Another Appraisal, Another Day Deeper in Debt

This morning, board members of the Metropolitan Transportation Authority took it for granted that Deputy Mayor Dan Doctoroff’s No. 7 extension was going to cost more than its $2 billion estimate, even throwing around numbers as high as $3.5 billion.

What that means is that the developers’ tax payments would no longer cover the cost of running the line out to 11th Avenue and down to 34th Street. Instead, the M.T.A.–and, indirectly, the poor schmucks who take it to work each day–will have to help out.

“I don’t think they are going to give us a billion-and-a-half-dollar blank check if there is an overrun like that,” M.T.A. Chairman Peter Kalikow told his board. “I clearly think there are some areas where we should be covered for some of the overruns.”

Meaning that the M.T.A. will have to pay for overruns in other areas, so that while the sale of the rail yards development rights will ease the $1 billion gap in the agency’s capital plan, overruns on No. 7 extension could open that gap back up.

The M.T.A. wasn’t supposed to pay for any of the No. 7 extension, but that was before the Jets stadium deal fell through. Now, the city has backed off that guarantee, board members said at the meeting.

The board this morning put off a vote on Doctoroff’s $500 million offer for the rail yards but did give Kalikow the authority to negotiate an agreement. The resolution also called for a new appraisal of the value of the properties. It didn’t sound like that appraisal would guide negotiations, however.

“My hunch is that the letter we received and the discussions probably would not allow for any meaningful increase in that price,” Kalikow said, “though we have some issues we have to talk about regarding value. In some ways, sometimes, there are more ways to get value rather than just getting a check, so value is an issue that is always on my mind.”

Matthew Schuerman

Another Appraisal, Another Day Deeper in Debt