Archive for 7 Line Extension
I’ve had a tough time getting a handle on the Real Estate Board of New York’s position on transit advocacy over the years. Time after time, we’ve seen how better transit has a positive impact on the value of real estate and the pace of development, but REBNY never seems to be out in front of key issues. For instance, they supported a station at 41st and 10th Ave. on the 7 line extension years too late, and their website devoted to the cause is no longer up and running. They have power but not necessarily the will.
Now, though, they seem to have emerged as the most vocal supporters for one of Mayor Michael Bloomberg’s odder proposals that will likely die when he leaves office at the end of the year. REBNY has become the champion for the plan to send the subways outside of New York City, under the Hudson River and to Secaucus. Jerry Gottesman, the chairman of Edison Properties, and Steve Spinola, the president of REBNY, made their case in the Daily News yesterday for a comprehensive study. Why stop at 34th St. and 11th Ave., they ask, and their answer has a twist.
Over the past three years, the mayor’s office, working with a bi-state multi-agency task force, has studied a plan to extend the No. 7 line through a new tunnel under the Hudson River, connecting it to the Lautenberg train station in Secaucus, New Jersey.There, it would become the transit connection of choice for many of the millions of New Jersey commuters each day, linking this key workforce seamlessly to the Hudson Yards, Bryant Park, Grand Central Station, Long Island City and Flushing — and giving Queens riders direct access to New Jersey as well.
…The extension of the No. 7 to Secaucus would create important ancillary benefits. With over 200 peak-hour buses full of riders travelling to Secaucus for a smooth transfer to the No. 7 Line, the Port Authority Bus Terminal on 8th Ave. and West 42nd St. would be relieved of a significant portion of the demand that presently clogs that facility daily, increasing its operating efficiency and finally unburdening it enough to allow it to undergo a much needed renovation…
The public should know that there are two rail-tunnel proposals, both necessary. In addition to the No. 7 extension — which would address the needs of regional commuters and employers in both the city and New Jersey — there is the Gateway Tunnel, a keystone in Amtrak’s realization of a robust intercity rail system between Washington and Boston on its premier line, the Northeast Corridor. It would also provide redundancy in the event of failure of the existing 100-year-old tunnel to Penn Station. Having the two systems share a tunnel is not a new solution…By building one tunnel that can serve both the 7 train and Gateway, both projects will be able to advance when the first one proceeds, laying the foundation for future regional mobility and growth.
This is the first a bi-level tunnel similar to the one under the East River at 63rd St. has been proposed in the public discourse surrounding the 7 line extension, and the two real estate execs have requested a $2 million effort to fund a serious study. That would be on top of the $500,000 study the EDC unveiled in April that termed the extension “feasible.” I’m not sure this idea even goes that far.
It’s hard to imagine the money coming in for the Gateway Tunnel, let alone for a subway tube literally on top of that. The wisdom of such an approach from a practical standpoint should be question, and as Stephen Smith noted, this idea reeks of “insane overengineer.” But it’s still a Big Idea with some champions, and as I’ve noted in the past, that’s how Big Ideas become reality.
Still, this latest salvo in the ongoing battle to drum up some support for this extension doesn’t reach the fundamental question of need. New Yorkers won’t back a 7 line to Secaucus without some major contributions from the Garden State because it doesn’t benefit them, and already Staten Island politicians have threatened to block any such efforts with a commitment to improve transit connections to and from that isolated borough. There are areas in the city that could use better subway service and are primed for development should the transit connections arrive. Perhaps that — and not westward across the Hudson — is where REBNY should devote its energies.
When Mayor Bloomberg promised to pay for the 7 line extension to 34th St. and 11th Ave., he did so in part on the basis of tax returns. Tax revenue from the Hudson Yards development will help pay off the $2.1 billion in bonds the city has outstanding for the subway project. What happens though if the city intentionally depresses that tax revenue?
