PATH/Fail: The Story of the World’s Most Expensive Train Station

The Port Authority used to set records in good ways.

Santiago Calatrava.
Santiago Calatrava.

Any discussion of the cost of the Hub must start with Santiago Calatrava. He was given the job just two years after the attacks, when emotions were running high and George Pataki was eyeing a presidential bid. A starchitect of the highest order, Mr. Calatrava was known for his complex feats of engineering in fashioning soaring, animalistic structures, with a specialty in public works projects.

The architecture critics were smitten. The design, The New York Times’s architecture critic Herbert Muschamp wrote, “should satisfy those who believe that buildings planned for ground zero must aspire to a spiritual dimension,” and he hoped that New Yorkers would detect the “metaphysical element” in Mr. Calatrava’s work. His design was supposed to spur development throughout the neighborhood and lead lower Manhattan, still reeling from the attacks, out of its malaise. To the extent that the critics were worried, it was about how it would fit in with the architectural context of the site, not its cost.

Mr. Calatrava would eventually become to be remembered with regret among those in his hometown of Valencia, where his City of Arts and Sciences ended up costing more than three times its initial $400 million budget. But at the time, Mr. Calatrava could do no wrong.

In New York, his starting point was far higher than it had been in Valencia. The Federal Transit Administration pledged $1.9 billion for the project early on, and the Port Authority would throw in another few hundred million—a number that would climb much higher. (The feds, acting as enablers to the Port’s profligacy, ended up quietly throwing in another billion dollars to cover some of the cost overruns.)

But at this point, years before construction was to start, the project was, as one former Port Authority commissioner put it, “proposed to get an expansive federal grant at a point in time when nobody really knew what it would cost in its entirety.”

The feds were supposed to pay for nearly the whole thing, and the number was more of a placeholder. The fate of the site was still in jeopardy—Silverstein Properties (which had signed a lease for the site just months before the 2001 attacks) and the Port Authority were still fighting over who would build what, the tower designs hadn’t been finalized and security issues hadn’t been thought through. The Port Authority didn’t have a good grip on what the project would entail—a spokesman told The Observer that the initial estimates for the Hub were “unrealistic.”

Of the nearly $4 billion eventually budgeted for the Hub, a fair amount—the Port Authority has never clearly broken down the costs for the public, but the number likely has 10 digits—went toward common infrastructure that, in any other project without the emotions and political backing of the World Trade Center site, might not have passed the FTA’s muster.

There was $75 million, for example, that was spent to build a deck over the Hub to support the memorial. Another few hundred million are going to infrastructure costs on Greenwich Street with only a tenuous connection to the Hub.

The site, shared among various public and private entities and budgets, includes a lot of common infrastructure that appears to have been disproportionately billed to the Port Authority. The Hub is shouldering significant costs in rebuilding the site’s foundation, and it is also building a web of pedestrian passageways leading from the Hub to the private office towers on the site and across West Street to Brookfield Properties’ World Financial Center.

To win these concessions, Larry Silverstein took advantage of the Port Authority’s eagerness to show some progress on the site. He played hardball with the government from 2004 to 2006, a period of acrimonious negotiations between Silverstein Properties and the Port Authority over who would be responsible for what aspects of the site.

His lobbyists were the best of the best. He hired Global Strategy Group, whose clients have included Eliot Spitzer, David Paterson and Andrew Cuomo, to lobby for him, along with David Samson, who would go on to become the chairman of the Port Authority.

Given the choice between making Larry Silverstein pay his way and trying to get the site finished as quickly as possible, the Port chose the more expensive option. (Whether it worked is debatable—3 World Trade Center is a stump, and 2 World Trade Center is nonexistent; both are awaiting tenants to restart construction, with delivery now slated for 2015 and 2016.) The feds were throwing even more money at the Port Authority—nearly $2.9 billion—and it was the path of least resistance.

After responsibility for the site was ironed out, there was one last chance to bring the Transportation Hub’s cost back down to earth. George Pataki had promised the moon during his years in office, but Eliot Spitzer and his Port Authority chief, Anthony Shorris, wanted to keep the project within its budget.

Mr. Spitzer took a more business-minded approach to the Transportation Hub than Mr. Pataki. “The best way to explain the cost of downtown was the opportunity cost—what was not done because you had to do that?” said Mr. Spitzer in a telephone interview with The Observer. “Do you do Calatrava, or do you do the rebuild of Penn Station? That’s the way I forced us to think about it.”

His pick for executive director of the Port Authority was Anthony Shorris, who spent most of the ’80s as Ed Koch’s deputy budget director and finance commissioner and the early ’90s as the Port Authority’s first deputy executive director.

The public hadn’t yet been clued in, but costs were spiraling out of control. Working with Steven Plate, the director for World Trade Center construction at the Port, Mr. Shorris set to work on a plan that, he thought, would keep the project within its budget, which at the time topped out at around $2.5 billion, without the Port Authority having to contribute $1 billion of its own money. “I was determined not to severely diminish the Port Authority’s capacity because of the World Trade Center,” Mr. Shorris told The Observer.

Mr. Shorris wanted to strip the concourse and platforms of the most expensive Calatrava-designed elements and make use of more of the existing PATH infrastructure that had been serving commuters for a decade.

He told The New York Times in April of 2008 that he would put the full-fat project out to bid, but that “we want to make sure we have that alternative in place that does price out at $2.5 billion, so we know that we have an option to go to.”

But that was the last the public heard of Mr. Shorris’s ideas to keep the Transportation Hub within its budget. Eliot Spitzer resigned less than a month later, and Mr. Shorris resigned several days after that.

PATH/Fail: The Story of the World’s Most Expensive Train Station