initial estimates for a full CBTC treatment of the Queens Boulevard line. While we can argue that emergency dollars from the feds represents an untapped revenue stream of which the MTA should take full advantage, something else might be at work here. The MTA may be overestimating it needs.
After facing a rumbling of shock over the cost estimates, officials at New York City Transit have repeatedly stressed that the figure is just a guess for now. They don’t know how much it will cost and hope to get the total well below $600 million. Ted Mann of The Wall Street Journal followed up this argument with a piece on South Ferry this evening. He writes:
The Metropolitan Transportation Authority is still in the earliest phases of assessing the damage to its facilities, including how much it will cost to rebuild South Ferry, which filled with flood water and debris carried in by the tidal surge of superstorm Sandy…The MTA will seek to repair damage to South Ferry for less than the $600 million asking price, Transit Division President Thomas Prendergast said on Tuesday.
The transportation agency is keeping its damage estimates high enough to account for potentially high costs of reconstruction–especially if the station suffered serious structural damage–or for expensive components like escalators and elevators that could need to be replaced. “You don’t want to pad” damage estimates in seeking federal aid, Prendergast said. “If you destroy your credibility by padding numbers, that’s bad too. But you start with a number that you think is going to capture all your costs and you work back from that. And if we find we end up delivering it less, we’re not going to bill anybody for more.”
There is the possibility — though no guarantee — that some damage estimates will fall as evaluation continues and repair work begins in earnest, Prendergast said. “When you’re dealing with third parties who may reimburse you, you never want to start low and then work high,” he said.
In a sense, the MTA is following a practice it rarely pursues: By overestimating the costs now, the agency may look better in the public eye when repairs come in below target. They also may not know the full extent of the damage, and it is possible as well that the repairs will cost that much. After all, the entire South Ferry station was flooded, and salt water mitigation and subsequent repairs and hardening efforts will be substantial.
Still, these estimates bring to light a problem that has bedeviled the MTA for decades: Construction costs in New York City cannot remain this high if the MTA wants to continue to expand its network to meet growing demand. We can’t pay $600 million to repair a single subway stop just like we can’t pay $4.5 billion to build barely two miles of new subway. The MTA has needed to engage in a serious discussion of its capital construction spending scale for years. Maybe Sandy can push that dialogue in the right direction. After all, New Yorkers are beginning to suffer from subway repair-induced sticker shock.