Mr. Foye: “How about tomorrow at 8 a.m.?”

Mr. Chakrabarti: “Won’t you have a hangover?”

Mr. Foye: “It doesn’t matter. This is important.”

And so, just a matter of hours after Mr. Spitzer won, Mr. Foye—not even announced as chairman of the Empire State Development Corporation—began to chart the course of an entirely new office district with a double-headed train station. Since then, Mr. Foye and others who work for him have been moving forward quickly to get Moynihan Station back on track after its demise in the final months of the Pataki administration, expanding the scope of any project to include the so-called Plan B, which would involve a new Penn Station as well.

Mr. Foye, according to sources both inside and outside the Spitzer administration, has organized a working group of representatives of the train lines that use the station—Amtrak, New Jersey Transit and the Metropolitan Transportation Authority—which has been meeting weekly with the developers, Vornado Realty Trust and the Related Companies, to understand the logistics of a new design.

He has also, according to these sources, come to believe that the private developers need to share some of the approximately $1 billion cost of ripping Penn Station open to the sky and of earning undying fealty from the 550,000 daily commuters who currently snake around the subterranean tunnels that some have come to call “the pit.”

THESE EFFORTS HAVE BEGUN TO PAY OFF.

On Feb. 2, the ESDC signed a memorandum of understanding that extends the state’s option to purchase the Farley Building from the U.S. Postal Service, according to Postal Service spokesman Bob Anderson.

Former Governor Pataki’s chief economic-development czar, Charles Gargano, had been trying to do the same—the purchase price was set at $230 million—but was unable to do so before he left office on Dec. 31.

However, the option only lasts until the end of March, which suggests that Mr. Foye plans a quick purchase or will have to renegotiate yet another extension. An ESDC spokesman wouldn’t elaborate.

In addition, Mr. Foye, who got to know Mr. Spitzer and his wife, Silda Wall, while all three were lawyers at Skadden, Arps, Slate, Meagher & Flom, has made the Moynihan pitch as part of his meetings with elected officials and civic groups.

“We are taking a fresh look at each of the projects from the Pataki administration, and we are looking at them on an expeditious but deliberative basis,” Mr. Foye told The Observer.

Mr. Foye and the developers declined to be more specific about any talks. But the interest Mr. Foye has shown in reviving and expanding the Moynihan Station plan has made some observers convinced that he has put it at the top of the new Governor’s economic-development agenda.

But in doing so, this genial, bearded Long Islander is diving headlong into a pit of a different kind: Steven Roth, the chairman of Vornado, which already owns a number of buildings near Penn Station and a portion of its air rights, is known as a relentless negotiator. Jim Dolan, the chairman of Madison Square Garden, is known as a capricious one.

The $865 million Moynihan Station plan—according to which the front part of the Farley Post Office on Eighth Avenue would be turned into a train hall and stairs would be sunk below to meet the same train tracks that run below Penn Station—died in October when State Assembly Speaker Sheldon Silver blocked it. The current talks are focused on much broader plans, first floated by Vornado and Related more than a year ago, in which Madison Square Garden would move to the west end of Farley; the Pennsylvania Station would be redone; and that superblock, between Seventh and Eighth avenues and 31st and 33rd streets, would turn into what the developers like to call a new Rockefeller Center—two to four state-of-the-art office towers containing about five million square feet of office space.

The inability to get Moynihan Station started before the end of his tenure was perhaps Mr. Gar­gano’s greatest defeat in his 12-year reign as ESDC chairman, all the more poignant because he was there when the state first took over the project in 1995 and shepherded it through several different ­iterations as market conditions and Amtrak’s financial troubles changed its scope and function. Suddenly, in the last year, the developers’ ambitious plans to move Madison Square Garden remade the project yet again into something bigger than Mr. Gargano could control.

In an interview with The Observer, Mr. Gargano said the developers subverted the approval process for Moynihan Station by drumming up support for Plan B among city officials and business and civic groups.

“I thought they got a little too cute. They went a little too far trying to lobby everyone,” said Mr. Gargano, who is now advising his former boss on a possible run for the Presidency. “They recognized, especially Steve Roth of Vornado, what it would do in terms of value if they were able to move the Garden and have the air rights, that it would give them one to two billion dollars in profits, and, therefore, it was a multimillion-dollar deal for them. That was their motivation.”

While Plan B first circulated publicly in spring 2006, its origins go back further, when, according to a source familiar with the original Vornado and Related bid, the developers mentioned the Garden swap and Penn Station overhaul as an alternative to their main proposal. That alternative went largely unnoticed inside and outside the ESDC for at least a year. The state publicized the winning bid as one that would have devoted the western end of Farley to vaguely defined big-box retail.

By March 2006, the Related Companies had engaged a Washington, D.C., lobbying firm, Dutko Worldwide, to discuss the project with federal agencies, including the Department of Transportation, which could fund at least a portion of the cost of the Penn Station overhaul. A real-estate industry source said, however, that the developers’ lobbying activities wouldn’t impact financing for the city’s other transportation projects, such as the Second Avenue Subway. The lobbyists, according to the source, are targeting agencies including the Federal Railroad Administration, which oversees funding for Amtrak and the nation’s railroads, rather than mass transit.

EVEN WHILE THE DRAMA OVER the Moynihan Station approval was unfolding last fall, the developers were explaining the larger Plan B to members of the Spitzer camp, according to sources.

Since then, the Penn Station project has become a regular feature of Mr. Foye’s presentations to a wide variety of supporters and public officials.

One of his earliest meetings took place in late November or early December with Peg Breen, president of the New York Landmarks Conservancy, and the ­chairman of the nonprofit organization’s public-policy committee, John J. Kerr Jr. The conservancy is one of two prominent groups that object to plans by the devel­opers to turn the elegant neoclassical foyer of the post office into a ticket-selling area for the Knicks and Rangers.

“[Mr.] Foye said that he was listening to everyone and it was too early to say one thing or another, but he was very gracious about meeting with us early,” Ms. Breen told The Observer. “We think that this can be a great opportunity. It’s clearly great for economic development—the developers are going to do well, the Garden will do well, the improvements to Penn Station are a good thing. But everything started with the notion of a great train station at Farley, and we wanted to make sure that that wasn’t lost; and we wanted to make sure that there really was a separate great train station, and that it wasn’t just a forecourt to the Garden.”

Kent Barwick, the president of the Municipal Art Society, another prominent group anxious about the Garden swap, said that Mr. Foye needs to be a vigorous negotiator on behalf of the public.

“The Empire State Development Corporation has extraordinary powers. What we saw in the last few years was the state using those powers to achieve what the private developers wanted to do, without appropriate consideration for the public good,” said Mr. Barwick, who is planning to meet with Mr. Foye in the coming week or two. “You need a person—it could be a nicer Bob Moses, or an Eliot Spitzer who can read plans—someone who has the ability to push back when it is required.”

Last month, Mr. Foye spent two hours talking about the project to the Friends of Moynihan Station, an advocacy group affiliated with the Regional Plan Association, a nonprofit planning group.

“He was very nuts-and-bolts. He laid out this and this and this—all the things that needed to get done to make this thing happen,” said Maura Moynihan, the daughter of the late Senator after whom the renovated Farley Post Office will be named. (She told The Observer the story about the post-Election Day meeting.) “He is this wonderful Irish gentleman from Long Island who must suffer the indignities of the pit on a daily basis coming in on the Long Island Rail Road. Everybody is stunned and amazed by the energy that the Spitzer team is bringing to this project.”

Mr. White, the executive director of Transportation Alternatives, a pedestrian and bike advocacy group, was loping down Mott Street in Soho in a cold January drizzle on a single-speed 1971 Schwinn, weaving in between cars trying to find their way onto the Williamsburg Bridge—a bakery van pulling suddenly over to the curb, a truck snorting forth.

The 36-year-old Mr. White was on his way to a community-board meeting in Park Slope to ask its support for Intro 199, a City Council bill that would require the city to track traffic patterns around New York and set goals for reducing auto use.

It is, he explained, a necessary step toward any sort of congestion pricing—the system, devised in London, whereby drivers would pay for the privilege of driving into the central business districts of New York City.

(The fee wouldn’t be collected at booths like tolls, but rather ­indirectly, through EZ-Pass trans­ponders or through monthly bills that would be sent to drivers who had tripped a camera taking photographs of license plates.)

Once the domain of traffic nerds, congestion pricing has taken hold here recently like never before. Both the Partnership for New York City, a prominent group of business executives, and the Manhattan Institute, the conservative think tank, endorsed or re-endorsed it in December, joining a list of longstanding proponents such as the Regional Plan Association.

Mr. White represents the left flank, then, of a set of strange bedfellows. Founded by radical bicyclists in the 1970’s, Transportation Alternatives comes across as a sort of alterna-elite group of forward-thinking urban planners.

About half of its 5,500 members are from Manhattan and brownstone Brooklyn, and its 18 full- and part-time employees are generally white, well-educated twentysomethings who ride their bikes to work. Many of its largest donors are Wall Street types, and its largest individual funder is Mark Gorton, the high-tech entrepreneur who founded LimeWire. To them, Mr. White says, “Biking is the new golf.”

But T.A., as it’s called, has long tried to project itself as a generally pro-person, anti-traffic group. The city Department of Transportation ended up copying Safe Routes to Schools, a program established by Mr. White’s predecessor, John Kaehny, which seeks improvements to streets near schools. A similar program, Safe Routes for Seniors, is next in line for adoption, Mr. White hopes.

And the group regularly submits suggestions for traffic improvements throughout the city, sponsors bike rides, and gives away helmets in poor neighborhoods.

The potential constituency for this tiny, million-dollar-a-year organization headquartered in a Chelsea loft is quite large. Everybody has a gripe about traffic, after all, and it’s only going to get worse.

