August 06, 2004
Hudson Yards end run to cost NYC billions?
The New York City Independent Budget Office, which last month issued a warning that the Jets had overstated the likely benefits of their proposed Manhattan stadium, yesterday released another report (PDF file here) on the accompanying Hudson Yards plan, and it wasn't a pretty picture.
According to the IBO analysis, the city's plan to use PILOT payments generated by new development in the district - designed to avoid legislative oversight of the plan - would cost the city an additional $1.3 billion over time, compared to using the normal capital budget. The IBO report also notes that because the plan would rely on future office development to pay back bonds issued now, even a small delay in either construction of a new subway line (which would account for the bulk of the $2.8 billion in bonds) or accompanying office space could have dire fiscal consequences for the city, noting: "There is essentially no room for slack before 2020." (Of course, delays in building a new subway line could never happen in New York.)
Other findings from the IBO report:
- To fill the 28 million square feet of new office space planned for Hudson Yards, the city projected an annual growth in office employment of 0.9% a year - one-and-a-half times the actual historic growth rate. "If the quantity of office space demanded in Midtown is just two-thirds of the projected quantity," says the report, "the plan’s assumptions imply that new Midtown construction could satisfy the full demand—leaving no excess demand for Hudson Yards to fill."
- The 15-20% property-tax discount to developers - discussed in my Village Voice article earlier this week - would actually be higher in the initial years of the project, with additional tax breaks of as much as 40% to encourage early adopters.
