City Hall embarked on a huge overhaul of the 911 system several years ago, but the project has been bedeviled by flaws and cost overruns—originally projected at $1.3 billion, the overhaul has cost $2 billion thus far.

Mr. Liu’s audit suggests that HP charged the city for work it should not have performed under terms of the contract. The company billed the city for at least $2.5 million in inappropriate charges, Mr. Liu said, although he contended that the true figure could be as high as $50 million.

City Hall vehemently denies Mr. Liu’s accusations, but Mr. Liu has forwarded his report to the Manhattan District Attorney’s office.

It certainly could be true that Mr. Liu is playing politics here. But his report does have evidence that HP may have charged the city for such tasks as killing water bugs in restrooms, or removing trash for the eye-opening sum of $192 an hour.

These charges deserve investigation. And if HP did, in fact, bill the city for work it should not have performed, a refund surely is in order.

The company, a real estate development and acquisition firm, could shell out nearly $60 million for the site according to sources familiar with the parcel, which sits next to the popular elevated High Line park on the West Side at 511 West 21st Street.

Jay-Z (photo courtesy of Getty Images)

An 88,000-square-foot warehouse currently sits on the site but about 140,000 square feet can be built there. Because the parcel is located in a manufacturing zone, only retail, hotel or office, but not residential space, can be constructed. .

An investment group that included Shawn Carter, the rapper known as Jay-Z, purchased the site in 2007 at the height of the real estate market for over $50 million, eventually laying on millions of dollars more to buy additional air rights and develop a hotel there. Work never started on the project, however, and the group defaulted on their mortgage by 2009 when the recession hit. Eventually a deal was reached for Jay-Z to hand the property over to lender Highland Capital, a Texas-based investment fund.

Prices tanked in the neighborhood during the tough economic times and for a time 511 West 21st Street was especially hard hit because of its zoning restrictions.

Alan Miller, an executive at the sales brokerage Eastern Consolidated who arranged the property’s sale to Jay-Z but is not involved in the present transaction, said a prominent real estate investor and developer active in that neighborhood told him in 2009 that the site wasn’t worth $150 per buildable square foot—less than half what it’s trading at now.

The value has surged back, in part because of the way Manhattan’s real estate market as a whole has recovered but also due to the success of the High Line park and the surrounding neighborhood’s growing popularity as an area for new development.

“Between 10th and 11th Avenue is gold,” Mr. Miller said. “It slowed down for a couple of years but the bounceback in pricing is simply astonishing.”

Sources familiar with the deal that Highland is arranging with the Albanese Organization say it will allow the investment fund to exit the property at a profit, likely putting the purchase price somewhere just under $60 million, a figure that could not be verified by press time.

The Albanese Organization has had recent success in the West Chelsea neighborhood. The firm, led by its chief executive Christopher Albanese, bought the Chelsea Art Museum at 556 West 22nd Street earlier this year for $19.35 million. Onlookers wondered what the company would develop at the site since it came with air rights. The Albanese Organization surprised observers by leasing the 35,000 square foot property to Hewlett Packard and selling off the property’s buildable rights.

It’s not clear what type of structure the Albanese Organization will build on 511 West 21st Street, since it is zoned for office or hotel. One source said that the firm could go ahead with a hotel project or convert it into a high end art gallery, an industry that has thrived in West Chelsea. Another source said he wouldn’t be surprised if the Albanese Organization built an office property at the location. Though few developers have undertaken the construction of office space in recent years, the site is near the Meatpacking District, an area that has become increasingly popular as a destination for office tenants and that commands premium rental rates. The source estimated that in that scenario, the project’s economics would require the Albanese Organization to charge office rents at least $80 per square foot.

The Albanese Organization nor reps at Highland Capital could be reached for comment.

dgeiger@observer.com

The Kindle DX, which can handle PDF files and can rotate like an iPhone, will sell on Amazon.com for $489.

"Wonderful!" Shouted Mr. Sulzberger, who seemed very excited.

Mr. Bezos, who late last week unloaded 200,000 shares in Amazon stock, according to the Pragmatic Capitalist, appeared before the crowd in loose-fitting jeans and a blazer, sans tie. Mr. Sulzberger was also casual in earth tones. He was missing his tie, as well.

Standing in front of a giant projection Steve Jobs–style (despite a few technical glitches—woops!), Mr. Sulzberger told the crowd that The New York Times, The Washington Post and The Boston Globe would be offered at reduced prices to readers who live in areas where home delivery is not available and who sign up for long-term subscriptions to the Kindle editions of the newspapers. He referred to this as a marketing test.

Additionally, 37 national and international newspapers would be made available on device with monthly subscriptions of $5.99 to $14.99 per month. Twenty-eight magazines, including Time, The New Yorker, The Atlantic, Forbes and Fortune, with subscriptions ranging from $1.25 to $8.99 per month, are also Kindle-ready.

Mr. Sulzberger called the Times Company's embrace of the Kindle DX "an important milestone in the convergence of print and digital."

"We at the New York Times company are delighted to make use of the Kindle DX," Mr. Sulzberger continued. "We know that the e-reader can offer the same satisfying experience [as the print edition]."

One source at The Times said that the Kindle DX is held by some in the building as an answer to what's been plaguing the news industry.

This isn't the first time Mr. Sulzberger has been talking to executives about a new toy. Another source said that Hewlett Packard CEO Mark Hurd met with Mr. Sulzberger in the Times Building on the afternoon of April 14 to "discuss business" after Mr. Hurd had met with the Biz Day staff (and one Hewlett Packard person in the room also said that HP had met with Time Inc. execs in Palo Alto a few weeks earlier).

The Times—and other news organizations—has been looking forward to just such a device for a while. In January, The Times' David Carr put out a desperate plea in his Monday Media Equation column: Let’s Invent an iTunes for News. Mr. Carr cited a posting on TechCrunch in which Michael Arrington hinted at a breakthrough device on the horizon, "a large screen iPod touch device to be released in the Fall of '09, with a 7 or 9 inch screen."

Who could blame Mr. Carr for being excited about such a thing. (This paper was excited about the idea, too.) While it's arguable that Apple's iPod and iTunes Store furthered the music industry's decline and chipped away at the integrity of albums by selling singles piecemeal, publishers and media workers desperate for something—anything—that can keep them afloat are waiting with bated breath for just such a device and a related revenue model.

Also in January, Business Insider's Nicholas Carson crunched some numbers and determined that it would be cheaper for the New York Times Company to distribute Kindles to its subscribers than continue printing the paper every day.

On Monday, The Times' Brad Stone reported on a large-screen Kindle aimed at newspaper and magazine readers and the next day, Time's Josh Quittner brought word that Amazon's Jeff Bezos and the New York Times Company's Arthur Sulzberger would be presenting the new device, thereby "signaling some kind of partnership between the Times and Amazon."

We'll be watching as this partnership continues.