“If you go up to the South Bronx, they really love T.A. there,” said Aaron Naparstek, a former T.A. employee who now edits Streetsblog, a Web site promoting the “livable streets” movement. “They used to think, ‘This is the way New York City is.’ And then this young kid from T.A., with maybe an Ivy League degree, comes in and says there’s a whole set of traffic-calming tools that you can use to change that.”

THERE TO BRIDGE THE WORLDS OF WALL STREET and the South Bronx, lefty advocacy and Republican-controlled City Hall, is Paul Steely White, a blond-haired, blue-eyed surfer dude who has a touch of the aristocrat about him. He uses his middle name a lot, because it was his grandfather’s and it makes it easier for people to Google him, he said; and, in casual conversation, he favors old-fashioned words like “alighting” and “thoroughfares.” Somehow, it works.

“He understands what our world is and brings a real constituency with him,” said Manhattan Borough President Scott Stringer. “When he came to us about closing Central Park to traffic, he had gathered thousands of signatures from people and politicians and laid out all of the arguments.”

Born in Utah to Mormon parents (they soon left the church and divorced), Mr. White was raised in New Orleans and in Rockford, Ill. He came to New York City in 1997 after graduate school in environmental science to direct overseas projects at the Institute for Transportation and Development Policy, an organization allied with Transportation Alternatives. When T.A. was looking to replace Mr. Kaehny, who left to become a consultant to nonprofits, Mr. White already was a known entity whose experience dealing with foreign governments proved his ability to present and persuade.

The idea of charging people to come into Manhattan had been around for a long time before Mr. White came onto the scene.

Mayor John Lindsay proposed tolls on the East River bridges in the 1970’s. In the 1990’s, the then president of the Partnership for New York City, Robert Kiley, mentioned it. Mayor Bloomberg floated the idea early in his term. In each case, the plan failed because it came across as a tax on the outer boroughs as opposed to a traffic solution.

Then, four years ago, London instituted its congestion-pricing system. Traffic has fallen by one-fifth, and the revenue gets pumped back into the mass-transit system.

London has demonstrated to business leaders who traveled there the quality-of-life benefits of traffic reduction, who in turn have tapped into New York’s fear of losing ground in the battle for global commerce. In December, the Partnership for New York City released a report stating that traffic congestion was costing New York City businesses and consumers $13 billion annually.

“The common ground is that traffic creates a whole series of problems for the city from the standpoint of business,” said Kathryn Wylde, Mr. Kiley’s successor at the partnership. “The cost and inefficiency created by the loss of mobility is a huge expense and means the loss of revenue. When people don’t have easy access to business locations, when employees are delayed in getting to appointments, when you have to leave work an hour early to get to the airport, those costs are all absorbed by business and are often passed on to consumers.”

Instituting congestion pricing in New York will be a lot harder than in London, where it took but 18 months. London has control over its mass-transit system, while here the Mayor would have to spend his political capital to get it passed, only to then see the revenue flow to the Metropolitan Transportation Authority, a state entity.

Any proposal would need support from the State Legislature and the City Council, where outer-borough politicians play a decisive role.

“Ultimately, the city of New York has to be a livable city for all New Yorkers,” said Walter McCaffrey, a former Queens City Council member who is the director of an organization called Keep New York City Congestion Tax Free, founded by the Queens Chamber of Commerce last year. “If you have a system in place where the rich would no longer have to contend with other vehicles blocking their vehicles, that would end traffic congestion. They’ve tried to make it seem like if you are not in favor of congestion pricing, then you have given up on the problem of congestion. But that’s not true.”

Mayor Bloomberg has been cool to the idea, but his aides have said that congestion pricing is still under consideration for the N.Y.C. 2030 report—a set of policy recommendations to make the city more environmentally sustainable, due out in March.

“It’s very clear that we have to begin to shift more cars, more people who are coming into this city for whatever reason, to mass transit,” said Deputy Mayor Daniel Doctoroff, Mr. Bloomberg’s right hand on development, speaking to The Observer on Jan. 30. “That requires both getting them off of the roads, to the extent that it’s possible, but it also requires significant investments in expanding the mass-transit system.”

THE COMMUNITY BOARD IN PARK SLOPE ended up refusing to endorse Intro 199, complaining that it was too much “nibbling.”

Afterward, Mr. White headed to a barbecue joint close by, which also happens to be near his home. Wearing burgundy clogs, jeans and a brown canvas jacket that somehow passed as a sport coat, Mr. White launched into his vision of congestion pricing.

The point would be to devise a system that would make the public see it differently than it saw East River tolls. So, for one thing, he says, it would not just be weekday traffic in Manhattan south of 60th Street that would be charged a fee, but cars in downtown Brooklyn and in Long Island City as well.

And the charge—somewhere around $6 or $8 daily—would somehow fluctuate, depending on how congested the city is on any one day.

“Any solution that is brought to bear on New York’s traffic problem, the pain has to be applied equitably and geographically. Otherwise, it is going to fall victim to the borough-versus-borough thing, where it will just be perceived as a craven tax ploy,” Mr. White said.

As he went on, it became clear that Mr. White didn’t think congestion pricing would become policy any time soon—maybe under Mayor Bloomberg, more likely under his successor. T.A. will use that time to build the case for congestion pricing, and to introduce a list of initiatives that will reduce traffic.

As his argument unfolded, Mr. White turned out to be not just a guy concerned with painting bike lanes on streets, but someone concerned with the very nature of civilization itself.

“If you look at how much public space there is in cities—you know, the space between buildings—how is that space programmed? What’s it used for? Is it used for the benefit of everyone living in the city, or is it used for a relative minority, their parking or driving?

“If you think about cities,” he continued, “like why did they exist in the first place, they existed because of transportation—concentrating the destinations, services, goods, ideas. That’s what makes New York so great—right?—is it’s density.

“But then you have the lowest-density mode of transportation taking up so much of this public space. So few cities have been minimizing automobile use, but now cities that are doing this are really gaining.

“There are tremendous returns. They are investing the political capital and the capital capital to reprogram the public space for people traveling by bus, bikes or walking.”

Mr. White warmed further to the topic.

“Part of what fires me up, and what fires other people up, is: There is dysfunction now, but there is really opportunity by reorganizing cities. We can not only make cities more livable, but we can dramatically reduce our dependence on oil, we can go a long way to curb global warming, and—guess what?—we may improve democracy, and ourselves, in the process.”

It is hard to imagine exactly what a simple car owner from Queens would say to that.

It was the first time, Mr. Caro said, that he had heard from anyone connected to the massive three-part exhibit opening next week, “Robert Moses and the Modern City,” which includes among its backers noted historian Kenneth T. Jackson.

And yet Mr. Caro had written the book on Moses, hadn’t he? Since its publication in 1974, The Power Broker: Robert Moses and the Fall of New York has sold 315,000 copies through its 30 printings (and counting), and can be found on the bookshelf of every self-professed New York–ophile the world over.

So deep is Mr. Caro’s influence—only one book has even attempted to approach the subject since then, and it is out of print—that anything written on the subject of Robert Moses, who died in 1981, must struggle to do anything else besides affirm, sidestep, build upon, fill in the holes left by, question or rebut the 700,000 or so words that Mr. Caro has already written. In other words, everything comes back to Mr. Caro’s Moses.

A Moses who, Mr. Caro wrote “built parks and playgrounds with a lavish hand, but they were parks and playgrounds for the rich and the comfortable.”

A Moses who “tore out the hearts of a score of neighborhoods, communities the size of small cities themselves, communities that had been lively, friendly places to live.”

A Moses who “practiced McCarthyism long before there was a McCarthy.”

Yes, Mr. Caro told Mr. Hertog, he would speak at the Museum of the City of New York’s part of the exhibit. But he’s since been wondering why he wasn’t invited earlier; why he wasn’t invited to submit a paper to a conference that Columbia will hold in March; why he wasn’t even told about the exhibit by one of its organizers, but instead by one of its sponsors, Mr. Hertog.

Mr. Hertog told The Observer that he suggested inviting Mr. Caro because he could no more imagine an examination of Robert Moses without his input than he could the City of New York itself without Robert Moses.

Last week, Vintage sent out paperback copies of The Power Broker—all 1,246 pages (and three pounds, nine and a half ounces) of it—to newspaper editors, inviting select interviews with its author.

Within a day, Mr. Caro interrupted himself in the middle of writing a scene about the Cuban missile crisis—he’s working on the fourth of four volumes on Lyndon B. Johnson—to tend to a more personal crisis.

“It’s always useful—and, in fact, inevitable—to re-evaluate a major historical figure,” Mr. Caro said in his spare West 57th Street office, dressed in a brown sweater with a burgundy tie peeping out at the bottom. “But I would be more hopeful about this exhibit being a disinterested historical re-evaluation if they had shown any interest in asking someone they had disagreed with to participate in a serious discussion.”

With the exhibit (which is to be staged at the Museum of the City of New York, the Queens Museum of Art, and Columbia University) still not open, and with the academic conference weeks away, Mr. Caro gleaned what he could about the whole undertaking—especially the sort of re-evaluation of Moses’ life (and therefore his book) that the exhibit would prompt—by studying its 336-page catalog.

In particular, there were four pages written by Mr. Jackson, another great narrator of the saga of New York, that had gotten Mr. Caro’s attention—four critical pages that made him wonder whether this exhibit was going to be an attack on The Power Broker.

MR. CARO'S EDITOR, ROBERT GOTTLIEB, who also read the four pages, told The Observer: “I got this impression that Mr. Jackson, even if he didn’t have a direct animus toward Caro, was suffering from some kind of Moses envy, as if he wanted to own Moses himself.”

Mr. Jackson’s essay calls The Power Broker “extraordinary in conception and execution,” but also asserts it “exaggerates Moses’s influence on American life and makes him too much of an evil genius.”

