Monday, November 09, 2009

At panel on stalled megaprojects, AY draws implicit skepticism and indirect support (but only if there were infrastructure investment)

So, is Atlantic Yards the right kind of megaproject? AY came up only glancingly during a panel on Saturday during the Institute for Urban Design's conference Arrested Development: Do Megaprojects Have a Future?, but panelists' comments, in general, offered much implicit skepticism--though some indirect support--for Brooklyn's most controversial project.

Notably, they portrayed megaprojects as mainly (but not exclusively) public infrastructure projects, such as transportation, not sports facilities.

And while one panelist, former developer Vishaan Chakrabarti, made a case for "extreme density" as a way to save energy in a steadily urbanizing world, he said such projects had to include "very intense" infrastructure investments in mass transit, parks, and schools.

Atlantic Yards, while it's supposed to include an upgraded Long Island Rail Road yard, would have no subway improvements other than a new entrance. There'd be space for a school but the new open space would be long-delayed--as opposed to beforehand, as with Battery Park City--and mostly serve the new residents rather than "Brooklyn," as developer Forest City Ratner has promised.

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

Stringer: need for balance

In the keynote address for the panel "Megaprojects in the Metropolis," held at Cooper Union, Manhattan Borough President Scott Stringer tried to strike a balance. "The city has to change and has to grow," he said. "It always struck me how City Hall or megadevelopers will come into a community and they will say, Well, this is what we're going to build, this is how tall we're going to build is and we'll give you some crumbs for the community along the way. When I became Borough President, I realized the only way to build our projects with and preserve our communities is to get more community stakeholders at the table. And that's why we spent so much time building our Community Board reform effort, to bring people into the planning process. See, I do believe that development is essential for our city. But I also believe that community-based planning, and the city and the developers working together, is actually the way this city will stay vibrant and will stay competitive."

Of course, with Atlantic Yards, community boards were bypassed completely because it's a state project, and the criticism and opposition posed by the three affected CBs was essentially ignored.

Stringer, notably among borough presidents, has made an effort to strengthen community boards, but the balance isn't easy--he portrayed the Columbia University expansion and a Harlem rezoning as a win-win, though a good number of people in the neighborhood might disagree.

Legacy issues

"Part of what I think has happened over the last ten years is elected officials who are responsible for planning figured out they were more interested in leaving their legacy intact than figuring out how to build these large projects," Stringer said.

While Stringer was referring to transportation projects like the Second Avenue subway and Moynihan station, his "legacy" comment recalled Brooklyn Borough President Marty Markowitz's public disavowal--at least for now--of any legacy.

Prioritizing projects

Stringer suggested a need to prioritize. "We can't do every single big project," he said. "There's just not enough money, and we are in a recession. What we can do is prioritize, and go from ten megaprojects to three or four, and order them in priority, what will jump-start the economy… create jobs."

Note that Atlantic Yards, which would of course create short-term construction jobs, would not create jobs at the level of office development or new transportation infrastructure.

"Second, there has got to be an understanding that a lot of projects are not just city-centric, but regional," Stringer said, noting the connection to New Jersey and Albany. While he referred to the Port Authority, which has bistate responsibility, it should be remembered that, from a regional perspective, the tri-state area doesn't need another arena, given the presence of an under-utilized arena in Newark. But one of the reasons New York City officials supported the Brooklyn arena was the opportunity to poach tax revenues from New Jersey.

Still, as was discussed later during the panel, it's very hard to follow the Canadian model, where cities and regions work much better as planning units.

Stringer, in his closing remarks, suggested that a balance was possible. "When you listen to neighborhoods, we do come up with the best projects," he said. "The stadium project in the past, on the West Side railyards, was a mistake and people knew it, so it didn't happen. The High Line was not a mistake and people knew it would create tourism, people knew it would create millions of dollars to local businesses…we don't have the stadium, but we have the High Line. That's urban planning at its best."

No one else on the panel was quite so optimistic.

Who pays?

Susan Fainstein, Professor, Department of Urban Planning and Design, Graduate School of Design, Harvard University, reminded the audience that financing, not planning, drives a project. First a developer thinks profit is possible, the developer goes to lenders, then partners with the public sector. "So money drives development, not the other way around."

She asked rhetorically whether "bold vision" (a developer's phrase) is what we need, as opposed to a more incremental approach. And she noted that's hard to have citizen participation in certain megaprojects, such as on the outskirts of Amsterdam and London, where there's public apathy because nobody's directly in the path of the plan.

(Brooklyn, as we know, is a bit more contentious.)

"Extreme density"

Chakrabarti, Marc Holliday Professor of Real Estate Development; Director, Real Estate Development Program, Graduate School of Architecture, Planning & Preservation, Columbia University, reflected frequently on his work for the Related Companies on the Hudson Yards plan.

