Toward the end of an industry luncheon one recent Wednesday, after the roast chicken but before the fruit torte, prominent real-estate lawyer Jonathan Mechanic announced that the Related Companies and Vornado Realty Trust had landed the contract to develop the Farley Post Office at Eighth Avenue and 33rd Street into the next Grand Central Terminal. It was, he explained, one of the keys to the development of the West Side-and, considering the Jets stadium proposal had just disintegrated two days earlier, the only key within reach.
It was a plum contract, as the developer would control 100,000 square feet of retail space, another 750,000 square feet of potential office space, plus one million square feet of air rights, all with significant tax breaks. In other words, the project-the creation of the new Moynihan Station-will be not just the next Grand Central, but the next 10 Grand Centrals all at once. It was such a long-awaited project, dating back to the invention of the wheel, that the couple hundred real-estate-niks in the audience nodded knowingly. And then they looked around not so knowingly: Was there something in the paper about this that they missed?
There had been rumors on the Internet, to be sure, but in terms of a confirmed, signed, ready-for-the-publicity-department contract, no one had said a word. Mr. Mechanic nevertheless congratulated David Greenbaum, president of Vornado’s New York office division, sitting a few tables ahead of him, and asked how soon the station would be ready. Cushman and Wakefield C.E.O. Bruce Mosler, sitting on the dais as part of the day’s panel, chimed in. “Which is it, David? Two years or three?” He held up two fingers on his right hand, three in his left. The room erupted in laughter, but Mr. Greenbaum muttered something about being a public company and fell silent.
While a state official confirmed that the Related and Vornado partnership is indeed in final negotiations over the lease terms and price with the agency in charge of the project, the Empire State Development Corporation, so is Mortimer Zuckerman’s Boston Properties. To a lesser extent, the ESDC has also negotiated with another bidder, Tishman Speyer, which has partnered with Jones Lang LaSalle, the official said.
The final decision is to be made by the end of July, according to a state official. But then again, the ESDC had said some time ago that it would decide by January. And before that-well, it had named a developer once before for this project, four years ago, only to change the specs so significantly that it had to bid out again.
“We are in the final stages of our evaluation to select a developer for Moynihan Station,” ESDC chairman Charles Gargano said in a prepared statement. “This project will be the catalyst for the development of the far West Side of midtown Manhattan.”
The station’s appeal is obvious to just about everyone-except the people who were supposed to operate there. Indeed, this is the sort of project with many proponents and no opponents, and yet it is between five and seven years behind schedule, depending on whose timetable you’re using.
Politicians, including the late Senator for whom the station will be named, have long championed Moynihan Station as a way of making up for the loss of Pennsylvania Station, which was torn down to make way for Madison Square Garden four decades ago. No longer will thousands of commuters crawl like ants out of the fetid tunnels of Penn Station and squint when they see daylight. The Skidmore Owings & Merrill design would still put the train platforms underground-they have to be-but will open up the ceiling by means of a giant skylight.
It turns out, according to a few developers and planners, that the city doesn’t need a Jets stadium to develop the West Side, and it might not even need the No. 7 line extension, which was supposed to bring the subway west on 42nd Street to 11th Avenue and then south. And we’re not just talking residential development, which could be built on piers in the Hudson River and still sell in today’s voracious market. “The thing we’re really waiting for is the Farley Post Office,” said one executive at a real-estate company. “Once that comes through, you’ll have commuters streaming through to Ninth Avenue and it will make that area that much more attractive to employers and retailers.”
The office space in Moynihan Station-including a possible tower that would be put atop the rear post-office annex along Ninth Avenue-could well become the first commercial building to go up in the so-called Hudson Yards district. What’s more, if Moynihan Station becomes a commuter hub for New Jersey Transit, which is still unsettled, it would bring mass transit a block further west.
“We always thought that real-estate market would evolve out of Penn Station, which is already a central business district of a sort,” said Anna Levin, co-chair of the land-use committee for Community Board 4 on the West Side. “We actually think it makes more sense that way-development will proceed along 34th Street as opposed to 11th Avenue, which is much further away.”
Culture of Inertia
Indeed, political and business leaders are beginning to wipe away the tears they shed after the Jets stadium fell through, if they had shed any at all. Senator Charles Schumer decried, again, what he calls “the culture of inertia” during a recent appearance, though he had never taken a position for or against the stadium in the first place. And he believed that development would continue on the West Side, not only without the stadium but without the tax breaks that the Bloomberg administration was planning to extend to developers who would put up office towers nearby. Instead, he said, focus on the bringing the subway west and aim those incentives instead at Ground Zero, where 4.3 million square feet of office space is going up with only token tenants committed so far.