The Power Broker, he writes, “ignores Los Angeles’s construction of nine hundred miles of highways and twenty-one thousand miles of paved streets in the twentieth century, both totals substantially eclipsing those of New York.”

Far from contributing or causing “the Fall of New York”—as Mr. Caro’s subtitle, written the year before the city’s fiscal crisis, suggests—Mr. Jackson argues that Moses made the city’s renaissance since then possible. “Had he not lived … Gotham would have lacked the wherewithal to adjust to the demands of the modern world.”

If this face-off between two great chroniclers of New York is about two clashing egos, it is also about two perspectives on history.

In one corner stands Mr. Caro, an adherent of the “great man” theory of history, who in The Power Broker (“Surely the greatest book ever written about a city”—David Halberstam) delved into the psyche of an idealistic civic reformer who started his city career by assembling unused city-property parcels into parks; lavished millions of dollars on state-of-the-art public bathhouses; and then, once he had mastered the manipulation of power, turned his considerable influence to building highways that destroyed neighborhoods. Moses, according to Mr. Caro, not only abandoned his idealism, but was powerful enough to impose that lack of idealism on the city.

In the other corner stands Mr. Jackson, the editor of The Encyclopedia of New York City (“Excellent, and as the only reference work of its kind, invaluable”—Alfred Kazin) and the author of Crabgrass Frontiers: The Suburbanization of the United States, a standard entry on university urban-planning reading lists.

A popular professor who leads students on all-night bike tours of the city, Mr. Jackson—just a few years younger than Mr. Caro, who is 71—posits the more Hegelian notion that Robert Moses was just a product of the same zeitgeist that propelled cars to the top of the policy agenda everywhere in the United States. And yet, Mr. Jackson writes, “despite the many miles of roadway attributed to Moses, New York never became as hospitable to the motorcar as other American cities.”

“In Caro’s book, what you need to explain is what went wrong in New York,” Mr. Jackson told The Observer. “The fact is, New York is doing very well. Its public housing is all standing; it is not being blown up like in other cities. New York has far and away the best transit system than anywhere. The question is, again, consider the larger context: If Robert Moses was out to destroy the transit system, he didn’t do a very good job.”

Mr. Jackson, a transit advocate (his next book is called The Road to Hell: Transportation Policy and the Decline of the United States), adds that he wishes that Moses had been in charge of the subways instead of the highways; but, he says, the couple of proposed transit improvements that Moses refused to incorporate into his projects—like running light rail down the center of the Long Island Expressway—would hardly have made a difference over time.

“In the 1940’s, people were leaving New York City as soon as they had enough money,” Mr. Jackson elaborated. “The real question is, did Robert Moses cause the first exodus? No, because it happened almost everywhere in the United States.”

Mr. Caro responded that such a line of reasoning ignores the starting point at which New York began.

“What was New York like before Robert Moses?” Mr. Caro asked. “When he came to power, we had a rapid-transit system, a modern rapid-transit system on which the city relied, and plans to extend that system into new areas that were being developed. You had a commuter railroad that was in relatively good shape. For 40 years, he systematically starved the subway and the commuter railroads.”

Plus, Mr. Caro said, Moses diverted money that would have improved the city’s quality of life in other ways.

“In the era right following the war,” he said, “when there was a particularly large immigration of blacks from the rural South and of Puerto Ricans, there was a sense that the city had to reach out to these people, that it wasn’t the same as the Irish, the Jews, and the Italians, that these were not urban dwellers, that the city had to make an extra effort to reach out to these people and to devote to them a heavy share of the city’s revenue. Time and time again, as The Power Broker documents, Robert Moses intervened against that impulse, that humanitarian impulse, and got these funds instead for a share of his huge construction projects.”

Criticizing Mr. Caro must make students of New York history feel like Oedipus killing his father: The Power Broker is where they all learned about Moses in the first place.

“I wish it had my name on it rather than his,” Mr. Jackson said.

Hilary Ballon, a Columbia professor trained in the history of classical French architecture, said it was reading The Power Broker that led her to organize and to curate the exhibit. “It whet my appetite … It is such a dominant work that it controls the subject,” she said. “That is a tribute to Caro, but what it means is that every generation of writers that comes along must somehow contend with its enormous influence.”

The exhibit catalog, published by Norton, shows the apparent contradictions that scholars must face when trying to outdo, or even augment, a seven-year labor of obsession that is based on 522 interviews and countless documents dug out of the darkest corners of municipal life.

How do you declare that Moses was the single most important figure in shaping the New York region, and yet also a mere mortal who butted heads with other powerful figures? How do you exonerate him for engaging in destructive highway-building, saying it was just a product of federal funding, and then praise him for forcing other federal programs toward productive ends, like building Lincoln Center?

The catalog’s contributors strive to put Moses into a broader context and, at times, succeed.

One chapter, by Barnard College professor Owen D. Gutfreund, reproduces a 1928 map by the Regional Plan Association showing a large network of regional highways not unlike what Moses ended up building, persuasively arguing that his vision of highways was, if not inspired by the powerful R.P.A., at least shared with it. And other contributors examine stories that Mr. Caro left pretty much untouched, like the battle for Washington Square, or the role that Moses played in keeping African-Americans out of Stuyvesant Town.

In one case, a contributor went to great—but inconclusive—lengths to find one small detail where she could differ from Mr. Caro.

Investigating whether Moses was racist, City University of New York professor Marta Gutman inspected construction diagrams and determined that an East Harlem pool could have been heated if Moses had wanted. Mr. Caro wrote that Moses kept the pool cold under the outrageous assumption that African-Americans would not tolerate cold water. No one, including Ms. Gutman, may ever know whether Moses heated the East Harlem pool or not: Mr. Caro’s source, the then– City Corporation counsel, has since died.

In the end, Ms. Gutman almost bolsters Mr. Caro’s contention that Moses was racist: She cites a former Brownsville resident who said he saw parks-department employees—Moses was Parks Commissioner, among many other things—enforcing a whites-only policy at swimming pools.

Mr. Caro, then, remains impossible to get away from. The question of just how much deference scholars should treat a living interpreter of the subject they are revisiting is not clear, if only because there are few subjects that one person dominates the way that Mr. Caro dominates the life and works of Robert Moses.

“There was no intention on my part or by any of the sponsors to not include him,” Ms. Ballon said. “I have been very concerned that this project not be taken as a critique of what he did. The exhibit raises a different set of questions about Moses’ impact on the physical character of New York City. I’m really interested in what got built.”

Mr. Jackson, who co-edited the catalog with Ms. Ballon and is co-organizing the academic conference, said that he hadn’t thought that Mr. Caro would be interested in the conference, which won’t pay its participants and will probably have a smaller audience than the museum event. Ms. Ballon said that Mr. Caro was the first person to be invited to the public portion of the exhibit at the Museum of the City of New York.

“I understand his speaking fee is pretty large,” Mr. Jackson said.

As it turns out, Mr. Caro isn’t getting a fee to speak at the Museum of the City of New York on Feb. 11. He wouldn’t want to pass up a chance to give his side of the story.

It was doing less than 1 percent of the Port Authority’s business. Deputy Mayor Dan Doctoroff wanted to replace its orange cranes with cruise ships. And real-estate developers were gnawing at the edges, trying to convert onetime warehouses into market-rate condos with splendid views.

But fierce reactions from neighbors and politicians who want to hold tightly to the “working waterfront” of Red Hook’s storied past spurred the city’s Economic Development Corporation to temper this condos-and-cruise-ship formula.

So the E.D.C. has proposed a little bit of everything in the 150-acre waterfront that’s now going through a rezoning. The map that E.D.C. put forth in September of piers 7 through 12 shows a beer garden, restaurants, warehouses, a hotel with a conference center, offices, light industrial buildings, a marina, a boatyard, a hotel, art galleries and artist studios, retail shops, offices and something called a “Dynamic Maritime Marketplace.”

Oh, and two piers for break-bulk cargo, container ships and a second cruise-ship terminal. (The first cruise-ship terminal opened last April.)

“The city’s plans would effectively preserve the industrial nature of the piers and combine it with recreational and commercial uses as well,” said Craig Hammerman, the district manager of Brooklyn’s Community Board 6. “I think that it has been quite a challenge to fit all the pieces together.”

At first, it looked so simple.

In 2003, the city began planning for the super-huge post-Panamax ships (pop. 4,000) that would need larger berths than those available at the 1970’s-era Passenger Ship Terminal on Manhattan’s West Side. Before it could announce any plans, Royal Caribbean International decided to start berthing two of its ships in Bayonne, N.J., because the West Side was getting too crowded.

Hell, if a cruise line was willing to move to New Jersey, convincing one to move to Marlon Brando’s old turf would be a cinch, wouldn’t it? (In fact, around the same time, Carnival approached the city with an offer to build a terminal in Red Hook.)

The E.D.C. commissioned a consulting firm, Bermello, Ajamil & Partners, which predicted 1.5 million passengers sailing into and out of New York each year within a decade—triple the number in 1998. The report, which The Observer obtained through a Freedom of Information Act request, called for three super-sized berths in Red Hook. The piers are owned by the Port Authority and run by a cargo operator, American Stevedoring, that has been doing a respectable business since taking over 13 years ago (even if most of the cargo must be shipped via barge to Newark, where it can be put onto trains).

The only problem with cruise ships is that they don’t employ a lot of people on land. What’s more, those jobs tend to be weekend jobs. In fact, according to the Bermello report, the main reason why the city needed to build two or three extra cruise-ship berths in Red Hook, in addition to modernizing the ones on the West Side, was because “all of the sought after weekend slots will be committed from 2005 forward.”

