As the Tunnel Boring Machines continue their march from 34th St. and 11th Ave. to Times Square, the MTA and Related are still hashing out their $1 billion deal for the development rights to the land above the Hudson Railyards. The deal, originally set to be signed in January with its first payment this month, has been given an additional 60 days, according to a report in The Observer, and as the real estate markets continue to struggle, the future of this deal is still not set in stone.

According to Eliot Brown, the MTA and Related have agreed to extend the deadline to sign the contract from January 31 to March 31, and he says that the real estate executives “have recently been expressing confidence that they indeed expect to sign the contract once the documents are ready.” Meanwhile, Goldman Sachs, one of Related’s funding partners, has dropped out of the deal, but Related says that will not impact their ability to pay the money owed to the MTA.

Brown has more:

A bit more info about the contract with the M.T.A. is in a memo from the agency, obtained by The Observer, sent late Friday to the M.T.A.’s board. The memo says that Related has until March 31 to sign the contract, when it will have to plunk down $21.75 million and trigger another $21.75 million in payments over the following year. (The whole deal is valued at a $1 billion transaction for the MTA in today’s dollars; the entire 12 million-square-foot mega-development, if built out fully, would run an estimated $15 billion.)

Should Related, led by Stephen Ross, indeed sign the contract by March, it would then obligate itself to close on the deal once the economy improves to the point where it hits a set of quantifiable triggers that include commercial vacancy rates, according to multiple people familiar with the deal. Thus the true test of whether or not the deal for the rail yards will happen is at that point—when Related must close on the deal and commit to the full 99-year lease (and the $1 billion in payments) or back out.

THE PROCESS HAS become considerably more drawn out and far more uncertain than imagined at the economy’s peak, when the M.T.A. was first soliciting bids for the site. The M.T.A. had planned for the $1 billion to start rolling in, and budgeted accordingly in its capital plan. Now Related must find major tenants willing to leap over to the far West Side and be anchors for a new giant complex of hotels, retail and office towers. And the development must have a certain critical mass of tenants to get going: the platforms alone for the two 13-acre rail yards are estimated to cost up to $1 billion, meaning a promised set of occupants is needed to get financing.

For the agency, this delay is obviously a fiscal inconvenience. It has been nearly two years since Tishman Speyer originally agreed to buy the land, and the MTA could see another $1 billion deal disappear at a time when they most need the money.

Meanwhile, the 7 line extension continues onward. The subway extension will be built, and at the rate Related is going, it will open well before the bulk of the Hudson Yards development takes place. At least those who eventually build there will have a subway line. Whether the extension is still the best use of city spending on transportation expansion remains an open question.

The 7 Line extension — that glorious city-funded boondoggle of a subway extension — reached a milestone this past week. After a few months of drilling, the second of the project’s two tunnel boring machines broke through the southern wall of the 34th St. station cavern. The two TBMs have finished digging out a combined 2900 feet of track from 26th St. on north that will be used for storage, and Phase I is now complete. The project remains on target for its December 2013 opening.

“It’s been a half century since City government expanded its subway system, but that drought will soon be at an end,” Mayor Michael Bloomberg said. “Too often, government falls victim to the temptation to abandon long-term infrastructure projects amidst short-term downturns, and that’s why big things never get done. The redevelopment of the Hudson Yards has been talked about for decades, but with the expansion of the number 7 line, its potential will finally be realized.”

“This week’s milestone is a clear indicator that the MTA is delivering on a major expansion project that will increase capacity within our transit system and generate economic growth in a vastly underserved area,” MTA Chairman and CEO Jay H. Walder said. “Much like our joint efforts to improve bus service throughout the city, this partnership between the city and MTA will benefit New Yorkers for generations to come.”

The press-release back-slapping by the MTA heads and various city leaders continued as you would expect. For those so inspired, read it here. Manhattan Borough President Scott Stringer, City Council Speaker Christine Quinn and House Rep. Jerrold Nadler all added their praise for the project. The 800-pound gorilla in the room, though, was completely ignored.

“Today’s announcement of the completion of the first phase of the Number 7 Line extension is a major milestone in the expansion of New York’s aged infrastructure,” Nadler said. “For too long we have not made the necessary investments to update our transportation network. This project, which will open the economic potential of the Far West Side, is one of many such projects we need to do to prepare New York for continued growth. I look forward to the successful completion of this project and future investments in our infrastructure.”

Left unsaid were qualms about present investment levels in our infrastructure. In a way, the 7 line extension and this moment in the sun for the project represent the perfect complement to the wall-to-wall coverage of of the MTA’s budget crisis. Here is a project in which the city has given $2.1 billion to transit, and yet it is one of the most flawed expansion projects under construction. Despite the Council’s approving a rezoning measure for the Far West Side yesterday, there has been no progress on the Hudson Yards development.

