Assembly Member Wants Hudson Rail Yards Opened Up to Bids From Private Developers
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The city’s troubled bid for the Hudson rail yards, central to Mayor Bloomberg’s vision for future development on the far West Side of Manhattan, could face private-sector competition.
At a public hearing yesterday, Assemblyman Richard Brodsky grilled the chairman of the Metropolitan Transportation Authority, Peter Kalikow, over the wisdom of accepting the city’s bid of $500 million — well below a recent appraisal that set the value of the development rights at about $1.5 billion. Mr. Brodsky asked the chairman to open up the rail yards to expressions of interest from private developers.
Mr. Kalikow said he was prepared to accept the city’s low bid because of the relative certainty of the offer, and the city’s promise to pay about $2 billion to extend the no. 7 subway line, a capital project that would typically belong to the MTA. Mr. Kalikow said his priority is to raise $1 billion from selling real estate assets to pay for the MTA’s five-year capital plan.
In July, City Hall offered $500 million to the MTA to consolidate its control over the 26-acre Hudson rail yards, the vast undeveloped tract of land west of Tenth Avenue between 30th and 33rd streets. The Bloomberg administration hopes to acquire millions of square feet of development rights in an effort to solidify a bond issue, which would fund the western extension of the 7 line and spur development.
The front-runner in the race for governor, Attorney General Eliot Spitzer, good government groups, and a former chairman of the MTA, Richard Ravitch, were among those who called the city’s offer too low. The city has said that its offer is discounted based on the cost of a platform over the yards, and a provision for affordable housing.
Mr. Brodsky, a Democrat who heads a committee that oversees public authorities, said Deputy Mayor Daniel Doctoroff declined an invitation to attend yesterday’s hearing.
A spokeswoman for the Bloomberg administration, Jennifer Falk, said in a statement that that city believes its offer “is beneficial to all parties involved — the City, the MTA and the west side community.”
A source familiar with negotiations said the city is considering a proposal that would give the MTA a share of future profits from developing portions of the rail yards. Mr. Spitzer made a similar suggestion last month when he criticized the city’s offer in a letter to the MTA chairman. Mr. Kalikow said yesterday he could seek the opinion of Mr. Sptizer about the rail yards when and if he is elected governor, but not before then.
The staff attorney for the Straphangers Campaign, Gene Russianoff, said at the hearing that the cost overruns on the planned 7 line extension could put pressure on fares and end up costing taxpayers. The city’s estimate of $1.9 billion is about two years old. Mr. Russianoff also said that too high a price for the yards would force developers to build big, angering the local community.
The president of TransGas Energy, Adam Victor, who has tangled with City Hall over his proposal to build a power plant in Greenpoint, said yesterday that he was considering bidding about $1.5 billion for the rail yards.
A spokesman for the Durst Organization said the developer is no longer interested in the rail yards and thinks the city should develop it.