Carnival said that it would bring the equivalent of 863 full-time jobs, according to a 2004 report by another consultant, HR&A. The city’s later estimate of 600 was more modest, although even then it was counting spin-off jobs. Then E.D.C. cut the job number down to 290, but most of those were just porters and others who showed up the 40-odd days a ship called in port. Finally, the E.D.C. coughed up this number: Just eight to 10 people work full-time at the current cruise-ship terminal.

“That’s the nature of maritime jobs,” said Janel Patterson, an E.D.C. spokeswoman. “They work on berthing days. These include unionized stevedoring jobs as well as ticketing agents and other support staff.”

But eight to 10 full-time jobs, or even 53 to 55 full-time-equivalent jobs, on 15 acres of land doesn’t look good when one is trying to milk a precious resource like New York real estate.

Even the E.D.C.’s rezoning proposal, relying on Port Authority numbers, counts 330 jobs at the Red Hook cargo and warehousing operation on an average day, which comes to about 5.5 jobs per acre. (The cargo operator, American Stevedoring, says it employs 765 people, including drivers, which puts the yield at 12.75 per acre.) The current cruise-ship terminal yields about 3.7 jobs per acre.

The way the E.D.C. gets its job numbers up has very little to do with cruise terminals, like hosting a beer-distribution company that would move 400 jobs from Queens and hire another 100. Together with the part-time cruise-ship jobs, E.D.C. can boast of creating or retaining 1,300 jobs in its plans for piers 7 through 12, though it’s unclear how many are full-time.

What’s more, these are “water-dependent uses” that nostalgists and pragmatists alike agree will conform to the essence of Red Hook.

But when it comes right down to it, the future of cargo at Red Hook—specifically containers, those 20-to-40-foot-long train cars that are raised and lowered from ships via 100-foot-tall cranes—is the crux of this debate. And industry leaders, community members and elected officials—particularly Congressman Jerrold Nadler and City Councilman David Yassky—have all come to this shaky future’s defense.

“My view is, the container port is an important source for good-paying, blue-collar jobs,” Mr. Yassky told The Observer. “My sense is that shipping in Brooklyn could be providing many, many more jobs than what it is today. The policy for the Port Authority, and unfortunately the city, is more directed at getting rid of the container port than expanding it.”

When it comes to the E.D.C.’s plan to push the cargo and warehousing operation, now occupying five piers, onto two, Mr. Yassky said: “I don’t think anybody thinks that seriously would work. That’s just a way of saying that they are maintaining cargo operations without really doing so.”

Matt Yates, a spokesman for A.S.I., the private port operator, said that the E.D.C. plan would convert the company’s best container berth, Pier 10, into the new cruise-ship terminal. The one pier left for break-bulk and container operations would be too small for many vessels, he added.

All this is not to say that the cargo operator enjoys universal support on the ground. Red Hook is sparsely populated and poorly linked by public transportation, and some residents see more retail and housing as the key to making the neighborhood livelier.

“I think the container ships could in fact operate more efficiently with a smaller site,” said John McGettrick, co-chairman of the Red Hook Civic Association. “The cruise ships have not employed as many residents as we would have liked, but they have employed more Red Hook residents than A.S.I. has. Also, the cruise ships are complementary for a commercial and residential revitalization of the area.”

But the miniaturized cargo operation would not remain for long. The E.D.C. says it wants a third cruise-ship terminal at Red Hook, but hasn’t specified which use outlined in the new plan it would displace. On the other hand, even the port’s supporters say that cargo cannot remain in Red Hook forever, but will have to move a couple of miles further south.

“From any long-term perspective, the major port should be in Sunset Park,” Mr. Nadler told The Observer. “But you should not shut one and not bother to open another one.”

And so the E.D.C. has begun talking up a plan to modernize the South Brooklyn Marine Terminal, a series of underused piers between 25th and 65th streets, expanding the rail system to permit sea-to-land connections. A chart produced by the E.D.C. and distributed to local officials shows this plan costing $100 million, on top of the $330 million that the city would have to invest to make its plans for the Red Hook piers work.

The Sunset Park plan wouldn’t entirely replace the space lost in Red Hook, however, but it does call for two cranes (instead of Red Hook’s six) that would permit the 39th Street pier to dock 200 vessels annually, according to the chart. And a cement company has begun unloading barges on another pier, with another contract for a similar operation in the works, according to the E.D.C.

Mr. Yassky considers the Sunset Park plan “not for real shipping” and asserts that it came only in the face of fierce opposition to the Red Hook plan. (The E.D.C. spokeswoman said the plan had long been in the works.)

At this point, both he and Mr. Nadler have set their hopes for Red Hook on the Port Authority. So far, of course, the Port Authority has played along with the city’s cruise-ship plans, in the name of greater economic development for everyone. (It also pays money to maintain the piers.)

But Mr. Nadler sees a fresh opening: Governor Eliot Spitzer has control over half of the Port Authority’s board and the executive director.

“We talked to [Spitzer’s] transportation people before they took office, and they said they wanted to review everything,” Mr. Nadler said. “One thing they said for sure is that we will have a freight policy. Red Hook is just a small part of that, but that’s what we need—some sort of freight policy, whether it be in Red Hook or in Sunset Park. They cannot just look at piers 7 through 12. I understand that.”

The lease for the cargo company, American Stevedoring, comes up at the end of March. The city expects to take over all the piers at that point. But, through the E.D.C., it has been negotiating with the Port Authority for more than a year, without reaching—as of yet—an agreement on the takeover.

They dropped the price once and then finally, this week, closed on it—for “a little over” $1.3 million—and moved out of earshot of Atlantic Yards.

“I waited as long as possible,” said the scruffy, leather-jacketed Mr. Septimus, 34, a filmmaker. (He recently finished a documentary, BIKE, about hard-core bicyclists.) “I didn’t want to leave. I was very happy there, but at the same time, I’m a realist. I have a lot of sympathy for the people trying to fight it, but I saw it was a great game, and there wasn’t anything to do except vote with your feet.”

Mr. Septimus lived in Newswalk, a 10-story former Daily News printing plant that’s been converted into condominiums over the past eight years. It will essentially be surrounded on three sides by the 190- to 511-foot-tall towers of Atlantic Yards, the eight-million-square-foot project planned for Atlantic and Flatbush avenues. While the other warehouses and apartment buildings—including two that had also been converted into condos—will be demolished, developer Bruce Ratner spared Newswalk and some adjacent rowhouses, in a prudent move that lowers his cost of having to buy out the residents.

“Ratner is literally going to build right outside what was my window,” Mr. Septimus said. “He is basically going to block the light of all of our sunsets. We didn’t want to live with that. We didn’t want to live with that construction.”

A Newswalk board member counts nine residents of the building who have moved in the past year because of Atlantic Yards, including Mr. Septimus. They and other property owners nearby haven’t exactly lost money; the robust, if sputtering, real-estate sales market has made sure of that. (Mr. Septimus more than doubled the $500,000 he paid.) Some people even believe that the project will be good for the neighborhood in the long run.

But sellers and brokers are warning that the prospect of 10-plus years of construction will complicate future sales, if it isn’t doing so already.

Jan Lattey, a neighbor, put a brownstone that she bought 24 years ago around the corner from Newswalk on the market in January 2006. It just sold in December; she blames the fact that it took so long—and that it didn’t fetch the $1.5 million asking price—on the imminent project.

“A lot of people were very, very hesitant because of what is going to happen across the street,” said Ms. Lattey, who is retiring and moving to a condo in nearby Park Slope. “They didn’t want to live with construction for 14 years.”

With December’s approval by the state Public Authorities Control Board neatly in hand, Mr. Ratner’s company, Forest City Ratner, can begin demolishing the buildings that it owns as soon as it receives permits. To go further and seize another 22 properties through eminent domain to complete the planned footprint, Mr. Ratner must contend with a federal lawsuit filed by landowners and tenants.

Once—or if—he prevails, Forest City would start with the environmental remediation of the eastern part of the 22-acre site, closest to Flatbush Avenue, where the Nets basketball arena will go, and prepare to move the Long Island Rail Road train yard further east.

Then, as the arena, the train yard and five other commercial and residential buildings get underway late next year, as many as 470 trucks will make deliveries each day during the peak period, in winter 2009, according to the final environmental-impact statement issued in November. An average of once or twice a week, workers would be on the job until 11 p.m. For 10 months, one of the lanes of Atlantic Avenue would shut down. Side streets would close for longer periods, some of them forever. The levels of fine particulate matter—soot and dust—would exceed the threshold level that the Environmental Protection Agency considers dangerous to human health along two different stretches around the construction site (including down the street from Newswalk) for year-long periods.

And the equipment would be noisy enough that, even with various technological (electric, not diesel) and geographic (move them farther away) mitigations, Forest City is planning on buying and installing air conditioners or double-pane windows for nearby residents in sensitive spots—a move that even ur-booster Marty Markowitz, the Brooklyn borough president, told the state economic-development agency “is not a solution for these problems, only a way to mask them while residents are inside their homes.”

It’s a wonder, given all of that particulate matter—and the draft and final environmental-impact statements and analyses and appendices—that anybody is buying anything at all anywhere near Atlantic Avenue. And yet they are.

Nalani Clark, the co-principal broker and co-owner of the brokerage Brooklyn Properties, said her agency just set the neighborhood’s record for a brownstone sale about two and a half blocks away. William Ross, the executive director of sales for Halstead Brooklyn, said that his brokerage just sold four large apartments on Pacific Street for about $800 a square foot right across the street from a couple of commercial buildings that Mr. Ratner has planned.

“Those are family-sized units,” Mr. Ross told The Observer. “Those are buyers who are going to be there for a long while. By the time they are sold again, the arena will be finished and the neighborhood will have improved.

“If someone wants to buy there and sell in a year or two years,” he added, “they might be in trouble for all of the construction; but if you are planning on staying for five or six years, by the time you are ready to move, the construction will be complete.”

