Administration Denies That Jets Got ‘Sweetheart’ Deal

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The New York Sun

In the aftermath of calls for the MTA to hold off on its plan to award the development rights for the Hudson rail yards this week, Mayor Bloomberg’s aides and outside analysts denied that the administration had arranged a sweetheart deal for the New York Jets and said the Bloomberg administration’s efforts to help the football team build a stadium and convention center on the West Side have been nothing out of the ordinary.


Mr. Bloomberg has made no secret of his support for the Jets’ proposal to build a 75,000-seat domed stadium at the Metropolitan Transportation Authority site.


He portrays it as a way to jump-start development in the area and a good way to expand the Jacob K. Javits Convention Center.


The owners of Madison Square Garden have a different vision. Concerned about having a competing venue on the West Side, the Garden’s parent company, Cablevision, has said it would build a residential and retail development on the Hudson River waterfront.


The president of the city’s powerful Real Estate Board, Steven Spinola, said the Jets aren’t enjoying any special privileges.


When he was in the city’s economic development office, he often found himself trying to stop companies from moving out of the city, Mr. Spinola – a backer of the Jets plan – said. He was, for example, instrumental in keeping the financial-services company Shearson Lehman in Manhattan. Shearson wanted a site for its computer operations and a deputy mayor called Mr. Spinola to ask if he could find one.


The most appropriate site, Mr. Spinola said, was a property the city had designated to be developed into housing by the Milstein development group.


The city pulled the development rights from Milstein and gave them to Shearson to keep their computer operation in Manhattan, Mr. Spinola recalled.


“The city made the determination that it was more important to keep Shearson in the city than building apartments,” Mr. Spinola said. “This happens all the time. In this case, the expansion of the Javits center and the stadium clearly outweighs any other project’s impact, and the administration is clearly within its rights to push for it.”


That is the argument that the deputy mayor for economic development, Daniel Doctoroff, has made from the outset, and, analysts said, his effort to ensure that the favored project wins the day is part of his job as the administration’s point man on economic development.


“The general point is that our job is to help create greater value for the MTA,” Mr Doctoroff told The New York Sun. “And we’re trying to do that.”


Democratic mayoral candidates repeated their calls yesterday for the MTA to rebuff, or at least defer action on, all three bids it has received for the development rights.


They alluded to reports that the Bloomberg administration had initiated an effort to bring together a half dozen developers to beef up the Jets’ bid by adding a residential component in the neighborhood. That enabled the Jets to raise their offer for the development rights to $720 million.


Under their plan, which was released last night, the developers will pay $440 million to buy excess development rights that the Jets do not want.


“A troubling pattern of possible insider dealing and conflict of interest has cast a long shadow over the rail yard bids,” one candidate, Rep. Anthony Weiner, a Brooklyn-Queens Democrat, said. “Like a thread on a sweater, the more you pull, the more this process unravels.”


The front-runner in the mayoral polls, Fernando Ferrer, a former Bronx borough president, said: “It’s time to go back to the drawing board and reopen the bidding. We shouldn’t be ramming through this sweetheart stadium deal.”


The president of the New York City Partnership and Chamber of Commerce, Kathryn Wylde, said the sensitivity about the administration’s role in the West Side project comes from the presence of two divergent public interests: the city’s focus on developing the West Side and the MTA’s focus on getting as much as it can for the Hudson rail yards.


“Given the short turnaround, and that the bids involved are both contingent on rezoning and other public actions, I don’t think you can regard this as a normal bid process,” Ms. Wylde said. “Cablevision succeeded in confusing the issue to the point that it required clarification. There is nothing suspect or inappropriate on the part of the deputy mayor or the city to help to make that proposal as clear and compelling as possible.”


Mr. Doctoroff denied that he was involved in recruiting developers to become partners in the Jets’ bid.


Mr. Spinola said it was on his initiative that the developers were brought in.


“Dan didn’t ask us to do this,” Mr. Spinola told the Sun. “I let Dan know I was doing something, but I never gave him the details. I initially proposed to the Jets that they just buy the air rights above the site, and they said they weren’t interested in that because, frankly, they weren’t in the real estate business. So I brought the real estate guys in.”


The “real estate guys” are six of the city’s development heavyweights: Stephen Ross of Related Companies, Leonard Litwin of Glenwood Management, David Brodsky of the Brodsky Organization, H. Henry Elghanayan of Rockrose, Donald Zucker of Donald Zucker Co., and Scott Resnick of Jack Resnick & Sons.


Real estate officials said other developers, such as Vornado, are likely to join the bid.


The New York Sun

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