Home MTA Economics The $600 million South Ferry conundrum

The $600 million South Ferry conundrum

by Benjamin Kabak

Uptown & The Bronx, if you have a boat or submarine handy. (MTA New York City Transit / Leonard Wiggins)

Since getting wind of the MTA’s $600 million request for funds to repair and restore the South Ferry/Whitehall St. station complex, I’ve had a tough time wrapping my head around the exceedingly high figure. The total — which may not include repairs to the Montague St. Tunnel or nearby Broad St. station — is over ten percent higher than the cost of constructing the new South Ferry station, and a time when budgets at any level are maxed out, it seems on the surface to be just another example of the MTA’s inability to rein in capital construction costs.

The South Ferry price tag isn’t the only shocking number from the MTA’s Sandy Impact List. Restoring the A train’s Broad Channel connection to the Rockaways will cost $650 million, and repairing the damage to the signal system will run up to $770 million, nearly as much as initial estimates for a full CBTC treatment of the Queens Boulevard line. While we can argue that emergency dollars from the feds represents an untapped revenue stream of which the MTA should take full advantage, something else might be at work here. The MTA may be overestimating it needs.

After facing a rumbling of shock over the cost estimates, officials at New York City Transit have repeatedly stressed that the figure is just a guess for now. They don’t know how much it will cost and hope to get the total well below $600 million. Ted Mann of The Wall Street Journal followed up this argument with a piece on South Ferry this evening. He writes:

The Metropolitan Transportation Authority is still in the earliest phases of assessing the damage to its facilities, including how much it will cost to rebuild South Ferry, which filled with flood water and debris carried in by the tidal surge of superstorm Sandy…The MTA will seek to repair damage to South Ferry for less than the $600 million asking price, Transit Division President Thomas Prendergast said on Tuesday.

The transportation agency is keeping its damage estimates high enough to account for potentially high costs of reconstruction–especially if the station suffered serious structural damage–or for expensive components like escalators and elevators that could need to be replaced. “You don’t want to pad” damage estimates in seeking federal aid, Prendergast said. “If you destroy your credibility by padding numbers, that’s bad too. But you start with a number that you think is going to capture all your costs and you work back from that. And if we find we end up delivering it less, we’re not going to bill anybody for more.”

There is the possibility — though no guarantee — that some damage estimates will fall as evaluation continues and repair work begins in earnest, Prendergast said. “When you’re dealing with third parties who may reimburse you, you never want to start low and then work high,” he said.

In a sense, the MTA is following a practice it rarely pursues: By overestimating the costs now, the agency may look better in the public eye when repairs come in below target. They also may not know the full extent of the damage, and it is possible as well that the repairs will cost that much. After all, the entire South Ferry station was flooded, and salt water mitigation and subsequent repairs and hardening efforts will be substantial.

Still, these estimates bring to light a problem that has bedeviled the MTA for decades: Construction costs in New York City cannot remain this high if the MTA wants to continue to expand its network to meet growing demand. We can’t pay $600 million to repair a single subway stop just like we can’t pay $4.5 billion to build barely two miles of new subway. The MTA has needed to engage in a serious discussion of its capital construction spending scale for years. Maybe Sandy can push that dialogue in the right direction. After all, New Yorkers are beginning to suffer from subway repair-induced sticker shock.

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Brian November 27, 2012 - 11:24 pm

To me the only explanation of how it is so high is that they are including preventative measures so it wont flood in the next storm ie. they are including the cost of flood gates for South Ferry in that 600 million

John-2 November 28, 2012 - 12:11 am

The $650 million for the Jamaica Bay trestle probably doesn’t take people’s breath away as much as the SF repairs, because there’s no recent past yardstick to compare it to. The TA upgraded the old LIRR trestle in the early 1950s when Eisenhower was president — odds are there are few people still using the line to the Rockaways who actually rode it when it was LIRR property or could tell you how much that project cost, either in 1950s cash or in inflation-adjusted 2012 dollars.

In contrast to the A line extension opening when Ike was in the White House, when the new South Ferry station opened Obama already was in office. So there are tens, if not hundreds of thousands of people who both remember and used the old South Ferry station and who were shocked just a few years ago that it would take $530 million just to build one station, even if they didn’t delve into the byzantine world of New York City construction costs and enjoyed the ability not to have to remember to get into the front of the train to get off at the station. But they probably don’t want to hear that the money has to be shelled out again, even if the feds to kick in some relief funds.