Meanwhile, on the north (read: shady) side of Atlantic Yards, the Dermot Company is finishing up its conversion of the Williamsburgh Savings Bank Building, the once and (given a last-minute concession by Forest City) future tallest building in Brooklyn, at 512 feet. The Dermot Company has put about 35 percent of its 189 condominiums under contract since opening its sales office last July—right when the draft environmental-impact statement came out with images of a row of steel-and-glass buildings that would rise just 600 feet away from the former bank’s 78-year-old terrazzo lobby.

“More than anything, that’s what people are coming in and looking at: what sort of views they will have,” Dermot principal Andrew MacArthur said. “One of the things we wanted when we bought the building was to have great views in every direction. We knew about the project then, and one of the things we considered was what sort of impact [Atlantic Yards] would have, and we decided it would have a very limited one.”

Mr. MacArthur said that Atlantic Yards would be fully visible from just one out of four lines of apartments, and that those units had been selling just as quickly as any others—although, on second thought, maybe that wasn’t quickly enough.

“The way the building was laid out, we had tight, efficient units on that end, so it is fair to say that people are hesitating when it comes to that line,” he said. “Those are tight, efficient two-bedroom units which we thought we would have sold more of.”

Forest City Ratner wouldn’t comment for this story, but the final environmental-impact statement acknowledges: “Construction traffic and noise would change the quiet character of Dean Street and Pacific Street in the immediate vicinity of the project site.” As for longer-range impacts, the analysis, conducted by a private firm on behalf of the Empire State Development Corporation, the state agency that has both promoted and overseen the project’s creation, concluded that the project—some 6,430 rental and condo apartments, the basketball arena and 336,000 square feet of office space—would “not substantially affect residential property values in areas with at-risk population for several reasons.”

Opponents have long argued the opposite: that Atlantic Yards will bring an influx of affluence into the mixed-income neighborhood because of its 3,980 market-rate apartments and another 900 or so aimed at households earning more than the region’s median income.

What is more, the opponents in the eminent-domain lawsuit are using the strong sales at Newswalk and other nearby places as arguments against why a massive, planned, subsidized urban-renewal project is necessary to eliminate blight when, next-door, buyers are shelling out $800 or even $1,000 a square foot.

In its legal response, filed in mid-December, the ESDC argued that the open rail yard, owned by the Metropolitan Transportation Authority, has blighted the adjacent three blocks (minus the part where Newswalk stands, apparently) to such a hopeless extent that eminent domain is justified, because “all prior plans to remediate the blight caused by this gaping hole in the Brooklyn landscape have fallen through.”

Brokers tend to agree that decking over the train yards will do only good for the neighborhood—but beyond that, they are reluctant to take a position, because their clients are as divided about the project as the rest of the public. After all, Mr. Ratner isn’t merely bringing lots of people and lots of traffic—and, his supporters say, lots of jobs—to central Brooklyn. He is bringing a little Madison Square Garden, complete with 150-foot animated signs, to a neighborhood that is warming up to boutiques that sell $4 handmade greeting cards.

“It is one of those things that is so hard to predict in the long term, frankly,” said Mr. MacArthur, the developer of One Hanson Place, the former Williamsburgh Bank tower. “I would like to stay out of saying whether things are going in a positive or a negative [direction]. It’s such a highly charged issue that we have nothing to gain from having an opinion.”

Meanwhile, Halstead’s Mr. Ross has an idea for how to get potential buyers into the spirit, especially when that jackhammer goes off across the street right during your open house: throw in a pair of season tickets to the Nets.

Or you could just buy them some earplugs.

They’re also trying to figure out how much public subsidy they can get away with asking for.

The state officials guiding the $1.7 billion Javits Center expansion, of which the new hotel is just a part, say that it’s too early to comment on the extent—or even the possibility—of subsidies, because bids aren’t due until Jan. 12.

But their own request for proposals, issued in October, spells out seven possible subsidies that developers may wish to take advantage of and hints at an eighth: about $33 million worth of free air rights that could bring the hotel, slotted for a lot at 35th Street and 11th Avenue, up to 1.25 million square feet.

“Officials are saying that subsidies will be available,” said one individual close to the bidding. “They are saying that the least subsidy wins.”

Developers are saying that those subsidies will be much deserved.

On the one hand, the winner of the hotel contract will be virtually assured of guests without having to advertise for them and even has the option of putting luxury condominiums with stunning Hudson River views on top.

On the other hand, the developer must, according to the state’s specifications, reserve three-quarters of the rooms for conventioneers at “competitive” rates; incorporate large ballrooms; and build on a parcel spliced by an Amtrak rail line.

The developer must also build one of the first skyscrapers on Manhattan’s far West Side, in an evolving neighborhood that, for the first two or three years at least, won’t even have a subway line anywhere close.

“Convention-center hotels typically have huge volumes of people checking in and out at the same time,” said Eric Lewis, a managing director and the leader of the hospitality and gaming group at Cushman & Wakefield, the real-estate services firm. “You need very large common areas, very large meeting spaces, very large eating facilities. That raises the per-room cost. At the same time, the convention and meeting planners are looking for cities that can be competitive on a total cost basis, and therefore the convention-center hotel needs to keep the cost rate down. The interplay of those two pressures makes the economics very difficult to achieve.”

In the pecking order of desperation, in other words, the convention planners call the shots, the hotel developer takes the orders, and the government—hoping for hundreds or even thousands of promised jobs—picks up the check.

John Lam, who is one of some eight developers who have expressed interest in bidding on the hotel contract, nevertheless called the location “perfect” because of its future potential. He plans to propose building 1,500 hotel rooms, about 50,000 square feet of office space, and several floors of “hotel-condos” for owners to live in or rent out. The hotel would consist of four different towers, arranged to avoid putting weight on the Amtrak line, and would reach 66 stories high. Mr. Lam wouldn’t specify what sort of subsidies he is seeking, however, saying that he is still working on his financial plan.

“That area doesn’t have any five-star hotels, and I see the opportunity is increasing,” said Mr. Lam, who is the owner and founder of the Lam’s Group, which built a Best Western just a block away from Javits and is completing another 3,000 rooms around the city in the next three years. “Right now, people who go to the Javits Center have to travel quite a bit, because there are no hotels around there.”

His plan, drawn up by architect Gene Kaufman, contrasts with a schematic design that the Javits expansion architects drew up for illustrative purposes. That design shows just one tower, set back from 11th Avenue, on top of a seven-story pedestal that includes two ballrooms, an underground connection to the Javits Center and shops.

The hotel has been touted as a crucial adjunct to the 520,000-square-foot Javits expansion that will help restore New York to the top tier of convention destinations, and yet its finances have always been a bit of a mystery. The hotel is typically described in press releases as “largely privately financed,” but the public contribution, or benefit, is never detailed.

Originally, the state was going to purchase a vacant site at 42nd Street and 11th Avenue, a little to the north of Javits, and lease it to a private developer. The developer would then likely team up with a hotel chain to operate the facility.

To avoid the expense of acquiring property, planners moved the hotel location south to 35th Street, to a plot of land across the street from Javits. The state already owned most of that site, which is known as Stonehenge Park: a plaza littered with odd concrete sculptures that nobody can make much sense of.

Back in November, 46 people showed up at a mandatory site tour for hotel bidders. While many were engineers or from hotel chains that were part of larger teams, the attendance sheet made public includes nine identifiable development companies. A spokeswoman for one of them, Portman Holdings, said last week that the company was no longer interested, but The Observer was able to confirm that three others—Mr. Lam, Gary Barnett of Extell Development, and FaulknerUSA, a Texas-based hotel developer—were still intending to submit bids.

Other developers on the list who would not comment or return messages include Vornado Realty Trust, Rudin Management Company, the Moinian Group, Colgate Development and BD Hotels. The Witkoff Group, which had expressed interest back in 2005, did not send a representative.

“From what we understand, there is going to be a lot of interest, and that’s all to the good,” said Michael Petralia, the president of the Convention Center Development Corporation, the state agency supervising the Javits expansion. “I am not going to speculate on what we may or may not do. Our job is to get the hotel built with the least amount of financial exposure to the state and the city.”

Faulkner is a 45-year-old company that has built four convention-center hotels and is building a fifth, in San Antonio, Tex. For its New York bid, the company is teaming up with Hilton Hotels, according to Tim Garbutt, Faulkner’s director of business development and corporate communications.

“New York is attractive for a lot of reasons, and we are a convention-center hotel developer, so of course we would want to be there,” Mr. Garbutt said. He said it would not be surprising if the company included luxury condominiums as part of its Javits bid, but he wouldn’t detail the proposal’s financial aspects.

“It’s kind of a double-edged sword,” he told The Observer. “If you are in this business, you want to be at the show, and New York is it. At the same time, it takes quite a considerable wherewithal and financial resources to pull it all together.”

The request for proposals specifies that the state development corporation wants to “minimize the level of public financial participation in the Javits Hotel,” but that it will consider helping developers, “subject to demonstrated evidence that financial assistance is needed.”

Among the subsidies mentioned are below-market rent; reduced property, mortgage-recording and sales-tax payments; electricity-rate discounts; and “an additional capital contribution.” In addition, the request for proposals asks bidders to submit financial projects that assume that they could obtain 312,000 square feet of zoning rights, or about 22 stories of the hotel tower, for free.

It is unclear whether the state is willing to give away those rights, which belong to the Metropolitan Transportation Authority and would be transferred from the Eastern Rail Yards between 10th and 11th avenues, two blocks to the south.

The convention-center agency said in a statement: “Those assumptions may not dictate the financial terms of the hotel development agreement,” and added that bidders were asked not to include the cost of the Eastern Rail Yards’ rights because that exact price is not known.

