Wednesday, September 09, 2009

At hearing on new MTA head, Kruger warns murkily of intransigence on AY; Perkins says AY deal lost MTA public confidence

I questioned last week whether Jay Walder, nominated as chairman and CEO of the Metropolitan Transportation Authority (MTA), would be asked at state Senate hearings about the agency's controversial revision of the deal with Forest City Ratner for the Vanderbilt Yard.

Well, not quite, but AY certainly came up at the second and final hearing, held yesterday at the State Office Building in Harlem, and there was a murky hint that the Vanderbilt Yard deal might be stalled by some additional MTA effort at due diligence.

Walder, who faces a confirmation hearing on Thursday, drew coverage for comments on improving service, New York's lagging standing among transport systems, and labor costs.

Kruger's warning

In fact, state Senator Carl Kruger, long ready to carry Forest City Ratner's water (and also receive campaign contributions), issued a press release before the hearing that stated that the hearing left him feeling “cautiously optimistic” that the Atlantic Yards project will proceed as planned to provide Brooklyn and the city with “an urgently-needed economic boost” in the form of jobs, housing, retail and commercial space and an arena to house the Nets basketball team.

“We were deeply concerned on the Finance Committee that the MTA would become an obstructionist body that would ultimately stand in the way of Atlantic Yards,” said Sen. Kruger, Chair of the Finance Committee, noting that the full MTA board had supported the Forest City Ratner project since its inception.

“Today, after questioning Jay Walder, we remain cautiously optimistic that Altantic Yards will finally, and at long last, move forward,” he said.

Kruger didn't actually ask Walder any questions about Atlantic Yards. However, in a rather free-associative statement, he referred to "Atlantic Yards and the MTA's inability to finally close down on that, as an agreed-upon already contractual arrangement but sits on some bureaucratic desk in a way that may block it from ever really happening because of the time constraints that are being placed on it..."

(I didn't attend the hearing but listened to a digital recording.)

Concern from Perkins

State Senator Bill Perkins, who's been critical of Atlantic Yards, didn't question Walder about the project, but did bring AY up in his opening statement.

"The MTA's next head must exceed all predecessors in transparency and accountability," said Perkins, who chairs the Committee on Corporations, Authorities, and Commissions. "The MTA's biggest challenge is to restore public confidence--for example, the way it handled the deal at Atlantic Yards. The next head of the MTA must ensure that public benefits tied to the development rights are commensurate with the rights being conveyed and that the public is duly apprised of the rationale behind such deals."

Credibility from MTA

Walder, a New Yorker who formerly ran Transport for London, agreed, "We need to address the issues of credibility, accountability, and transparency... We must develop public information in a way that's clear, concise, relevant, and accessible."

Public authorities reform

Walder said he supported "the broad goals" of the effort, led by Perkins and Assemblyman Richard Brodsky, to reform public authorities.

However, Walder essentially endorsed some of Gov. David Paterson's hesitation in signing the bill, stating that a provision that all contracts over $1 million be examined by the state comptroller would be inefficient.

Public-private partnerships

State Senator Diane Savino warned that a public-private partnership used to help run the London Underground "was a massive failure" and urged Walder to resist calls to privatize the subway or enter into public-private partnerships.

"The effect of the public-private partnership is well known to me," Walder responded. "To be very clear, when we started at TFL, with the support of the mayor of London, we opposed the public-private partnership, even to the point of taking it to court... four years after it started... it went into bankruptcy. Ultimately, the extra bill for the taxpayer is about $4 billion."

"Having said that, I don't believe public-private partnerships for the New York City subway will make any sense at all. There are places where public-private partnerships have been used in London. The Docklands Light Railway is one."

Anyone thinking about entering into such partnerships, he said, should do so "with their eyes open.

While Atlantic Yards is not a public-private partnership to operate the transit system, Forest City Enterprises has used the term "public/private partnership" to describe AY as a whole.

And it does represent a partnership model to produce a replacement railyard for the Vanderbilt Yard, and already the MTA and its constituency is on track to get a smaller yard, housing 56 cars, rather than a larger one, housing 76 cars, as initially planned.

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