Meanwhile, the City was hesitant to cover cost overruns on the project and shelved even just a $500 million shell for a badly-needed station at 41st and 10th Ave. Why? Because real estate developers looking for handouts and bonuses to increase their land value wouldn’t have benefited nearly as much as Related, the company in charge of constructing something at Hudson Yards, will when the 7 line opens ahead of their development.

Call me a cynic, but there’s something wrong about the city’s funding priorities when it comes to mass transit. Bloomberg is happy to pay for an extension that will benefit his real estate friends, but when it comes to contributing to operating expenses and ensuring that the economic driver of the city can continue to offer adequate service levels, he and his third-term administration are nowhere to be found.

One day, the 7 line extension to nowhere will open, and one day, it might actually be an extension to somewhere. For now, though, the TBMs trundle forward with 42nd St. in their sights. Hopefully, the MTA will be able to pay for the extra operating costs this new line will incur when it opens in four years. Don’t expect the city to help out.

After the jump, some TBM pictures. Click to enlarge. The video above is courtesy of Mayor Bloomberg’s YouTube channel. Read More→

One day, this cavern will be a subway stop at 34th St. and 11th Ave. (Photo courtesy of MTA Capital Construction)

When the MTA announced its projected budget on Wednesday afternoon, the news focused around the steady fare for 2010. At the time, I promised more news this evening if the budget documents warranted further exploration, and they do not. So instead of more numbers about projected revenue and ridership, let’s head underground.

Since late June, when the MTA stuck with its 2013 target date for revenue service along the 7 line extension, news from the Far West Side has been scarce. Although I wondered if stimulus funds would save the station at 41st and 10th Ave., those funds and plans have yet to materialize. The station remains as dead as it was in September when funding concerns killed it, and neither the city nor the MTA has leapt at the chance to avoid making a costly construction mistake by not building it.

A few days ago, though, the MTA’s Capital Construction division finally updated the 7 line construction website with three pictures of the progress. One, seen above, shows significant progress at the 34th St. station cavern. Some concrete is in place, and the waterproofing has been installed. The other photos simply show some men working and some cables and ventilation for the tunnel boring machines. Thrilling stuff.

Meanwhile, in its document dump of MTA Board committee materials, the agency provided us with more concrete information about the 7 line extension. Found in the Capital Construction PDF, we know how detailed budget info and a set timeline for the extension. According to current estimates, this project — a one-stop extension of the 7 line from 41st between 7th and 8th Aves. to 34th St. and 11th Ave. with tail tracks do the mid 20s will cost $2,152,946,333. With this project set to add a little bit more than a mile to the 7 line, the cost of underground construction in New York City is prohibitively expensive.

According to the MTA documents, the project is still on target for a late 2013 debut. Originally, the agency had hoped to debut the 7 line service in 2012 after starting construction in 2006. The work, however, did not begin until December 15, 2007, and as such, the revenue service start date was delayed. We should not lose sight of the fact that, despite this early hiccup, the project has stayed on schedule since construction began nearly two years ago.

As for the nitty gritty, those tunnel boring machines are working their ways through the Far West Side. Through October 26, over 1800 feet of tunnel — or 19 percent of the project’s total — had been carved. As the picture shows, one machine has reached 34th St., and the other is set to get there by early December. Crews are continuing to work on the abandoned lower level platform beneath the 8th Ave. stop at 42nd St. to underpin the current A/C/E station. The new extension will pass directly through the abandoned stop and under the current station.

In the end, that’s about all she wrote for this update. The city still has not submitted to the MTA the necessary agreements for the agency to finalize station entrance designs, but that is a mere technicality at this point. If all holds according to plan, in four years, the 7 line extension — not quite a Subway to Nowhere, but not really a subway to anywhere other than the Javits Center right now — will open on time.

As the city gears up to vote in next week’s mayoral election, Michael Bloomberg has hit the campaign trail hard. He’s spending his billions and touting his record in search of a third term made possible, of course, by some underhanded term limit dealings.

On Monday, Bloomberg’s five-borough tour took him to NYU where he delivered a speech envisioning 2013, the supposed end of what would be his then-12-year turn as head of the city. During the speech, he spoke briefly about the 7 line extension, a subway line to nowhere and Bloomberg’s favorite MTA pet project. His excerpt on this city-funded extension was brief:

And Queens residents who work at the Javits Center, or elsewhere on the Far West Side, will begin riding the Number 7 Train past Times Square to 11th Avenue and down to 34th Street.

It’s the first new subway track the City has built in more than four decades – and we’re on schedule to complete it on time and on budget in 2013.