But one could make an educated guess as to the air rights’ cost. The M.T.A. this past fall commissioned an appraisal that determined that the Eastern Rail Yards’ rights were worth $106.71 a square foot. And the city is selling extra development rights in Hudson Yards for $106.48 a square foot.

When asked to elaborate why hotel bidders didn’t need to account for the M.T.A. rights in their proposals, Mr. Petralia said that he didn’t want to negotiate in public.

“What we want to do is to see what the market is right now, to see what we get back in terms of what the developers can offer, and then take it from there,” he told The Observer.

Governor Eliot Spitzer, who has insisted that the M.T.A. get “full value” for its assets, will likely play a role in determining the cost of the air rights as well as the extent of any other subsidies, as will Mayor Michael Bloomberg, who has been negotiating to control the sale of some of the M.T.A.’s air rights.

Other cities typically—though not always—provide subsidies for convention-center hotels. Sometimes they even build and own them outright, taking on the risk of insufficient bookings in exchange for getting hold of all the revenues. In San Antonio and Denver, convention-center hotel developers are taking advantage of tax-exempt bonds that can save them 3 or 4 percentage points’ worth of interest every year. Washington, D.C., just agreed to provide $150 million in tax-increment financing—meaning that the property taxes pay off part of the cost of building the hotel instead of going to the city’s general fund.

But in Philadelphia, which is embarking on a 376,000-square-foot expansion of its convention center, hotels are springing up nearby without any public help whatsoever.

Unless your name is George Steinbrenner, Hank Paulson or Hank McKinnell.

On his first day as Mayor-elect, Mr. Bloomberg renounced the property- and sales-tax breaks that his own media company received for its 59th Street headquarters. “Any company that makes a decision as to where they are going to be based on the tax rate,” he said, “is a company that won’t be around very long.”

The message, according to city officials and lobbyists, has caught on: Many businesses are now afraid to ask for tax breaks. But you can still get one from Mr. Bloomberg. You might have to call it an “infrastructure improvement” or an “investment,” and you might have to promise to increase the number of people you employ.

Mr. Bloomberg’s aides consider the cases where they did give discretionary tax breaks to be minor exceptions, compelled by draconian necessity or deserving of special attention. But other observers suggest that the onetime stoic Mayor has buckled under pressure—or, to put it generously, has come to see flexibility as the price of leadership.

And now that large businesses have finally slept off the incentive deals hatched during the Giuliani and Dinkins eras, they are out and about, prowling around for new leases. The Mayor’s vision of the city as a premium brand worth its price will be put to the test, as will his promise to hold the line on corporate handouts.

“We are not in the business of paying corporations to stay in New York City,” Deputy Mayor Dan Doctoroff told The Observer. “We have said that, and we have been pretty consistent—the only exception being lower Manhattan. We will provide incentives for companies to grow in the city, for the building of a new building or for taking up additional space in certain circumstances.”

But it’s not just lower Manhattan: Mr. Bloomberg has sunk money into the Bronx, Brooklyn and even midtown for stadiums, retail malls and office buildings that may promise—but do not guarantee—job growth. All told, according to an analysis by Good Jobs New York, a nonprofit that monitors economic-development policies, the Mayor has awarded more than $900 million in tax breaks, infrastructure commitments and other discretionary subsidies for commercial projects in his five years in office. That is on top of about $400 million a year that the city pays out for an as-of-right commercial and industrial incentive program.

Goldman Sachs is the Bloomberg-era incentives deal that sticks out the most. Two years after the Sept. 11 attacks, Goldman Sachs decided to build a $2 billion headquarters in Battery Park City. Then, in early 2005, Governor George Pataki resisted scrapping a tunnel planned for West Street that the investment bank said would pose a safety hazard.

Then–chief executive Hank Paulson put the project on ice; downtown business leaders freaked out; and the state and the city put out, offering about $60 million more in incentives, and $650 million more in triple tax-free Liberty Bonds (which Goldman Sachs then was able to issue itself) than were part of the pre-tunnel deal.

“I think it’s fair to say that there were a lot of complex political dynamics in that decision-making process,” Mr. Doctoroff told The Observer. “We played a critical role in reducing the amount of incentives or subsidies that were originally offered. They were substantially less than they otherwise would have been. The fact was, Goldman was building a new $2 billion headquarters. If you look at it from the city’s perspective, we will be paid back many, many times that in terms of the revenues that this investment will generate.”

City and state leaders had already thought of the immense necessity of rebuilding lower Manhattan: They persuaded Congress to appropriate $956 million in business-recovery and job-retention grants and another $8 billion to stimulate new construction. That, apparently, wasn’t enough: The city also started handing out sales-tax exemptions and property-tax breaks to companies that said they would not only stay in New York but would expand, including Aon Service Corporation and Brown Brothers Harriman & Co.

That wasn’t enough, either. Earlier this year, upon Mr. Doctoroff’s insistence, the Port Authority of New York and New Jersey agreed to “invest” $250 million into the World Trade Center site (which only five years earlier it had tried to privatize) and take ownership of—and the risk of leasing—the Freedom Tower.

These are extraordinary measures for extraordinary times—but then, that was how past Mayors thought of it when they institutionalized the practice of handing out tax breaks to companies to keep them here.

Michael Bailkin, a consultant who represents businesses in negotiations over tax incentives, argues that Mr. Bloomberg is not necessarily any more or less profligate than his immediate predecessor.

“He has made a reasoned judgment as a businessman about how attractive a city it is. The times have proven his judgment to be a very reasoned judgment,” Mr. Bailkin told The Observer. “When Giuliani was Mayor, the city was not as strong an attractor to businesses as it is today. The real difference is that New York is a growing market.”

Mr. Bloomberg’s critics praise the Mayor for what they consider the smart investments that have improved education and public safety. But, over time, they suspect that the once-stalwart businessman has slowly loosened his principles.

“It seems that the power of the real-estate industry was more than what the administration anticipated,” said Bettina Damiani, the project director of Good Jobs New York. “Ideally, the Mayor says, ‘Look, I’m a successful business guy; we are going to make the investments we need to make the city attractive in terms of police and affordable housing and education.’ To the extent that the real-estate industry is the big dog in the room, I imagine it was awfully difficult to hold the line.”

One of the rules that Mr. Bloomberg has set up for himself is not to award tax breaks unless the company promises to create jobs or to put money into a building, or both. His critics wonder why, if the Mayor is unwilling to give handouts to keep jobs in the city, he is willing to do so for new ones? Business leaders agree that factors like the quality of the workforce generally matter more for companies scouting locations, and that New York is indeed becoming the type of headquarters city that it should be. But they say that the city, while attractive, isn’t always attractive enough.

“Property-tax breaks are on the margins as a single factor,” said Kathy Wylde, the chief executive and president of the Partnership for New York City. But, she added, “We have no place where somebody can put a trading floor. It has to be built new. That means construction costs that are significantly higher and that will require rents in excess of $80 a square foot. If you can get the same trading floor for $40 a square foot elsewhere and you are a public company, you have to defend that decision.”

A city economic-development official said that capital subsidies—or, rather, investments—serve another purpose. “It provides the type of upfront capital funding that is needed in the early stages of the project, when it might be hard to get that money from other sources,” the official said.

Thus, the city is pitching in $100 million for Atlantic Yards, even though that project is so gargantuan—$4.2 billion—that it’s hard to believe it will make a difference. Opponents of the project argue that the public could end up paying much more, through indirect subsidies and also because the memorandum of understanding calls on the city and state to “consider making additional contributions for extraordinary infrastructure costs.”

Another example of helping out a private enterprise that had no intention of leaving is the new Yankee Stadium, a project for which the city is donating about 25 acres of parkland and spending another $150 million in today’s dollars to recreate that open space elsewhere after the new stadium is finished. The Mayor’s aides argue that the upkeep on the current stadium—which, according to the current lease, the city is responsible for—would have become increasingly expensive. That lease will run out in a few years, but Mr. Doctoroff said that the city wouldn’t have gained much ground through negotiating a new one. “It would have taken the two sides to change the terms and, in terms of our calculations, we would not have been successful.”

Mr. Doctoroff argues that the new stadium, though smaller, is supposed to bring more jobs for the Bronx, though the parks rearrangement is not predicated on that happening.

The Yankees deal had the advantage of appearing not to be a subsidy, allowing the Mayor to claim another victory just days after losing the West Side Stadium, which would have counted as Mr. Bloomberg’s largest subsidy deal ever at $300 million. Still, that number doesn’t come close to the $650.5 million that the city expects to forgo in property taxes over 30 years in order to stimulate construction in the area around the former stadium site, Hudson Yards. City officials say the massive up-zoning of 45 blocks just west of midtown will, by adding 24 million square feet of office space, control, if not depress, Manhattan’s office rents. But because the city says the rents there will be lower than in core midtown, a city board this fall approved property-tax discounts of up to 40 percent to encourage developers to build there.

The logic has puzzled liberal policy wonks, who argue that the tax discounts will only increase the price of land by making it more attractive.

“The city rezoned the land—that adds value. You build the No. 7 [subway] line—that adds value,” said James Parrott, the deputy director of the Fiscal Policy Institute. “Now they say it is so costly to build on the West Side? Why not let the market adjust a little bit?”

Even Senator Charles Schumer, whose Group of 35 report five years ago presaged the Hudson Yards rezoning, said that tax incentives were unnecessary, stressing that the city’s investment in extending the No.7 subway to 11th Avenue would provide an adequate incentive for builders.

That argument has failed to convince the Mayor, however.

“This tax structure is in place to induce people to move into an area that is not developed currently, and which requires a leap of imagination in order to relocate their businesses there,” Mr. Doctoroff said. “We obviously have a tax policy in place that we think is necessary. That speaks for itself.”

Unless your name is George Steinbrenner, Hank Paulson or Hank McKinnell.