Already, New York’s Independent Budget Office has raised some concerns over tax revenue from the project. Due to the Great Recession and a sluggish market, tax returns have not been as high as expected, but development is set to grow in the coming months. Now we get word of more tax breaks.
Here’s Daniel Geiger on the funding scheme:
The city’s Industrial Development Agency is expected to clear the way for a big tax discount for a portion of the Related Cos.’ vast Hudson Yards project on Tuesday. The anticipated thumbs up has raised eyebrows among some fiscal watchdogs.
The agency, a subsidiary of the city’s Economic Development Corp., is considering a 20-year long 40% property tax break for a roughly 1 million-square-foot retail mall and the 2.4 million-square-foot office spire that the retail space will be attached to that is being built over the rail yards west of Pennsylvania Station. According to a recent report on the discount, published by the city’s Independent Budget Office, Related could realize $328 million in savings from the exemption over the period…
Fiscal watchdogs say that the break is especially problematic given that the city plans to use tax revenue from the Hudson Yards to pay off the over $2 billion cost of extending the No. 7 subway to the site. That extension is set to open in mid-2014. According to the IBO, the city’s tax collections have fallen short of projections, forcing it to reach into municipal coffers to cover the shortfalls.
Between 2006 and 2012, the city spent $137 million servicing the bonds for the No. 7 line, and is girding itself to spend more. According to the IBO, the city has set aside $155.6 million for that purpose in 2013 and 2014.
Various government watchdogs have questioned the appropriateness of the tax break, and it certainly doesn’t seem completely necessary to encourage development in the area. Meanwhile, the city has given out a subway extension and will now sacrifice more revenue that could have gone toward the station at 41st St. and 10th Ave. That’s not a particularly good look.
As Mayor Bloomberg’s time in office nears an end, his tenure is racing against the clock for the 7 line extension. For better or worse, this project, less one key station, is his baby, and earlier this year, he vowed to push trains through the tunnel before his term ends if it means an opportunity for a ribbon-cutting. It may not be ready for revenue service until mid-June of 2014, but some sort of ceremony will take place before the end of the year just to Bloomberg can pat himself on the back for delivering the dollars.
At a certain point, the conversation surrounding the 7 line changed. I used to call it the Line To Nowhere, and while it’s sort of the line to nowhere, in a few years, it’ll be the Line That Turned Nowhere Into Somewhere. It shouldn’t surprise us because most of New York City developed on the backs of the various subway lines, but development of Manhattan’s last frontier is following the subway and at a very rapid pace.
In a big piece in this week’s Crain’s New York, Dan Geiger explores that development. The dollars are starting to roll in, and soon the buildings will start to rise. Geiger reports:
With the long-talked-about transit link almost ready, the area’s real estate interests are betting vast sums that more tenants will follow in the footsteps of the major companies that have already booked huge blocks of space, including Coach, Time Warner and L’Oréal. Indeed, as Crain’s first reported last week, Citigroup is considering relocating its global corporate headquarters from Park Avenue to Hudson Yards.
In response to those bullish signals from tenants, developers are snapping up major development sites at a prodigious pace, making the area the most active in the city this year for such deals, according to real estate experts. The 7 train’s looming arrival has only hastened that frenzy. Bob Knakal, chairman of sales brokerage Massey Knakal, said small fortunes are being created, as the activity has pushed up land prices by double or more.
“A lot of the development sites that only a short time ago were considered speculative are now tangible,” Mr. Knakal said. “You’ll see a lot more happen in the neighborhood coming up. There are at least four very significant sites that I know of that will be in play within the next month or two right smack in the Hudson Yards.”
The Related Cos., already in the process of developing the 26-acre, $15 billion Hudson Yards complex, has been the most voracious buyer of adjacent sites in a doubling down of its holdings in the area. The company has entered into a contract to acquire a parcel between West 35th and 36th streets—for $75 million or more—that will border a new “Hudson Boulevard” being constructed by the city to run between 10th and 11th avenues.