He said the question was what kind of transformation we seek. "I would argue that high density, even extreme density, is the right thing to do when it's coupled with very intense infrastructure development: mass transit, parks, schools." That, he said, "will give us a leaner, greener, meaner economy. I'd argue that that is exactly what we are not doing today. And we're doing it in a competitive world where we may very well suffer the consequences of not doing it."

His example: there are 12 flights a day from Newark to Philadelphia, which is completely unnecessary.

Chakrabarti pointed out that Shanghai in the 1990s built 900 million square feet of space, while all of Midtown Manhattan is 250 million sf and Lower Manhattan 92 million sf. Meanwhile, while the country needs $150 billion in high-speed rail investment, there was only $8 billion in the federal stimulus package for high speed rail. And China is spending $585 billion on infrastructure, with lots of high-speed rail.

The question, he said, is whether our megaprojects are going to be tall or sprawl. "I would argue that West Side of Manhattan should be extraordinarily dense, but you have to have infrastructure to support that density."

New York City, he said, uses one-third the energy per capita of the rest of country, thanks to mass transit and party wall construction.

While he said he's not against green buildings, driving two hours in a car to get to a "green" house is counterproductive.

He said Moynihan Station should be already be under construction. "Instead, we've completed three-and-a-half environmental impact statements. I think we've reached a sense of paralysis in this country about how we allocate public resources."

What kind of megaprojects?


Jeff Madrick, Senior Fellow, Schwartz Center for Economic Policy Analysis, The New School, and author of The Case for Big Government, gave a historical analysis, looking back at the Erie Canal, railroads, sanitation and sewer systems, roadbuilding.

He suggested that the public's relationship with government changed drastically in the 1970s, as distrust began, and then grew further under the presidency of Ronald Reagan. So "we became, when it came to government, a pessimistic nation," with a lack of a belief in planning, taxes, and public investment.

Public sector investment

During the discussion period, Chakrabarti returned to the density issue, with a reference to Atlantic Yards.

"If you took the kind of density you see around Grand Central, if you took the density proposed at Hudson Yards, and spread that out into the region, the carbon footprint of that would be unconscionable," he said. "How to structure the public-private benefits [is] absolutely the critical question."

"I think if you ask Forest City Ratner, if you ask Related, would they love to see the public invest in actually building the platforms, and actually split up development obligation, I think they would absolutely sit down at the table and discuss that," he said. "The problem is the public first cannot afford a billion and a half dollar platform over the West Side Yards, so the question is how do you structure something that will actually make that density happen. The density should happen where a lot of transportation infrastructure exists."

Well, yes and no. The platform over the Vanderbilt Yard in Brooklyn would be under a hundred million dollars, at least according to the Metropolitan Transportation Authority's appraisal (though not Forest City Ratner's initial bid), and there's $305 million in direct subsidy already. And if the MTA had built the platform and put the site out to bid Forest City Ratner would've faced a lot more competition.

World cities

Can New York City compete with growing global cities like Singapore, Shanghai, Hong Kong, and Dubai?

Chakrabarti said things would change when gasoline prices go up, noting that, when they did recently, mass transit use increased.

Fainstein pointed out those examples were not robust democracies. Chakrabarti responded that there was similar investment in Bombay.

Fainstain said it would be hard to eliminate the local voice, given a commitment to home rule.

Chakrabarti was more optimistic, citing the "remarkably sophisticated" Community Board 4 in Manhattan that approved the rezoning for Hudson Yards. "In that case, they really wanted promises that the subway line would be built, that parks would be built," he said. "It's a quid pro quo."

The open space promised "for Brooklyn" in the Atlantic Yards project would not come for years and would mainly serve the new residents.

Socializing risk

One questioner, pointing to developer Larry Silverstein's negotiations at Ground Zero, asked if developers attempt to privatize profit and socialize risk. Fainstein agreed, pointing to the Times Square development, where huge subsidies were justified because nobody would pay market rent. Now, she said, they do get market rent, "but we are not getting subsidy back."

When it comes to public-private partnerships, "the public sector could bargain a whole lot better than it actually has," she said.

That comment, I'd suggest, could be just as easily be applied to Atlantic Yards.

Chakrabarti closed by pointing out that New York City every year gives $18 billion more in taxes to the state and federal governments than it receives, so, if tax revenues were returned, the city's major infrastructure projects should be built.

"I don't think the public should ever pay for or finance development that the private sector wouldn't," he said. "At the same time, I think it's important to understand that Midtown and Lower Manhattan support every public good in the city. We have a better affordable housing track record than the entire state of California. We have some of the most extraordinary parks in the world, some of the most extraordinary waterfront, that's all supported by the two engines of Lower Manhattan and Midtown. And that again plays to the point of urbanization and infrastructure."

In other words, he was talking much more about office space than housing. And we know what's happened to AY office space. Was there ever even a market for it? I wrote in January 2006 that office space was overpromised from the start.

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