Pataki Tunnel: Who Picks Up $6 Billion Toll?

Every few weeks, a couple of well-connected New Yorkers-maybe Carl Weisbrod, a board member of the Lower Manhattan Development Corporation, maybe Governor George Pataki’s chief of staff, John Cahill-make a trip down to Washington, D.C., to lobby what at first looks like an obscure technical point: whether $2 billion in tax incentives can be converted into cash to fund a rail tunnel under the East River.

By all external indications, the reception’s been cool, even as Mr. Pataki is counting on that money to help him announce projects-and project a feeling of progress-in lower Manhattan.

The Lower Manhattan Development Corporation had already arranged a press conference for May 19, to present schematic designs for a massive cultural center that will include a “W.T.C. Memorial Visitor’s Center, Drawing Center and International Freedom Center.”

Money for these cultural projects is largely secure, or being sought through private donations. And unlike Larry Silverstein’s Building 7 or the Freedom Tower, these don’t depend on the free market to work.

Then there are all of the Governor’s downtown transportation initiatives, like the direct rail link between the John F. Kennedy International Airport and the lower Manhattan business district, which would require the rail tunnel under the East River.

Publicly, he’s optimistic about funding the project. But privately, he finds himself breaking a sweat trying to get the money from hostile fellow party members in Washington, and in the Port Authority’s powerful New Jersey contingent.

“This will be the first time we have had a majority of the funds already committed before we even start a capital project of this scope,” he told reporters on May 12.

The rail link wouldn’t just provide a one-seat ride from lower Manhattan to J.F.K.-one that would serve, under optimal circumstances, some 4,000 to 6,000 riders a day. More importantly, its supporters say, the rail link would bring Long Islanders into lower Manhattan via commuter rail-affluent Long Islanders who work as managers and executives but don’t like transferring to the subway.

It would also, one study points out, give affluent professionals who live on Wall Street a better way to get to the Hamptons in the summer.

To say that more than half the $6 billion price tag has been, or even will be, committed is a stretch. Congress is treating that $2 billion in tax credits more like $730 million; and as for the $1 billion from the Port Authority that has been touted as part of the project’s funding, well, that’s not a commitment.

Asked how certain it was that the Port Authority would increase its share, the Governor turned to his trusty ally, Charles Gargano, the vice chairman of the Authority.

“Charlie?” the Governor asked. “Can we count on the Port Authority?”

Mr. Gargano, standing a few feet away, nodded yes.

But Mr. Gargano is a New Yorker. The chairman of the Port Authority, and five other members of the board, are from New Jersey. They have little reason to help Long Islanders get to work in the city-although they might be willing to trade their support if they get another tunnel under the Hudson.

Counting the $560 million that the Port Authority has already slated for the job, and $400 million from the M.T.A., just a sixth of the rail link’s cost has actually been committed. Yet there’s little doubt that the Governor will push hard on this front. Mr. Cahill, the Governor’s chief of staff and now his man in lower Manhattan, says it’s the most important transportation project, and that transportation is the most important downtown concern.

“Ask the folks downtown what is the No. 1 issue, it’s accessibility,” Mr. Cahill told The Observer this week. “Getting trained workers not only from New Jersey but also from Long Island is extremely important to get businesses downtown. It provides a tremendous source of growth over the next several decades. Its payoff will be tremendous, both for lower Manhattan and Long Island.”

The idea of a one-seat trip from Manhattan to J.F.K. has been a pipe dream for a couple of decades now, ever since New Yorkers woke up and realized that there’s something that Paris and London and Tokyo and even Chicago does better than us-namely, get its residents out of town. Or its visitors into town. There is no way to impress foreign visitors more with New York’s largesse than to plunk them down at the end of a line at J.F.K. that doubles back and forth a couple of times and then hand them a pamphlet letting them know that, at a minimum, it will cost $45 (plus tip) to get to their hotel.

Mayor Giuliani liked the one-seat idea a lot, although he was more partial to a one-seat ride to LaGuardia Airport. The AirTrain, a Port Authority project that replaces a transfer to a bus with an equally inconvenient and more expensive transfer to an unmanned vehicle, was the fruit of those Giuliani-era planning studies.

A few months after Sept. 11, though, with the prospect of $20 billion in federal aid coming our way, the Lower Manhattan Development Corporation started talking about it again. “The idea was to make lower Manhattan more appealing than it was before,” said an individual involved in the early planning efforts, who spoke on condition of anonymity. “If you could find a way to bring people to the airport, that would be an enormous advantage. By making the line the way it is now, through Jamaica, all the white-collar types on Long Island, it would be easier for them to make the commute. If you put the two together, there would be a rebirth of lower Manhattan. You could take advantage of the tragedy to make something new happen.”