The actual arrival of the train to the area was a key moment psychologically for developers. As Geiger notes, those investing in the area believe that 70 percent of residents will use the 7 train on a daily basis, and the level of interest has increased as it’s become clear that the subway is a reality and not just a promise. Meanwhile, Related, the company with the largest stake in the area, plans to start work on the platform that will cover the Hudson Yards early next year.
“If there were no No. 7 subway, I’m not sure we would be starting the platform then,” Jay Cross, the head of the Hudson Yards project for Related, said to Crain’s. “But knowing that it is going to be there means we have to get going and that we will also have enough tenant interest for the space there.”
Is there a lesson here — besides, that is, the one Dan Doctoroff was espousing a few weeks ago when he praised the 7 line at the expense of the Second Ave. Subway? We see that subway construction can still feed development and can still dictate where people want to live, work and build in New York City. The same doesn’t happen around Select Bus Service lines, and our politicians would be wise to pay attention the Hudson Yards. There are other areas of the city that could use subway lines and the subway lines can lead to more density and a better use of scarce space.
Here is an interesting tidbit from The Wall Street Journal: Frank McCourt has acquired a development site in Manhattan for $167 million two years after Sherwood Equities paid $43.5 million for the space. The area, which will host a 730,000 square foot tower, sits at 30th St. and 10th Ave., mere blocks away from the 7 line extension, and various stakeholders are crediting the new subway stop with spurring on the tremendous increase in property value in the Far West Side.
Jeffrey Katz, president and CEO of the site’s former owner, is one of those stakeholders. “I think if you asked people a year ago about this district, still they would say ‘Are you crazy?’ Quite a number of people now understand there’s something extraordinary going on,” he said to The Journal. “The surge in value on this site was so dramatic—it was unprecedented—that our rate of return could never have been higher.”
The one-stop 7 line extension to 34th St. and 11th Ave. is set to open by next June, and the city has paid over $2 billion to the MTA to build this transit spur in the hopes of realizing the value in Manhattan’s last undeveloped frontier. So far, what I once derided as a Subway to Nowhere is shaping up to be the prime mover in something that is most definitely transit-oriented development within the boundaries of Manhattan.
I haven’t had a chance to sneak a peek at the 7 line extension work since last February when the MTA lead a press excursion into the work site. In the intervening 16 months though, work has moved forward at a steady clip, and the one-station extension of the 7 line to 34th St. and 11th Ave. is on target for revenue service by next June. Today, the MTA unveiled a new series of photos of the work, and with 12 months left, it’s looking more and more like a subway stop.
We can see that tunnel systems are in place and signals are awaiting incoming trains (though some signals remain wrapped in plastic, not yet ready for tests that should begin in December). Inside the station cavern, subway platforms are taking shape and so are the escalator banks. The switch cabinets in place too, and I believe this area will host the incline elevator that will bring passengers deep underground.
I’ve long been critical of the approach to this project. Losing the station at 41st St. and 10th Ave. is a mistake New York City will live to regret, and I’m skeptical that, even with provisioning in place for two side platforms there, we’ll live to see the 7 make that stop. Additionally, the train could continue south (or even west, if Mayor Bloomberg has his druthers), but for now, we get one stop. That said, that stop will be key in bringing people to one the underdeveloped areas of Manhattan, and growth will boom with a new subway stop.
After the jump, a slideshow of all of the MTA’s photos showing the latest progress at 34th St. and 11th Ave. Read More→
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.
In what is possibly the weirdest MTA-related story in years, DNA Info reports today that the 7 line extension is safe from electric eels. Now, an astute reader may be wondering how this came about a year before the project is due to wrap and why anyone would be focusing on electric eels in the first place. Well, the story is quite strange.