On his first day as Mayor-elect, Mr. Bloomberg renounced the property- and sales-tax breaks that his own media company received for its 59th Street headquarters. “Any company that makes a decision as to where they are going to be based on the tax rate,” he said, “is a company that won’t be around very long.”

The message, according to city officials and lobbyists, has caught on: Many businesses are now afraid to ask for tax breaks. But you can still get one from Mr. Bloomberg. You might have to call it an “infrastructure improvement” or an “investment,” and you might have to promise to increase the number of people you employ.

Mr. Bloomberg’s aides consider the cases where they did give discretionary tax breaks to be minor exceptions, compelled by draconian necessity or deserving of special attention. But other observers suggest that the onetime stoic Mayor has buckled under pressure—or, to put it generously, has come to see flexibility as the price of leadership.

And now that large businesses have finally slept off the incentive deals hatched during the Giuliani and Dinkins eras, they are out and about, prowling around for new leases. The Mayor’s vision of the city as a premium brand worth its price will be put to the test, as will his promise to hold the line on corporate handouts.

“We are not in the business of paying corporations to stay in New York City,” Deputy Mayor Dan Doctoroff told The Observer. “We have said that, and we have been pretty consistent—the only exception being lower Manhattan. We will provide incentives for companies to grow in the city, for the building of a new building or for taking up additional space in certain circumstances.”

But it’s not just lower Manhattan: Mr. Bloomberg has sunk money into the Bronx, Brooklyn and even midtown for stadiums, retail malls and office buildings that may promise—but do not guarantee—job growth. All told, according to an analysis by Good Jobs New York, a nonprofit that monitors economic-development policies, the Mayor has awarded more than $900 million in tax breaks, infrastructure commitments and other discretionary subsidies for commercial projects in his five years in office. That is on top of about $400 million a year that the city pays out for an as-of-right commercial and industrial incentive program.

Goldman Sachs is the Bloomberg-era incentives deal that sticks out the most. Two years after the Sept. 11 attacks, Goldman Sachs decided to build a $2 billion headquarters in Battery Park City. Then, in early 2005, Governor George Pataki resisted scrapping a tunnel planned for West Street that the investment bank said would pose a safety hazard.

Then–chief executive Hank Paulson put the project on ice; downtown business leaders freaked out; and the state and the city put out, offering about $60 million more in incentives, and $650 million more in triple tax-free Liberty Bonds (which Goldman Sachs then was able to issue itself) than were part of the pre-tunnel deal.

“I think it’s fair to say that there were a lot of complex political dynamics in that decision-making process,” Mr. Doctoroff told The Observer. “We played a critical role in reducing the amount of incentives or subsidies that were originally offered. They were substantially less than they otherwise would have been. The fact was, Goldman was building a new $2 billion headquarters. If you look at it from the city’s perspective, we will be paid back many, many times that in terms of the revenues that this investment will generate.”

City and state leaders had already thought of the immense necessity of rebuilding lower Manhattan: They persuaded Congress to appropriate $956 million in business-recovery and job-retention grants and another $8 billion to stimulate new construction. That, apparently, wasn’t enough: The city also started handing out sales-tax exemptions and property-tax breaks to companies that said they would not only stay in New York but would expand, including Aon Service Corporation and Brown Brothers Harriman & Co.

That wasn’t enough, either. Earlier this year, upon Mr. Doctoroff’s insistence, the Port Authority of New York and New Jersey agreed to “invest” $250 million into the World Trade Center site (which only five years earlier it had tried to privatize) and take ownership of—and the risk of leasing—the Freedom Tower.

These are extraordinary measures for extraordinary times—but then, that was how past Mayors thought of it when they institutionalized the practice of handing out tax breaks to companies to keep them here.

Michael Bailkin, a consultant who represents businesses in negotiations over tax incentives, argues that Mr. Bloomberg is not necessarily any more or less profligate than his immediate predecessor.

“He has made a reasoned judgment as a businessman about how attractive a city it is. The times have proven his judgment to be a very reasoned judgment,” Mr. Bailkin told The Observer. “When Giuliani was Mayor, the city was not as strong an attractor to businesses as it is today. The real difference is that New York is a growing market.”

Mr. Bloomberg’s critics praise the Mayor for what they consider the smart investments that have improved education and public safety. But, over time, they suspect that the once-stalwart businessman has slowly loosened his principles.

“It seems that the power of the real-estate industry was more than what the administration anticipated,” said Bettina Damiani, the project director of Good Jobs New York. “Ideally, the Mayor says, ‘Look, I’m a successful business guy; we are going to make the investments we need to make the city attractive in terms of police and affordable housing and education.’ To the extent that the real-estate industry is the big dog in the room, I imagine it was awfully difficult to hold the line.”

One of the rules that Mr. Bloomberg has set up for himself is not to award tax breaks unless the company promises to create jobs or to put money into a building, or both. His critics wonder why, if the Mayor is unwilling to give handouts to keep jobs in the city, he is willing to do so for new ones? Business leaders agree that factors like the quality of the workforce generally matter more for companies scouting locations, and that New York is indeed becoming the type of headquarters city that it should be. But they say that the city, while attractive, isn’t always attractive enough.

“Property-tax breaks are on the margins as a single factor,” said Kathy Wylde, the chief executive and president of the Partnership for New York City. But, she added, “We have no place where somebody can put a trading floor. It has to be built new. That means construction costs that are significantly higher and that will require rents in excess of $80 a square foot. If you can get the same trading floor for $40 a square foot elsewhere and you are a public company, you have to defend that decision.”

A city economic-development official said that capital subsidies—or, rather, investments—serve another purpose. “It provides the type of upfront capital funding that is needed in the early stages of the project, when it might be hard to get that money from other sources,” the official said.

Thus, the city is pitching in $100 million for Atlantic Yards, even though that project is so gargantuan—$4.2 billion—that it’s hard to believe it will make a difference. Opponents of the project argue that the public could end up paying much more, through indirect subsidies and also because the memorandum of understanding calls on the city and state to “consider making additional contributions for extraordinary infrastructure costs.”

Another example of helping out a private enterprise that had no intention of leaving is the new Yankee Stadium, a project for which the city is donating about 25 acres of parkland and spending another $150 million in today’s dollars to recreate that open space elsewhere after the new stadium is finished. The Mayor’s aides argue that the upkeep on the current stadium—which, according to the current lease, the city is responsible for—would have become increasingly expensive. That lease will run out in a few years, but Mr. Doctoroff said that the city wouldn’t have gained much ground through negotiating a new one. “It would have taken the two sides to change the terms and, in terms of our calculations, we would not have been successful.”

Mr. Doctoroff argues that the new stadium, though smaller, is supposed to bring more jobs for the Bronx, though the parks rearrangement is not predicated on that happening.

The Yankees deal had the advantage of appearing not to be a subsidy, allowing the Mayor to claim another victory just days after losing the West Side Stadium, which would have counted as Mr. Bloomberg’s largest subsidy deal ever at $300 million. Still, that number doesn’t come close to the $650.5 million that the city expects to forgo in property taxes over 30 years in order to stimulate construction in the area around the former stadium site, Hudson Yards. City officials say the massive up-zoning of 45 blocks just west of midtown will, by adding 24 million square feet of office space, control, if not depress, Manhattan’s office rents. But because the city says the rents there will be lower than in core midtown, a city board this fall approved property-tax discounts of up to 40 percent to encourage developers to build there.

The logic has puzzled liberal policy wonks, who argue that the tax discounts will only increase the price of land by making it more attractive.

“The city rezoned the land—that adds value. You build the No. 7 [subway] line—that adds value,” said James Parrott, the deputy director of the Fiscal Policy Institute. “Now they say it is so costly to build on the West Side? Why not let the market adjust a little bit?”

Even Senator Charles Schumer, whose Group of 35 report five years ago presaged the Hudson Yards rezoning, said that tax incentives were unnecessary, stressing that the city’s investment in extending the No.7 subway to 11th Avenue would provide an adequate incentive for builders.

That argument has failed to convince the Mayor, however.

“This tax structure is in place to induce people to move into an area that is not developed currently, and which requires a leap of imagination in order to relocate their businesses there,” Mr. Doctoroff said. “We obviously have a tax policy in place that we think is necessary. That speaks for itself.”

The reasons for this transformation, which is just now confronting the fizzling market, are familiar to anyone following New York real estate, and yet they have infected this area with particular fervor. Since January 2004, developers have filed plans for 1,461 condominium units with the State Attorney General’s office for the area east of Second Avenue, between 59th and 96th streets. The much larger western section of the Upper East Side registered just 881 applications.

“It’s a good sign for the economy. It brings more people, and that will be good for businesses in the area, but it comes at a price,” said David Liston, the chairman of Community Board 8. “In almost every case, what typically is being knocked down is the five-story walk-up, which has a particular rent [range] and is being replaced by high-rise buildings that are out of reach for a lot of people.”

In large part, the reason for this happening is because it can: The zoning for the main avenues in the area, dating back to 1961, envisions 15- to 20-story buildings where, until recently, brick row houses have predominated. And while, in some cases, developers argue that they create as many affordable apartments as they destroy, it is not always clear that is their intention.

Some far East Side residents and elected officials want to make sure that it is, exhibiting the same sort of concerned muscle often flexed by East Siders along Fifth and Park.

Last month, the Landmarks Preservation Commission stepped in to landmark two six-story apartment buildings along York Avenue that were part of the City and Suburban Homes complex, an early 20th-century experiment in low-income housing. The move blocked a plan by the owner, Stahl Real Estate, to replace them with two 28-story towers.

While Stahl had suggested it might provide affordable units, the local City Council member, Jessica Lappin, nonetheless pushed for the landmarking, stressing the complex’s historical importance. “These buildings are affordable now,” she told The Observer. “There are rent-stabilized tenants in these buildings right now who would be displaced.”

