Home MTA Construction Shocking delays, cost increases rock South Brooklyn project

Shocking delays, cost increases rock South Brooklyn project

by Benjamin Kabak

Who would believe that this project won’t wrap up on time? (Source: flickr user Betty Blade)

When the MTA announced earlier this week that the long-anticipated Culver Viaduct rehabilitation project would take longer and cost more than originally anticipated, Brooklynites the world over were shocked — shocked, I tell you! — by the news.

No, wait. They weren’t.

According to The Brooklyn Paper, this project and our dreams for an F Express train will have to wait longer than we had hoped. The MTA, according to the paper, still plans to begin the project next year, but the completion date for the station renovation at Smith and 9th Sts. has been pushed back to 2011.

Worse still for the cash-strapped agency is the price tag. Originally set at $187.8 million, the rehabilitation plan will now cost “upwards of a quarter-billion dollars,” as MTA spokesperson Deirdre Parker told Mike McLaughlin.

So that’s the bad news, and while I’m poking fun at the MTA’s inability to finish most major rehabilitation projects on time and at budget, there’s more at work here than simply business as usual. While The Brooklyn Paper story doesn’t get into the why’s of this delay and significant cost increase, we are well versed in these problems.

First, as with any other contractor in the city, costs are spiking. The economy is suffering through its worst downturn since the Great Depression, and with financial institutes collapsing and consolidating, a lot of construction projects are left unfunded and unfinished. The MTA, as a public benefit corporation, isn’t in danger of collapsing, but it will face rising costs. This 33 percent increase probably won’t be the last that we’ll see in regards to this project.

Second, the MTA itself has no money. The agency is attempting to reorganize internally and coax more money out of the state legislature. As such, it has to scale back their aggressive timetables for many of its top-priority projects. This is, of course, a double-edged sword. The longer these projects are delayed, the more they will cost. If the government were to provide for proper funding, the MTA would be able to improve its cost and timetable efficiency.

I know it’s rather naïve of me to think that a third Bloomberg term would deliver more respect to the MTA. But if we’re truly heading down that path, I hope the Transit Authority is allotted more financial resources over the next few years. If its not, we’ll be paying the price long past the completion of one long-delayed project in South Brooklyn.

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Yonah October 24, 2008 - 7:43 am

Check out a discussion of the necessity of funding existing transit networks as the first priority of the next administration at the transport politic.

Boris October 24, 2008 - 10:16 am

This last time the MTA sold bonds, I wondered, what is the purpose of that? Bonds are sold with the purpose of getting lots of money now to develop something that will be profitable enough to pay off the interest on the loans later. The MTA is not and will never be profitable. Why not get money from the government? Everybody knows that we either pay a little now or a lot later (to cover the interest).

Why not pay now? And if the government refuses to fund the MTA, it could at least give it a loan. Why not give the MTA a federal loan the same way banks get them? MTA’s collateral is falling apart, but still pretty solid, and is a guaranteed money-generator by virtue of being a monopoly. I’d argue that the MTA generates as much business (directly and related) as any bank which can get several billion dollars in loans from the Fed. OK, the Culver Viaduct project will never “make money”, in the traditional sense, but at least the taxpayers will be repaying the federal government, and not private investors.

This is what the Iraq War and the bailout has done to my thinking- quarter of a billion dollars? What a joke. The federal government can, and should, loan or simply give us this money, like it is doing with foreign countries and big business.

Scott C October 24, 2008 - 11:08 am

Instead of trying to run for a third term as mayor, maybe Bloomberg should campaign to run the MTA since he thinks he is so good at reorganizing and making bureaucracy more efficient.

eric October 24, 2008 - 1:47 pm

Bloomberg loves the fame that comes with being the mayor!!! He doesn’t really care about helping the city or he wouldn’t have bypassed the will of the voters who voted to have term limits.

Marc Shepherd October 24, 2008 - 11:28 am

Bonds are sold with the purpose of getting lots of money now to develop something that will be profitable enough to pay off the interest on the loans later.

That was true in the good old days, but not any more. You’re probably thinking of the Robert Moses era. He would sell bonds to build a bridge, then raise enough from tolls to service the debt and fund the next bridge. All of the MTA bridges and tunnels were paid for this way.

But nowadays, politicians issue debt for another reason: it’s easier than raising taxes. That’s because tax bills hit immediately, but debt payments stretch out for years into the future. So politicians can take credit for improvements, but the bill is left for future generations. It’s the same reason why the U. S. national debt keeps going up.

Boris October 24, 2008 - 9:27 pm

Well, I was talking more generally about what bonds are used for, by private corporations and others. Sort of the textbook example.

I guess an argument can also be made that taxes are the result of public project activity, so we really do “owe” the government because it empowers us to make money. But in the MTA’s case, the borrowing is so far removed from reality as to be basically harmful to the whole enterprise.

herenthere October 24, 2008 - 12:32 pm

I thought you (or some news article) said that construction costs were decreasing because of the worsening economy.

Alfred Beech October 24, 2008 - 3:21 pm

A quarter of a billion? At some point I think it’s going to seem like throwing good money after bad.

How much would it cost to run at grade from Carroll to 4th and 9th, and put in a lift bridge over the Gowanus Canal? The whole point of that viaduct was to allow tall ships to pass under the subway, and that hardly seems like a concern these days.

paulb October 25, 2008 - 10:31 am

The article doesn’t say whether the increases are due to higher industry costs, the cost of borrowing money, or hitherto undiagnosed structural problems in the viaduct. It’s not very informative.


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