Because of that, while highballing the reconstruction estimates might not be a bad strategy, in order to avoid ending up with a ton of change orders during construction, highballing this reconstruction effort so soon as it opened — and to the point it costs more than the new station did in the first place — is liable to lose the MTA much of the goodwill it gained from it’s post-Sandy restoration of other parts of the system (i.e. — once people or local politicians remember the SF loop station, instead of getting their funding to restore the new station, the MTA may end up seeing it placed at the very back of the list of repairs, with only stopgap funding approved to revive the loop station and give Staten Island riders restored access to the 1, even if it is only the first five cars).

pea-jay November 28, 2012 - 6:02 am

Arent costs also inflated due to the speed at which repairs will be done? I mean the MTA wasn’t moving heavens and earth to get the original south ferry opened in 2009 as it is doing to get it reopened 2012/13?

Jeff November 28, 2012 - 11:55 am

Probably. They are working around the clock, probably close to 24/7 to get service restored. All that overtime and double overtime will add up extremely quickly.

Larry Littlefield November 28, 2012 - 4:01 pm

That’s the theory, but the history says otherwise.

After 9/11, the restoration of the #1 line was done in less than a year, and came in well under budget.

The Fulton Transit Center, SAS and ESA went on for years. Costs exploded.

Bolwerk November 29, 2012 - 2:16 pm

What goes up in an emergency is productivity. Compensation may go up too, but it goes up to whatever the contract says someone gets for overtime. Productivity is probably literally increased many times over. Getting things done in a timely fashion saves in the future.

I think it’s safe to say a lot of unnecessary red tape just goes out the window in “emergency” situations.

Larry Littlefield November 28, 2012 - 7:17 am

“Construction costs in New York City cannot remain this high if the MTA wants to continue to expand its network to meet growing demand.”

Construction costs cannot remain this high if the MTA only wants to abandon small parts of its network and retain the rest. Most of the MTA’s costs are for ongoing normal replacement, and since this cannot be afforded, it has been borrowed for.

stan November 28, 2012 - 8:30 am

maybe when they reconstruct south ferry it won’t immediately start leaking and decaying and looking like the inside of one of the the restrooms at old shea stadium

but you know it will

D in Bushwick November 28, 2012 - 11:53 am

You’ve hit the nail on the head. It’s ridiculous how that many-columned station started leaking almost immediately and so now they want to basically start over.
These ridiculously high estimated costs are likely in order to rebuild most of the subway system and hoping the Fed will pay for it. Most everything seems to be running fine now but apparently they still want to rebuild it all.
It’s always and only about money…

Herb Lehman November 28, 2012 - 9:07 am

The MTA did an amazing job restoring service to this point… but it’s driving me crazy, as a Staten Islander who relies on this station, that now it seems like games are being played with South Ferry. It’s not an option to not repair this station in a timely manner, nor is it not an option not to restore R service to Whitehall Street. Has anyone here been on the 4/5 line during the morning rush hour lately? It’s gotten to the point of dangerously crowded.

Marc Shepherd November 28, 2012 - 1:02 pm

What kind of “games” do you think they’re playing? You’ve seen the photos, right? That station was practically destroyed. I don’t see any indication that they’re deliberately slow-going it.

Jerrold November 28, 2012 - 7:50 pm

If the vehicular tunnels are being restored at such a rapid rate, then why can’t the R train tunnel be restored at the SAME rate?
If worst came to worst, they could even have the R train skipped Whitehall St. until that station is usable again.

alen November 28, 2012 - 10:12 am

$650 million to completely gut the station, clean it out of all the toxic waste in there, rebuild it and properly dispose of all the toxic trash doesn’t sound too bad.

if you figure $50 an hour including pay and benefits to the people ripping out the tiles by hand and putting in new tiles by hand it doesn’t sound too bad.

it cost me almost $1000 for tiles for a bathroom wall of a few hundred square feet. buying tiles for a whole station will add up

Eric November 29, 2012 - 7:33 am

It cost you about $3 per square foot. The station’s surface area is, let’s be generous, maybe 50000 square feet. How did $150 thousand become $650 million?

alen November 29, 2012 - 4:43 pm

there is no way the wall surface area of the station is only 50,000 square feet

Someone December 2, 2012 - 7:10 pm

Maybe 200,000,000 square feet, it sounds reasonable, but $600 million of the $650 million will probably go to re-tiling the walls…

ajedrez December 10, 2012 - 10:41 pm

$600 million for retiling walls? I’m cracking up so hard, it’s not even funny.

