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.