Home MTA A tenuous relationship between transit and developers

A tenuous relationship between transit and developers

by Benjamin Kabak

Vornado says they will fund and maintain transit improvements underneath 15 Penn Plaza. (Click to enlarge)

The relationship between transit and development in New York City is a tight one indeed. While early subway routes snaked their way through population centers of the day, the expansion of the system throughout Brooklyn, Queens and the Bronx spurred on dense development in areas of the city far from Manhattan’s Central Business District. It’s no stretch, then, to say that without the subways, the city wouldn’t be as big and as far-flung as it is, and landlords wouldn’t be nearly as well off as they are.

Why then do management companies and building owners have such a tenuous relationship with transit investments? Those constructing new buildings and complexes that will exert a pull on the transit system must contribute to expansion plans, but those landlords who enjoy the benefits of transit improvements are reluctant to pay for routine maintenance and upkeep. The Union Square escalator saga is a prime example of that phenomenon.

In the Real Estate section in today’s Times, Julie Satow explores how the MTA is trying to work with developers to improve investment in transit-related properties and encourage better cooperation between interested the parties. She writes:

There are more than 600 miles of subway track and hundreds of stations in New York City, and zoning requires that developers in high-density areas like Midtown Manhattan, Union Square and Downtown Brooklyn move nearby subway entrances into their property lines and renovate them. As a result, private entities may be responsible for public services, a situation that some experts say is not always ideal.

“The M.T.A. has learned the hard way that it is one thing to ask a developer to make an upfront capital investment, and quite another one to maintain something on a day-to-day basis over the years,” said Juliette Michaelson , the director of strategic initiatives at the Regional Plan Association, a policy, research and advocacy group. “In 10 years, when that escalator fails, who fixes it? These details must be worked out in advance.”

To improve its dealings with private developers, two years ago the transit authority quietly opened a three-person Office of Transit-Oriented Development. It hired Robert Paley, a real estate expert who spent time in the private sector — as an executive at AvalonBay Communities he helped develop Avalon Chrystie Place on East Houston Street — and also worked previously at the M.T.A. on projects like the Atlantic Terminal Mall in Brooklyn.

Paley, writes Satow, is in charge of coordinating “the many public agencies and other stakeholders that are often involved in large, privately financed transit improvements.” His role, he says, is taking on increased importance as the real estate market begins to rebound. “It was very quiet when I first came onboard, but in the past several months, the phone in our office has begun ringing, indicating to me that developers are warming to the idea of building again,” Paley said.

The test case for the authority’s new approach will be Vornado’s plan to reopen the Gimbel’s Passageway as part of its 15 Penn Plaza development. Vornado is hoping to build a two-million square foot office building at 15 Penn Plaza, and in exchange for gaining an exemption to the zoning regulations, it has pledged to fund extensive transit improvements at Penn Station.

Paley wants to hold the company’s feet to the fire. “if the construction starts, and the building moves quickly, there is a risk that the public improvements that were promised will get left behind,” he said of efforts to secure a firm plan for the upgrades before 15 Penn Plaza rises.

Still, as Satow highlights, even these pre-build deals don’t fully address issues of continuing maintenance. That’s the real problem. Escalators that remain broken and never get repaired are a blight upon the system and inconvenient as well. Entrances that remain closed over disputes between upkeep — such as the one at the north end of the 50th St. station along 8th Ave. — lend only the illusion of access. Developers and building owners should be more committed partners in this dance, and hopefully, Paley can realize that goal.

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John-2 March 16, 2011 - 9:40 am

I’d rather see a direct basement-level entry into the subway and some sort of retail mall area in the lower level of 15 Penn Plaza than an escalator outside the building but on Vornado property that is exclusively dedicated to subway access. That’s the problem with the Zeckendorf escalators at Union Square — because they don’t have any direct use for the building’s business tenants, there’s no urgency on the part of the landlord to fixing the damn things.

As for the Gimbel’s corridor, as big a building as 15 Penn Plaza would be, I would assume Vornado would want multiple access points from the basement level to the corridor, for access to both the Penn Station and Herald Square subway stops. Part of the problem with the old tunnel was by it’s end whatever access points to Gimbel’s and the Hotel Pennsylvania that had been there were gone, meaning there was no side flow of people in and out of the corridor. Combine that were the rising crime rate of the period and you had a very long walkway with no mid-point entry/exit options.

(I’m not really all that hot on the design of 15 Penn Plaza, since it looks to be a mismatched twin tower for the Empire State Building. But if Amtrak is serious about the Gateway Tunnel project and a new terminal and commercial development of the block south of Penn Station, doing it in tandem with the Vornado project probably increases the odds of being able to re-brand the area as more of a business office zone similar to the Midtown business areas between 34th and 57th streets.)

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