As Jill Colvin reports, MTA Board Member Charlie Moerdler raised the issue at a recent board member when he claimed to remember eels coming ashore and wreaking havoc on metal pipes during construction of the Javits Center. Moerdler helped the Javits Center secure an exemption to New York’s plumbing rules, and the convention center received permission to use plastic piping. “That’s the issue. Does it apply to the 7 line and does it apply to the area where the Hudson Yards is?” he asked.
Colvin dug up the March 1980 Final Environmental Impact Statement for the Javits Center and could find no mention of electric eels raising any alarms. She also spoke with the eel project coordinator at the Hudson River Eel Project who said that electric eels do not live in New York Harbor or the Hudson River. “I don’t think you have to worry about electric eel damage,” Chris Bowser said. The MTA, meanwhile, has no plans to to eel-proof the West Side subway extension, and I for one am glad that’s settled.
For the past few years or perhaps centuries, New York has displayed a wee bit of a paternalistic attitude toward New Jersey. We scoff at the swamps and industrial areas that mar the landscape on the other side of the Hudson and view the state as some traffic-infested suburban wasteland rather than as a strong economic partner in the region. Gov. Chris Christie’s decision to cancel the ARC Tunnel felt like the final straw. If New Jersey doesn’t care about its ease of access into New York City, then why should New Yorkers care if Garden State residents can get here?
For the past few years, though, Mayor Michael Bloomberg has tried to cut through this interstate rivalry, but he’s taking a very one-sided approach. Since Christie’s ARC move, Bloomberg has pushed the idea of sending the subway to Secaucus. It’s a New York-centric way of controlling cross-border travel, but it’s one that could see the light of day if the mayor can find money. Yet, much like ARC, it suffers from a lack of interstate cooperation. New York wasn’t putting much into ARC construction, and New Jersey is hardly chomping at the bit to fund a trans-Hudson rail tunnel, let alone an extension of New York City’s subway system.
Still, the 7 extension to Secaucus is the idea that just won’t die. Last week, New York City’s Economic Development Corporation termed it feasible, and Staten Island threw a fit. As the MTA remains skeptical and broke, Trenton has done little more than acknowledge this idea’s existence. The Garden State won’t complain if someone else wants to build a rail tunnel for them.
But what if New York can eke out more than just some cheerleading and a promise not to intervene from New Jersey? What if New Jersey could be a funding partner? Bringing in New York’s neighbors to the east would greatly improve the project’s odd, and yesterday, The Record of Bergen County endorsed the idea.
The ARC tunnel was an expensive proposition with limited benefits. The trains would run to a new subterranean station below 34th Street; it would not have given commuters access to Grand Central Terminal, as a similar project under the East River eventually will do for Long Island Rail Road commuters. Additionally, New Jersey was on the hook for all cost overruns. Christie killed the project citing those costs as the main reason.
As years pass, it seems more likely the governor wanted the state funds committed to ARC for other transportation projects. Christie has provided no leadership on a new tunnel project. He has publicly been open to all suggestions, but has not put his political muscle behind any – not the possibility of extending the subway to Secaucus or the Gateway project that would allow for more Amtrak trains to cross under the Hudson.
The Metropolitan Transportation Authority, which controls the New York subway, does not support Bloomberg’s plan. It does not see it as an economically viable project. There were no financial specifics in the report issued last week, so we are skeptical the MTA can make a valid judgment at this juncture. No doubt, Bloomberg sees the benefits for Westside development with an enhanced No. 7 subway. But the subway runs both ways and access to the Westside in Manhattan is access to North Jersey. The subway expansion would spur development around the Meadowlands and further support the proposed American Dream project…
The greater metropolitan region needs more than one trans-Hudson solution. None of these solutions will be inexpensive and all will take many years to complete. As superstorm Sandy showed us, our infrastructure is vulnerable. We need more transportation alternatives – traditional rail, light rail and subway. And we need them soon.
The most convincing argument in favor of the 7 line extension is in this editorial. It’s not just about development in New York City, and it’s not just about development in New Jersey. It’s about the potential to improve cross-Hudson travel while connecting New Jersey commuters and residents with Grand Central and spurring on development in the nearby Secaucus and Hoboken communities. It’s about realizing the economic power of the region rather than the isolationism of each state and the silo approach to transit planning.