With an assist from the history of the New York City subway system and the Citizens Budget Commission, let’s fact-check the mayor. We start with a history lesson. Although the 7 line extension may be the first Manhattan-based subway expansion in decades, another line in Queens is less than four decades old. In 1975, the city began work on the Archer Ave. extension, a remnant of the Second System. Although work was slowed due to a lack of funds, that line opened in 1988, the most recent extension of

Technically, the mayor is correct in saying that the 7 line extension is the first new subway track the City has built in more than four decades, but the 7 line isn’t the first new subway extension in that time. In 1988, the Archer Ave. Line, a remnant of the famous Second System, opened, and work on that subway extension had started in the 1970s and continued through the 1980s. The line itself opened in 1988.

One year later, the MTA completed work on a Tunnel to Nowhere. In 1989, the 63rd St. tunnel opened. At the time, it connected the East Side with, well, nowhere. The 6th Ave. line extended north past 57th St. to 63rd St. and Lexington and then under the East River with a stop at Roosevelt Island and then a terminus at 21st St./Queensbridge. Until 2001, when a connector to the IND Queens Boulevard line finally opened, this stump sat but 1500 feet away from the bustling Queens plaza. All of those projects have happened in the time during which Bloomberg claimed the city did not construct any new subway tracks.

And now we turn to the CBC’s report on the state of MTA construction. The report devotes three paragraphs to the 7 line extension, and it reminds us that the tunnel was to be completed in September 2012 with the new station operational by June 2013. Although the tunnel should still be finished by September 2012, the MTA estimates an on-time completion date for the entire project of November 2014.

Furthermore, the city reneged on its promise to fund a station — or even a shell of a station — at 41st and 10th Ave. As it stands, the 7 line extension will run from Times Square, through a neighborhood badly in need of a train stop to 34th St. and 11th Ave. to find only a run-down convention center and a train yard that may one day be developed into a mixed-use property. It truly is the new Subway to Nowhere.

Bloomberg can tout his transit record all he wants. When the best part of his opponent Bill Thompson’s transit plan is a promise to “object when when the MTA tries to cut service,” it’s clear that Bloomberg is running against someone unprepared for the job. But that doesn’t mean we should give our incumbent a free pass. The 7 line extension is not the only new subway in four decades; it isn’t on time; and it isn’t as originally promised. It’s arguably a bad use of money, and it will result in a subway line with few passengers that won’t alleviate overcrowding at a time when trains stuffed to the gills dominate the system.

As the Bishop-approved 7 line extension marches inevitably toward a 2013 completion, questions about the project continue to swirl. The City and MTA are at an impasse over the funding for a planned station at 10th and 41st St., and with the Hudson Yards project decades away from reality, this West Side extension will serve an area rich in space and poor in actual riders for some time.

Today, as the city comes to terms with the compromise transit package soon to be pass in Albany, the fate of the 7 line may again be at a turning point. According to The Daily News and some leading transit advocates, aspects of the 7 line extension — including the purchasing of new cars — are not high on the MTA’s priority list. As such, the new station at 34th and 11th Ave. will exist and serve whatever is in the area, but the MTA may not have the money for new cars to adequate service the entire line.

Pete Donohue has more:

Straphangers could wind up with an extended No. 7 subway line – but not more frequent train service – if the MTA has to adopt a leaner capital plan, experts said.

Metropolitan Transportation Authority officials have envisioned a 2010-2014 capital construction and maintenance program in the range of $25 billion to $30 billion. But transit managers will have to cancel or delay some big-ticket items if Albany doesn’t provide enough funding to pay such a large tab.

Buying additional subway cars to expand the No. 7 line fleet is one move that could be shelved, according to Bob Yaro of the Regional Plan Association. “You would be spending billions of dollars on the No. 7 line extension, but without the additional cars, you wouldn’t be able to handle an increase in ridership,” Yaro said.

Donohue notes that on the MTA’s prioritized list of capital projects, the 7 line extension is in the third tier. The agency would first like to complete the installation of new tracking, the upgrading of power and tunnel exhaust systems and an overhaul of their old buses. The second tier contains the expansion projects for the East Side, and the third tier, for now, features future legs of the Second Ave. Subway, money for a 21st century communications and signal system and the 7 line car purchases.

We could debate the wisdom in that allocation for a while. I’d argue that a communications and signal system should probably be prioritized in the first tier, but the logistic behind that project are substantial.

Maybe in the end, the state delivers the money, and the MTA can go ahead will all three tiers of its capital program. For now, though, the 7 line extension remains a troubled project, a victim of inter-agency fighting and competing agency aims. To build it without the added capacity would be a disservice to hundreds of thousands of Queens commuters.