Home Fulton Street Fulton St. costs rising after legal ruling

Fulton St. costs rising after legal ruling

by Benjamin Kabak

The tortured history of the Fulton St. Hub is one we know quite well. Nearly seven years behind schedule and 100 percent over budget, this project aimed at revitalizing Lower Manhattan has become a symbol of the MTA’s construction problems. Recently, the MTA faced another economic setback as a New York State Supreme Court judge ruled that the agency owes displaced real estate owners another $40 million.

While I first saw this write-up in the Post, GlobeSt.com has a more thorough story. In a ruling issued late last month, State Justice Walter Tolub told the MTA that it will have to up its valuation of three Lower Manhattan parcels seized as part of the Fulton St. Transit Center project. The MTA had priced them as individual parcels, but the judge is considering them to be an assemblage with a higher price tag. Paul Bubny has more:

“The highest, best and most profitable use of the properties would have resulted in the construction of residential rental and condominium development, with ground and second floor retail development,” Tolub wrote in his August 28 ruling. Given that, “there is simply no question” that the three northernmost parcels along lower Broadway between Fulton and John streets “would have constituted an assemblage, and that the parties would have entered into a zoning lot merger, transferring the development rights. These lots were, for all intents and purposes, under common ownership and control.”

That common ownership of the four properties on these parcels came from the Reformed Protestant Church of the City of New York, the fee owners of 192, 198 and 204-210 Broadway; and from Brookfield Properties, which entered into a joint venture with the church on ownership of 200 Broadway. Brookfield and the church had discussed an assemblage of these parcels well before the MTA’s eminent domain seizure of the properties in March 2006, Tolub wrote. All have since been demolished.

According to Tolub’s ruling, the church had also been in active negotiations with the Riese Organization, which owned 194 Broadway, for developmental rights prior to the MTA’s taking the property. Based on comparable sales that took place in early 2006, Tolub ordered the MTA to pay the Rieses $35.2 million for 194 Broadway, and to pay the church and Brookfield a total of $106.5 million for the four other properties.

In a statement to me about the ruling, the MTA expressed its plans to file an appeal. “The MTA disagrees with the court’s valuation of property required by the MTA to complete the Fulton Street Transit Center and intends to appeal the decision,” the statement said.

Despite this legal setback and the potential for a higher price tag, the Fulton St. plans are not in fiscal jeopardy. “The project’s budget and the proposed 2010-2014 capital program include reserves for contingencies, which, if necessary, would cover these increased valuation costs,” the MTA said.

Attorneys for the victorious plaintiffs said they would seek fees and other expenses from the MTA as the case heads to an appeal. I certainly hope this transit center is worth it in the end.

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15 comments

Tony September 9, 2009 - 5:56 pm

I agree with the judges decision on this matter. After reading numerous articles on this topic today it seems that he ruled correctly even though it will cost the MTA money. The MTA needs to stop appealing ever court decision and use some of that money for something else.

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Alon Levy September 9, 2009 - 8:38 pm

Nearly seven years behind schedule and 100 percent over budget, this project aimed at revitalizing Lower Manhattan building a train station with no trains has become a symbol of the MTA’s construction problems.

Corrected.

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Jerrold September 9, 2009 - 10:35 pm

What do you mean by “building a train station with no trains”?
Since when are there no trains at the Broadway-Nassau station, which is made up of four connected subway stations?

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Alon Levy September 9, 2009 - 11:09 pm

There are no mainline or commuter trains. That’s generally what you build train stations for. For subways, there’s no need to build anything elaborate above ground, and even less need to level an entire block for it.

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Adam September 10, 2009 - 5:07 am

Um…..PATH?

But yeah, they at least need to build provisions for a commuter rail station someday (it’s a better use of money than a commissioned dome). Still we have two beliguered subway extensions that could use the money more.

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Alon Levy September 10, 2009 - 5:34 pm

PATH is a subway.

And the city has just one subway extension under consideration that could use the money more. The 7 extension is a total waste. Beyond that, I’d argue that a tunnel from the Staten Island Railway to South Ferry to Fulton is the best use of rapid transit money in New York next to SAS and possibly Triboro Line.

