It’s All Developing for Charles Gargano
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The chairman of the Empire State Development Corporation, Charles Gargano, oversees development projects that include the rebuilding of ground zero and the Hudson Yards project. He spoke recently with The New York Sun’s .
Q: You seem a little rushed: Where did you come from?
A: The recent terrorist warnings have made things a little hectic. The governor and I visited the Citicorp Building to reassure everyone that it was safe and that the police and firefighters were doing everything to ensure their security. When you get an initial shock like that, the first reaction is to be nervous, but when you get reassurance from city officials then people feel better.
I also just attended the groundbreaking of the new Bank of America building in Midtown. The timing was great, because this skyscraper, with 2.1 million square feet of office space, is an important signal. It demonstrates to the terrorists that we will keep building tall buildings, that they are not going to prevent us from advancing with our plans.
Should New Yorkers feel nervous about the terrorism threats, especially in light of the upcoming Republican National Convention?
Not at all. We are doing everything in our power to make sure New Yorkers are safe, and we need to trust in the city, the mayor, and the professionals like the police and firefighters who are trained to protect our lives.
There has been a lot of talk about the lack of an anchor tenant for the proposed Moynihan Station that would transform the old Farley Post Office into a new railroad hub. I know this is a very important project for Governor Pataki, so how are things going?
This is a very important project to me, as well as the governor and for every New Yorker. We had an understanding with Amtrak that they would be the station’s anchor tenant, but their new CEO is trying to back out of the agreement. It is ridiculous, because the space they would vacate in Penn Station could be easily leased out and it makes financial sense. But in my opinion, Amtrak is having financial problems and they are trying to look like they’re being frugal. It’s fine, however, because Amtrak is only a minor player. They only have 5% of the passengers that would be at the station. We are talking to New Jersey Transit and the LIRR and will definitely have a tenant for the space. There seems to be an explosion in the number of stadiums New Yorkers may soon see built, including for the Jets on the West Side, the Nets in Brooklyn, and now possibly the Yankees and the Mets. What will this mean for New York taxpayers?
The governor and I have made it clear for nine-plus years that no taxpayer money will go to build a sports arena. We will consider helping with infrastructure improvements, like a platform over the rail yards on the West Side or new subway stations, which helps the public at large. The Yankees are now taking that road, which I am very happy about because they are a great ball club that brings a lot of revenue to the city and their stadium is too old. They are offering $700 million to build a new stadium, with the state and city pitching in to improve roads and other infrastructure. Similarly, the Jets have agreed to build the Sports and Convention Center and we will build a platform and the retractable roof. This discussion of sports arenas is not out of the blue. The fact is, they have been talked about for a long time, but after September 11 these ideas were shelved. Now, almost three years after that terrible day, they are starting to think about this once again.
The MTA has recently said it is having trouble covering its capital plan, and has threatened raising subway and bus fairs to cover costs. It owns the rail yard over which the possible Jets stadium will be built, and critics have worried that the MTA may not get fair market value for the air rights for the rail yard. What are your thoughts?
Well, it is funny because that rail yard has been sitting there for years and no one cared about it, and suddenly it is worth something. We are leveraging an $800 million investment by the Jets for the stadium, which will be used as a convention center most of the time, with a $300 million investment. The MTA will certainly want rent for the use of the air rights, and this will be fair market value.
Your agency is putting in a lot of money to develop Downtown Brooklyn. How important is the stadium in this area’s development?
The Brooklyn development has 2.1 million square feet of commercial space, 300,000 square feet of retail space, and 4.4 million square feet of residential. It is a $2.1 billion project, and only $500 million is for the arena. Our support is primarily for the commercial, retail, and residential development – not the arena. We don’t care about the arena. We aren’t opposed to it, but our assistance is primarily to provide support for the other parts of the plan.
There is concern among some in the real estate profession that the number of developments happening in the city is going to create a glut of office space, which could cut into the revenue these developments will generate. Specifically, they cite 7 World Trade Center, which still has not found an anchor tenant. Is this something to be concerned about?
I don’t think the fact 7 World Trade hasn’t gotten an anchor tenant is a problem, as can be seen by the fact esteemed investment bank Goldman Sachs is building their headquarters in Battery Park City. By the end of 2009, the memorial will be complete, as will the Freedom Tower and a new transit hub. This will be the catalyst for the development of Lower Manhattan and companies will be drawn to the area. Once these buildings go up, and by the time 7 WTC is complete, you will see a strong interest from companies to be downtown.