Other transportation projects-whether untangling the spaghetti junction known as the Fulton Street station, or elongating the South Ferry subway platform to allow riders beyond the first five cars to get off-wouldn’t create any new connections, this individual said. Even the Second Avenue subway, a pipe dream dating from a time before pipes were invented, wouldn’t bring any new people downtown, goes the argument; it would just permit them to exit the Lexington Avenue line with their clothes less wrinkled. People will take the Lexington Avenue line not because it’s a pleasant experience, but because they have to.

Around the same time, John Zuccotti got the idea into the press when he suggested to M.T.A. chairman Peter Kalikow that he run the Long Island Railroad through the A/C subway tunnel under the East River. Mr. Zuccotti, the chairman of Brookfield Properties, at the time saw his company suffering mightily. Brookfield isn’t the largest landlord downtown, but almost 80 percent of its Manhattan properties are downtown-chiefly the World Financial Center, which was suffering doubly at the time because PATH trains, as well as nearby subway stations, were closed right after the Sept. 11 attack.

The A/C idea fell out of the picture early. But a study completed last May for the LMDC recommended digging a new tunnel to bring commuter trains from somewhere in lower Manhattan to the Flatbush Avenue LIRR station in Brooklyn, and from there to Jamaica, Queens, where the trains could either go into the verdant hills of suburbia or on to J.F.K. The tunnel would shave 14 to 15 minutes off the trip for riders who otherwise would’ve had to transfer to the subway-although none of those riders would be from the most affluent section of the island, the North Shore-and 19 minutes off the trip to the airport. This and other options are now the subject of a $60 million environmental-impact statement undertaken by the M.T.A., for which testimony is expected to be taken as early as next month.

Another study completed about the same time by Hamilton, Rabinovitz and Alschuler is even more revealing. It finds that the rail link would create a demand for nine million to 12.5 million square feet of office space in lower Manhattan over the next 20 years-which is fortuitous, because the buildings planned for Ground Zero will represent almost as much space, and they’ll need people to go inside of them.

The link will also spur development in Brooklyn, the study says, increase the value of property on Long Island by $54 million, create lots of new jobs and bring in $64 million to the city treasury in tax revenues. In other words, everybody wins.

But not everybody is equally enthusiastic about the rail link. Not only do transit advocates like Gene Russianoff of the Straphangers Campaign denounce it as a waste of money; Bruce Mosler, the chief executive of Cushman and Wakefield, who is widely believed to be taking Goldman Sachs on its current office-shopping trips, is unsure about the relative importance of the rail link, though he’s much more polite about it.

“I don’t know how to rate the train to the plane,” Mr. Mosler said this week. “Clearly, it would be an important part of improving transportation, particularly for downtown tenants’ ease of access to Long Island and the airports. So you can’t say it’s not crucial, but you have to get the fundamentals out of the way.”

Mr. Mosler, whose company has more square feet downtown than Brookfield does, but which has much, much more in midtown, continued: “One person’s opinion-mine-is that the Second Avenue subway and the link to Grand Central is more important, because that affects commutation from Connecticut and other places. It’s hard to rate that over a link to the airport …. I believe the Second Avenue subway should be the priority. I may be in the minority on this, but that’s O.K.”

The rail link’s supporters insist that the two projects are not mutually exclusive, that they’re funded out of different pots of money. On the bureaucratic level, that’s largely true: If the Port Authority and the federal government pick up the bill, neither the city nor the state has to worry about it. Except that a lot of New Yorkers do have to worry about it-those who pay tolls on Port Authority crossings and fees at its airports. As for the $2 billion in tax credits, well, the whole country has to pay for them, and since Congress, and the President, already said they should help lower Manhattan, what’s the problem with converting them to cash? Hence the trips to Capitol Hill.

“Different people go down at different times and they speak to different people, with the staffs of various committees or the executive branch or our Congressional delegation,” said Mr. Weisbrod, the president of Downtown Alliance as well as an LMDC board member. “The goal is to make sure Congress is well informed on this issue, that Congress appreciates how important this is for the recovery of lower Manhattan, and to ensure lower Manhattan remains one of the world’s great business districts-and, I think, to make it clear that this is a very high priority and it has strong support.”

President Bush has supported converting the tax credits and included them in his budget, but a major problem surfaced earlier this year when the nonpartisan Joint Committee on Taxation determined that the tax credits were really worth just $727 million, which would mean the rest of the money would have to come from the general pot. Last year, the proposal passed the Senate but then got blocked by the House. The chairman of the House Ways and Means Committee, Representative Bill Thomas, is the main hurdle to overcome.

Mr. Weisbrod contends that the chances of Congress approving the money this year are excellent, but that it’s too early to count votes. Indeed, the New York delegation hasn’t figured out which bill it should be attached to yet.

“Congress is more aware of the proposal and know it is part of the President’s budget proposal,” Mr. Weisbrod said. “They are aware it is important for New York and for the recovery from Sept. 11. And given all those factors, and that it enjoys truly bipartisan support, I think everyone would say its prospects are very good.”