Good Deal for NYU and N.Y.C.

When Mayor Bloomberg announced the other day that the city would, in essence, provide New York University and its partners with a rent-free building for a new school of applied science in Brooklyn, a reporter asked why an elite school with a large endowment deserved such a sweet-sounding deal.

If Mr. Bloomberg was prepped for such a question, it showed. NYU, the mayor quickly noted, planned to spend $60 million of its own money to move Transit Authority equipment and city personnel out of the building it intends to occupy. “We should be saying thank you to them,” Mr. Bloomberg said.

Truth be told, NYU doesn’t need public expressions of gratitude. All it needs is the city’s continued commitment to a bold and visionary plan to transform parts of the city into a veritable hothouse of high-tech research. NYU’s plans for downtown Brooklyn are part of a larger blueprint designed to attract world-class scientists and engineers to New York City, allowing it to compete with Silicon Valley and other research centers around the country.

In partnership with the City University of New York, the Indian Institute of Technology, the University of Toronto, Carnegie-Mellon and the University of Warwick, NYU will transform the former headquarters of the Transit Authority into a state-of-the-art campus that will attract cutting-edge faculty and top-flight students. The building is virtually vacant—few transit employees actually work in the building. The Police Department occupies some space, but NYU will pay for the NYPD’s relocation costs as well as the Transit Authority’s.

In return, the school will get the building and about $15 million in tax breaks and other savings for a dollar a year. Renovation of the building, expected to take several years, will create about 2,000 construction jobs, according to the mayor. The city estimates that the project will generate about $5.5 billion in economic activity during its first 30 years. Tax revenues over that same period will be about $597 million, according to the city.

That alone would make the project more than worthwhile. But it’s important to remember that the NYU initiative is part of a larger vision for the city’s 21st-century economy. Months ago, the mayor announced that Cornell University and Israel-based Technion won a bid to construct a $2 billion engineering school on Roosevelt Island. That project attracted bidders from around the world, ratifying the mayor’s contention that the city could attract global leaders in the sciences to New York.

The NYU-led project in downtown Brooklyn will help spread the benefits of the city’s knowledge economy, and, just as important, will enchance the city’s new-found reputation as an inculcator of high-tech research and development.