A train is 600 feet long. The station is what? Like 15 feet high. Something like that? So for both sides of the station, that’s 18,000 square feet, which is $54,000. (And that’s not even taking into account the fact that the MTA gets bulk discounts). Tell me how $54,000 became $600 million. Let’s say you have to do the (R) station, and replace the floor tiles, and replace all the tiles on the mezzanine (sp?). No way does it come out to $600 million to replace the tiles. I don’t know why I’m wasting my time explaining this.

David Brown November 28, 2012 - 10:22 am

What really disturbs me is how the MTA has no concept about the costs involved in the various projects they try to complete. If anyone remembers they had a huge additional cost at South Ferry because someone forgot to measure correctly. The big question is can we afford or not to rebuild this station, and if so, what is the true cost, and who pays? To be honest, most people would not mind paying an extra .25 or .50 cents on their various rides, if and this is a big if, that money is spent at South Ferry & The Rockaways, and steps were taken to make sure this mess cannot happen again.

Jeff November 28, 2012 - 12:00 pm

They had a huge extra cost at the station because somebody screwed up, and when someone screws up in construction there will be a big cost. Its got nothing to do with whether MTA has concept about costs involved or not. Estimating construction costs is a tricky thing and nobody ever gets it 100% right. Its impossible.

As far as who’s paying for the damages, that’ll be the insurance companies and the federal government (FEMA), same as everyone else who suffered damage in the storm. Its not an issue of whether the MTA can afford it.

Jerrold November 28, 2012 - 3:28 pm

I DON’T remember, but I believe you.
Could you post a link to some source of information about that measurement screw-up?

Jim November 28, 2012 - 11:36 am

Back when I was a bureaucrat, if I didn’t want to do something I’d become very pessimistic when costing it out. Just saying.

Tower18 November 28, 2012 - 12:15 pm

This isn’t really related (except in being another capital project), but there wasn’t a weekend closures thread for this past weekend.

What in the world is necessitating the bi-weekly shutdown of the F between 18th Av and Jay St? God, it’s horrible…awhile back, they were re-aligning the tracks after they finished repairing the Coney Island-bound local, but now I can’t figure out what they’re doing that requires shutting the line. And why didn’t they finish work on the express tracks before doing whatever it is that they’re doing? Maybe then they’d be able to send trains express instead of shutting down entirely.

Jerrold November 28, 2012 - 3:22 pm

Ben, do you have any idea why they would FINISH a project, and then NOT OPEN it?
The 47th St. (east of Park Ave.) entrance to Grand Central has been obviously finished for some time now, but the street-level doors to it are always locked.
That location is such that the storm could not have flooded it.
I noticed that the surrounding building has recently sprouted a scaffolding, but that is clearly there for some kind of work on the building, rather than being related to the station entrance.

Francis Menton November 28, 2012 - 4:51 pm

If it costs $600 million to repair this station, then the obvious answer is to scrap it and build an identical brand new one right next to it, since we know that that can be done for a mere $530 million.

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jsbertram November 29, 2012 - 7:49 pm

If the trains are using through the old loop to head back uptown, why can’t the old South Ferry station be re-opened while New South Ferry station is being rebuilt?

I’ve heard the gap fillers have been disabled, but if they are still in place it should be reasonably fast to get them working again & get old South Ferry back in service.

Someone December 3, 2012 - 7:32 pm

“Restoring the A train’s Broad Channel connection to the Rockaways will cost $650 million, and repairing the damage to the signal system will run up to $770 million, nearly as much as initial estimates for a full CBTC treatment of the Queens Boulevard line.”

Is there CBTC being installed on the Rockaways line too? That’s what it sounds like, because only a full renovation of the signal system would cost that much.

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