In the annals of New York City history, the construction of subway lines has regularly spurred on the development and growth of the city. The elevateds brought people north in Manhattan, and the famous photo above shows Queens at the time the 7 line started to snake eastward. Development, though, can take years, but eventually, it will come. Patience is a virtue.
A recent study commissioned by City Council member Dan Garodnick and released this week by the city’s Independent Budget Office makes me think we’ve forgotten about patience. The study assesses the amount of money the city has so far received from Hudson Yards development against the amount it has invested in the project. With subway construction not yet completed, the city still rebounding from a deep recession and no completed development at the site, as you can imagine, the study found that, so far, taxpayers have invested far more than they’ve gotten out of it. Should we condemn the project? Throw in the towel? Not quite yet.
The report [pdf] is heavy on numbers as IBO reports are wont to be. Its origins grew out of the Bloomberg Administration’s plan to rezone Midtown East. Garodnick worried that such a rezoning would lead Midtown East to compete with the Hudson Yards for development opportunities and dollars. If the city had too much taxpayer money riding on Hudson Yards, Midtown East may not enjoy the same benefits until Hudson Yards becomes self-sufficient.
As astute observers may have already guessed, the report found that Hudson Yards has a long way to go before it repays the city expenditures and infrastructure investments. The short of it is that initial city estimates predicated $283 million in tax and fee revenues through 2012 but the total actually collected has hit just $170 million. The city is on the hook for the increased costs of the 7 line extension, and the IBO highlights the need to cut the key station at 41st St. and 10th Ave. Ultimately, TEPs, PILOT revenue and taxes will begin to increase, but the IBO doesn’t expect serious jumps in revenue until late this decade or early next when the high rises go up.
Garodnick didn’t have too much to say about the report, but he commented for a Wall Street Journal article on the study. “It’s clear that Hudson Yards is moving slower than anticipated.” he said. “The city is on the hook there, which is a point of concern as we consider other development issues”
But should it be? How can we pass judgment on a project that isn’t close to completion yet and in fact has barely passed the point of commencement? The subway doesn’t start running to the Hudson Yards for another 14 months, and buildings are starting to go up in the area albeit slowly. Were we in this much of a hurry to judge new development throughout the city’s past, extending the grid into what is now the Upper East and West Sides would have come under heavy criticism far too early in time to pass real judgment.
At this point, the city is still investing in development of the Far West Side. A collapse of the New York real estate market five years ago and a slower-than-expected recovery means that the city won’t recoup its costs quite as quickly, but in 15 years, we won’t even remember this discussion. The pace of work at Hudson Yards shouldn’t be a concern quite yet, and it shouldn’t slow down the Midtown East rezoning effort. While time may not be on the side of elected officials constantly running for office, the Hudson Yards area has all the time in the world, and it will one day meet those economic expectations.