In other cases, it may be hard to sympathize if affluent tenants are being replaced by affluent buyers. Developer Aby Rosen built two residential buildings, the Wellington at 82nd Street and First Avenue, and the Century Tower Condo at 90th and First, in 2000 and 2002, respectively, with condominium-quality finishes. He and his partners decided to open them as rentals, however, and have just started converting them.

Although he acknowledges that the market “is a little bit softer” now than it was a year ago, Mr. Rosen said that waiting served the developers well: It gave them tax advantages that they wouldn’t have had if they’d opened the building’s condo projects, and now the neighborhood is better established as a destination for buyers.

In addition, they are non-eviction conversions—which means that tenants, if they choose not to buy their apartments at an insider price, get to live out their leases. That slows the rate at which units come onto the market. But Mr. Rosen said that he has no plans to wait out a sluggish market by renewing any rental leases.

“There is never a good or a bad condo market,” Mr. Rosen told The Observer. “Those are units that will always sell. We are not talking about $3,000 a square foot; those are $1,200 to $1,400 a square foot. There is always growth in the area. Obviously there is no subway there, so it makes it more a destination area, but people are still very willing to live there.”

Jacky Teplitzky, a broker who estimates that she does 80 percent of her business east of Second Avenue, said that many of the new condo buyers are, in fact, long-time renters in the neighborhood who have become accustomed to the walk to the Lexington Avenue subway line.

“What I do when I hear of something coming to market is send tons of mailings to people renting in the area,” said Ms. Teplitzky, an executive vice president at Prudential Douglas Elliman who lives on the far East Side herself. “People renting in the area are more likely to stay in the area.”

The developer Jules Demchick is unapologetic about having taken down “a dilapidated group of townhouses” to put up the Cielo, a luxury tower at 83rd Street and York Avenue that opened last winter. (He has sold all but nine of its 128 apartments.) For one thing, the townhouses were vacant. For another, he paid a developer to build affordable rentals elsewhere in the neighborhood in order to qualify for a zoning bonus that allowed Demchick to build more square footage.

“What was on this site were 22 vacant apartments, so no one was displaced,” he said. “We more than replaced those rentals.”

Even if long-time residents are not getting overtly pushed out of the far East Side, the new development has raised anxieties over crowding in schools and on public transit in a neighborhood that is two to five blocks from a subway line. Indeed, urban planners often say that the only reason the city permits such high density in the area is that planners 45 years ago expected the Second Avenue Subway to be built in a matter of years.

“You do not necessarily have a massive displacement of large numbers of people, but you do have increased population density, and I think that is very clearly a planning challenge,” said State Senator Liz Krueger, who represents the East Side and midtown. “The first phase of the new Second Avenue Subway is going to stretch between 96th Street and 63rd Street, and the first day it opens, it is expected to get 400,000 riders.”

That will be about 2013, according to the Metropolitan Transportation Authority. In the meantime, the M.T.A. will start a pilot project for “bus rapid transit” along First and Second avenues, which will entail any number of possible steps to accelerate bus service.

Convincing New Yorkers to buy in an area once known for cheaper rents prompted some creative marketing at first. The developer Sheldon Solow even went so far as to rechristen 61st Street between York and First so he could call his new condo “One Sutton Place North.”

Larry Kaiser, the president of Key-Ventures Inc., a Madison Avenue brokerage, says that the newer large condo towers have avoided addresses on the avenues in favor of ones on the side streets.

Still, Mr. Kaiser said that new buildings with swimming pools and other amenities have made the far East Side a favorite place for young families. But it’s also one of the first places to feel real-estate contractions.

“The things that tend to be moving more quickly are the ones in the most desirable areas and those that are priced correctly,” said Paul Purcell, a real-estate consultant at Braddock + Purcell.

The speculators may be hurting the most: Mr. Purcell gives as an example a friend who had bought a place at the Arcadia, a new condo tower at 408 East 79th Street, expecting its price to appreciate enough to justify reselling it. “I don’t think he needed to flip it, but if the price was right, he would have,” Mr. Purcell said.

The price wasn’t right, but the friend liked the area. He ended up moving to the far East Side himself.

The reasons for this transformation, which is just now confronting the fizzling market, are familiar to anyone following New York real estate, and yet they have infected this area with particular fervor. Since January 2004, developers have filed plans for 1,461 condominium units with the State Attorney General’s office for the area east of Second Avenue, between 59th and 96th streets. The much larger western section of the Upper East Side registered just 881 applications.

“It’s a good sign for the economy. It brings more people, and that will be good for businesses in the area, but it comes at a price,” said David Liston, the chairman of Community Board 8. “In almost every case, what typically is being knocked down is the five-story walk-up, which has a particular rent [range] and is being replaced by high-rise buildings that are out of reach for a lot of people.”

In large part, the reason for this happening is because it can: The zoning for the main avenues in the area, dating back to 1961, envisions 15- to 20-story buildings where, until recently, brick row houses have predominated. And while, in some cases, developers argue that they create as many affordable apartments as they destroy, it is not always clear that is their intention.

Some far East Side residents and elected officials want to make sure that it is, exhibiting the same sort of concerned muscle often flexed by East Siders along Fifth and Park.

Last month, the Landmarks Preservation Commission stepped in to landmark two six-story apartment buildings along York Avenue that were part of the City and Suburban Homes complex, an early 20th-century experiment in low-income housing. The move blocked a plan by the owner, Stahl Real Estate, to replace them with two 28-story towers.

While Stahl had suggested it might provide affordable units, the local City Council member, Jessica Lappin, nonetheless pushed for the landmarking, stressing the complex’s historical importance. “These buildings are affordable now,” she told The Observer. “There are rent-stabilized tenants in these buildings right now who would be displaced.”

In other cases, it may be hard to sympathize if affluent tenants are being replaced by affluent buyers. Developer Aby Rosen built two residential buildings, the Wellington at 82nd Street and First Avenue, and the Century Tower Condo at 90th and First, in 2000 and 2002, respectively, with condominium-quality finishes. He and his partners decided to open them as rentals, however, and have just started converting them.

Although he acknowledges that the market “is a little bit softer” now than it was a year ago, Mr. Rosen said that waiting served the developers well: It gave them tax advantages that they wouldn’t have had if they’d opened the building’s condo projects, and now the neighborhood is better established as a destination for buyers.

In addition, they are non-eviction conversions—which means that tenants, if they choose not to buy their apartments at an insider price, get to live out their leases. That slows the rate at which units come onto the market. But Mr. Rosen said that he has no plans to wait out a sluggish market by renewing any rental leases.

“There is never a good or a bad condo market,” Mr. Rosen told The Observer. “Those are units that will always sell. We are not talking about $3,000 a square foot; those are $1,200 to $1,400 a square foot. There is always growth in the area. Obviously there is no subway there, so it makes it more a destination area, but people are still very willing to live there.”

Jacky Teplitzky, a broker who estimates that she does 80 percent of her business east of Second Avenue, said that many of the new condo buyers are, in fact, long-time renters in the neighborhood who have become accustomed to the walk to the Lexington Avenue subway line.

“What I do when I hear of something coming to market is send tons of mailings to people renting in the area,” said Ms. Teplitzky, an executive vice president at Prudential Douglas Elliman who lives on the far East Side herself. “People renting in the area are more likely to stay in the area.”

The developer Jules Demchick is unapologetic about having taken down “a dilapidated group of townhouses” to put up the Cielo, a luxury tower at 83rd Street and York Avenue that opened last winter. (He has sold all but nine of its 128 apartments.) For one thing, the townhouses were vacant. For another, he paid a developer to build affordable rentals elsewhere in the neighborhood in order to qualify for a zoning bonus that allowed Demchick to build more square footage.

“What was on this site were 22 vacant apartments, so no one was displaced,” he said. “We more than replaced those rentals.”

Even if long-time residents are not getting overtly pushed out of the far East Side, the new development has raised anxieties over crowding in schools and on public transit in a neighborhood that is two to five blocks from a subway line. Indeed, urban planners often say that the only reason the city permits such high density in the area is that planners 45 years ago expected the Second Avenue Subway to be built in a matter of years.

“You do not necessarily have a massive displacement of large numbers of people, but you do have increased population density, and I think that is very clearly a planning challenge,” said State Senator Liz Krueger, who represents the East Side and midtown. “The first phase of the new Second Avenue Subway is going to stretch between 96th Street and 63rd Street, and the first day it opens, it is expected to get 400,000 riders.”

That will be about 2013, according to the Metropolitan Transportation Authority. In the meantime, the M.T.A. will start a pilot project for “bus rapid transit” along First and Second avenues, which will entail any number of possible steps to accelerate bus service.

Convincing New Yorkers to buy in an area once known for cheaper rents prompted some creative marketing at first. The developer Sheldon Solow even went so far as to rechristen 61st Street between York and First so he could call his new condo “One Sutton Place North.”

Larry Kaiser, the president of Key-Ventures Inc., a Madison Avenue brokerage, says that the newer large condo towers have avoided addresses on the avenues in favor of ones on the side streets.

Still, Mr. Kaiser said that new buildings with swimming pools and other amenities have made the far East Side a favorite place for young families. But it’s also one of the first places to feel real-estate contractions.

“The things that tend to be moving more quickly are the ones in the most desirable areas and those that are priced correctly,” said Paul Purcell, a real-estate consultant at Braddock + Purcell.

The speculators may be hurting the most: Mr. Purcell gives as an example a friend who had bought a place at the Arcadia, a new condo tower at 408 East 79th Street, expecting its price to appreciate enough to justify reselling it. “I don’t think he needed to flip it, but if the price was right, he would have,” Mr. Purcell said.

The price wasn’t right, but the friend liked the area. He ended up moving to the far East Side himself.