Adam September 10, 2009 - 11:27 pm

The Triboro Line has to be done. Don’t know what’s putting it off other than disdain for livable neighborhoods in the outer boroughs.

Benjamin Kabak September 10, 2009 - 11:30 pm

How about the billions and billions of dollars it’s going to cost?

Alon Levy September 11, 2009 - 12:21 am

It’s not billions and billions. The line runs on existing ROW, with no need for new tunnels, which are what makes subways so expensive. When the ROW is in place, the cost is the same as for surface light rail, which averages about $22 million per route-km. New York’s higher cost of living means this should be budgeted at perhaps $30 million per km. The Triboro route is 35 km long, making the total cost $1.05 billion, which is equivalent to two years’ worth of SAS Phase 1 budget overruns.

AlexB November 5, 2009 - 2:20 pm

I would be shocked if they were able to build the triboro line for $22 million/km. The hudson bergen light rail was around $35 million/km. The triboro stations are bound to be more elaborate and the work needed to build the new tracks more complicated. I think $2 billion would be the low end of how much that might cost. This is NYC remember.

Nathanael September 17, 2009 - 9:34 pm

Um, the *actual* purpose of this project was to straighten out the connections which currently run parallel to the ACE lines, eliminate overcrowding on the IRT platforms, and to add ADA accessibility. All of this *badly* needed to be done.

The surface building was a boondoggle…. but to do the above items required tearing down most of the buildings on the block anyway.

The surface building may never materialize anyway.

I wonder if they could have simply planned a ground floor (and below) transit center and offered the overhead development rights back to the previous property owners. Seems to make sense to me. Actually, if they handle it right, they may end up getting more money from renting commercial space on upper floors than it cost them to buy the properties.

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Peter September 10, 2009 - 8:50 am

The point of the Fulton Hub – or Station – is to combine and consolidate the tangle of independently-constructed (IRT, BMT & IND) and formerly disconnected lines and stations that snake through this neighborhood, and to rationalize, organize and turn a series of archaic twisting maze of passages into a facility that is easily navigated and humanly (as opposed to rodently) scaled. the MTA couldve done all the construction entirely below ground. But condemnation of the properties would still have been necessary. Constructing a large central structure with ample street frontage for vastly better access and amenities, and an expansive space that allows light, air and openess into the station is perfectly practical.

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AlexB September 10, 2009 - 4:54 pm

You are totally right, but for a billion dollars, aren’t we allowed to hope for something more meaningful than a thoughtful reorganization? The pretty new station and general cleaning up of the existing structures should have been the icing on the cake of a much larger project that brough new transit capacity to downtown.

Side question: is there space in the Fulton St complex or the new PATH complex for a commuter train platform?

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Alon Levy September 10, 2009 - 5:45 pm

No, it isn’t practical. The existing Fulton Street station works. It gets you to where you want to go, and permits transfers among almost all lines passing through Lower Manhattan. The transfers aren’t very convenient, but that’s what happens when you have four lines under four different streets. There’s no more or less light than at other subway stations.

Most subway stations have no need for any above-ground structures, either, much less a mall dignified with the name “transit center.” (A good rule of thumb is that if you’re worried about retail more than about transit circulation, it’s a mall, not a train station). The only exceptions here are stations that serve real train stations, like Atlantic-Pacific or Grand Central.

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Nathanael September 17, 2009 - 9:37 pm

The existing Fulton Street station works. It gets you to where you want to go, and permits transfers among almost all lines passing through Lower Manhattan.

No, it doesn’t. Try being a tourist or someone in a wheelchair — or worse, both. Or someone on a crush-loaded IRT platform. I’ve dealt with all three.

The existing Fulton Street stations all needed to have major reconstruction work for ADA accessibility and passenger volumes, that work was going to require taking most of those buildings anyway, and failing to admit that is just ignorant.

However, doing it only up to the ground level and returning the upper level development rights might well have provided a “non-cash” solution to this problem.

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