“Traditionally in this city, infrastructure alone is sufficient to induce development,” the Senator said. “Once developers believe the No. 7 line extension is for real they will flock to the area and property values and concomitant property-tax collections will soar.”
Many in his audience agreed. “What was important about the city’s incentives for the West Side was that they would bring about enough development quickly enough to get the subway line built in time for the Olympics,” said Kathryn Wylde, the president of the Partnership for New York City, a Chamber of Commerce–type group. “Absent the pressure of the deadline of the Olympics, we don’t need the incentives.”
A few feet away, William Rudin, the chairman of the Association for a Better New York, and a member of a prominent real-estate family himself, added, “I agree with the Senator that the focus has to be on lower Manhattan. For downtown, it’s critical to get these things done now. The West Side will happen down the road.”
The Mayor is not so sure. Later in the day, spokesman Ed Skyler said Mayor Bloomberg is moving ahead with both the No. 7 extension and the tax incentives. “We share the Senator’s beliefs that public money should not be wasted on unnecessary tax breaks,” Mr. Skyler said. “These are targeted incentives approved 45 to two by the City Council and designed to provide jobs, affordable housing, park land and tax revenues. We have no plans to scale back the incentives.”
How much of a difference the $600 million Farley makeover-not counting the money the developer will spend preparing office and retail space-is going to make on the West Side depends on when, or even whether, it gets made over. The Farley building-call it Moynihan Station if you are optimistic-has become the poster child of a bureaucracy that moves about as fast as the M23 bus. But it’s also an example of a project pushed from above with little support from below. It is easy to see how a pretty building can instill civic spirit and please the public, but will it get people to take more trains? Many agencies are involved, and it’s not clear how many of them are really excited about it to pay for it (though almost all of the money has already been committed). Contrast that to the Grand Central Terminal renovation, which was certainly primed and prodded from outside, but fell squarely in the M.T.A.’s hands. The renovation of Union Station in Washington, D.C.-the other major template-was created by and for Amtrak.
The U.S. Postal Service, after first balking, finally came around as a partner in the project after the state offered to buy the building and lease back a portion. (The post office will still operate there, but in a smaller space.)
Amtrak, for whom this new station supposedly was being built, bailed out on the project a year ago, battered fiscally and politically. But from the get-go, the technical parameters of subterranean space would have limited how much good Amtrak would have gotten out of it. Passengers could have entered the tracks from Moynihan, according to Amtrak spokesman Clifford Black, but for the most part they would have ended up backtracking east toward Penn Station. That’s because the project never called for moving the tracks or the platforms, just the entrances to them.
A state official involved in the project counters that it was Amtrak that came up with the idea of redoing Farley in the first place, and it did so to relieve crowding on the eastern ends of the platforms most accessible from Penn Station. Amtrak, according to the official, was planning to keep Penn Station open even if it followed through on Farley.
Still, according to an individual familiar with the layout of the tracks, just nine of Amtrak’s 21 tracks have platforms that extend more than 200 feet below Farley. The longest ones, which measure a total of 1,600 feet, have about a quarter of their length actually below Farley.
New Jersey Transit is the leading contender to replace Amtrak, and the state hopes to sign an agreement about how much the commuter rail will contribute to the project by July 31. Yet New Jersey Transit, which uses Amtrak’s tracks, will find itself in a similar position, and is still expected to retain facilities in Penn Station as well. Still, with traffic growing quickly on its tracks, New Jersey Transit needs all the space it can get its hands on.
The Long Island Rail Road may also use Moynihan-but again, primarily as an access point. The LIRR’s parent agency, the Metropolitan Transportation Authority, has committed $35 million to extend a concourse below Farley’s Eighth Avenue steps that will connect its various tracks, according to a state official.
There are those, including Senator Moynihan’s daughter Maura, who believe that the technical difficulties of conforming to one user or another is something that can be overcome, given enough willpower, and that such willpower will increase exponentially once a developer comes on board.
“The reason the choice of developer is so important is that we will have all that energy and talent that the private sector brings with it,” says Ms. Moynihan, who has founded the Moynihan Station Citizens Group to advocate completion. “The stadium debate consumed everyone’s attention. Now we can refocus on Moynihan Station.”
Hold out those fingers again, Mr. Mosler. How many do you see?
Follow Matthew Schuerman via RSS.