I’d like to see The Record take its suggestions one step further. New Jersey should become a partner in the trans-Hudson efforts. Right now, Bloomberg is pushing his 7 line plan with no sure signs of success, and it’s not clear his successor would pick up the effort come January. Meanwhile, Amtrak is the only entity behind the Gateway Tunnel right now as New York and New Jersey have taken a step back there. Only through an interstate embrace will the region move forward with a new trans-Hudson rail tunnel. Otherwise, this is all just talk from lame-duck politicians and planners dreaming big but with no money to back it up.
Albany: Home to a bunch of crooks, stool pigeons and politicians who are adept at cutting off their noses to spite their face. We know that Albany’s relationship with sensible transit planning isn’t a particularly strong one, but Diane Savino, a State Senator from Staten Island takes the cake this week. In response to the EDC endorsement of the 7 line to Secaucus, Savino has vowed a war. She will do all she can to block any state funding for such a subway extension until and unless Staten Island gets a subway connection to the rest of the city first.
“Are they out of their minds?” Savino said to the Staten Island Advance. “We are part of New York City, we are a borough of over half a million people, it is past time we have similar transportation alternatives that are provided to the other boroughs. The NYCEDC would be better served by following their mandate, serving the people of the City of New York.”
Savino’s attitude is beyond provincial and focuses far too much on state borders instead of the proper measures of use, efficiency and economic development. Would a subway from Staten Island to Manhattan (or even to the R train along 4th Ave.) be feasible, cheaper and, most importantly, as heavily utilized as an extension into Secaucus? Without much further study, we don’t know, but the Hoboken/Secaucus area has a much higher population density than Staten Island. Were Savino to make good on her threat, it could seriously impact a project that could be of great benefit to all of New York City.
Meanwhile, if Savino is serious about a subway to Staten Island, she could start by being a better transit advocate. Over the years, she has voted to reduce MTA subsidies without reading the bill at hand, she has urged for a repeal of the payroll mobility tax, and she has was disproportionately outraged over a request for information the MTA issued two years ago.
As the transit world once debates sending the 7 train to New Jersey, the MTA has once again attempted to douse this fire. In a very brief statement in response to the Economic Development Corporation’s report, the agency said simply, “We don’t see this as an economically viable idea.”
This is not the first time MTA officials have added a dose of reality to the project. Last April, then-MTA Chairman and CEO Joe Lhota issued a similar statement. “It’s not going to happen in anybody’s lifetime,” he said. “the expense is beyond anything we’re doing.” Of course, one of my complaints about the EDC report is that it doesn’t mention costs at all, but needless to say, those costs would be steep.
The Mayor, though, remains undeterred. In his own statement, he calls the 7 to Secaucus a “promising potential solution.” Said Bloomberg:
“It’s been a century since there was a new rail tunnel under the Hudson, and demand for travel between New Jersey and Manhattan is growing rapidly and quickly exceeding the capacity of existing transit infrastructure. The lack of new transit investment is creating a serious and urgent threat to New York City’s economic competitiveness. Extending the 7 train to Secaucus is a promising potential solution – it would leverage existing investments and be compatible with other proposed projects – and is deserving of serious consideration. We look forward to continuing to discuss this option, as well as other feasible proposals, with the numerous stakeholders involved.”
So is this all just a game of politics and economics? It seems like it. The 7 to Secaucus is the Mayor’s pet project, and it came about originally with virtually no input from the MTA. The MTA, with its own capital priorities, isn’t about to sink its finite resources into a subway to New Jersey, and if the mayor wants such a tunnel to be his lasting legacy, he will to find a way to promote — and pay for — this project whatever the costs may be. I tend to think Lhota was right a year ago; I doubt we will see this in our lifetimes. But it sure does have everyone thinking.