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Developer debuts West Portal, easing LIRR path to terminal; upgrades said to be worth $500 million!

Newsday and two TV stations seem (so far) to be the only news outlets covering the unveiling of the operational West Portal to Atlantic Terminal, an upgrade to the Vanderbilt Yard that allows trains being stored and serviced to go directly to the commuter tracks rather than perform a more time-consuming and awkward maneuver.

(I wasn't invited to the press event.)

Newsday reported yesterday, in LIRR: New path to Atlantic Terminal may ease commuter delays
For more than a century, routing a train from Atlantic Terminal into the yard, where it would be cleaned and serviced, required a complicated and time-consuming set of movements. Trains would have to travel east from the station about three-quarters of a mile, and then back west again through the only portal leading to the adjacent outdoor rail yard.
The movement, which takes about three minutes to complete, would block all train traffic into and out of the station until the tracks were clear.

That should ease potential and actual delays. Below is the page from the 2006 environmental review that shows the existing storage of the train in the western part of the railyard, with that moved to the eastern part (with a somewhat diminished capacity now), and the new West Portal under Atlantic Avenue.

$500 million in upgrades?

Reports Newsday:
The new access point is among more than $500 million in upgrades promised to the LIRR by private builder Greenland Forest City Partners as a condition of an agreement to allow the Barclays Center to be built partially on top of the original Vanderbilt Yard.
In addition to relocating the yard’s storage tracks, Greenland Forest City Partners is installing new signal and switches, new sewage connections for servicing train bathrooms, a new electrical substation and an employee facility. The improvements are expected to be completed next year.

Hold on.

First, no one has ever valued the entire infrastructure project at $500 million, and it would be interesting to see that detailed. Newsday in March 2015 reported that the improvements were being "delivered to the railroad free of charge," which of course is not the case.

At that point, "Ratner officials"--presumably representing Greenland Forest City Partners--"declined to disclose the project's cost." In 2009, the MTA said the new railyard would be valued at $147 million, while an MTA official said the previous, larger iteration would have been worth $250 million, after inflation.

Forest City has also said the new subway entrance--an MTA improvement, not an LIRR one--cost $72 million.

Value beyond the arena site

Note that this was not promised simply to be able to build part of the Barclays Center in the bed of one segment of the Vanderbilt Yard. It was promised, along with $100 million in cash, delivered over 21 years at a gentle interest rate (thanks to a 2009 renegotiation), for the right to develop some 3.6 million square feet of development rights.

The total pledged by the developer, at the time of the deal in 2006, was below the appraised value of $75 per buildable square foot and the appraised estimate of infrastructure required, though the appraiser surely undervalued the cost of the replacement railyard and deck.

Since then, the value of the development rights has skyrocketed, to perhaps $350 per square foot. If so, that adds up to a value of $1.26 billion. Sure, the developer has infrastructure costs--$500 million (?) for the railyard, and then more for the deck--and construction costs to build the towers that would then deliver revenue.

The point is: it's not a simple deal, nor a giveaway by the developer.

Oh, a portion of the money is apparently coming from cheap loans from immigrant investors under the EB-5 program, since the investors accept a low interest rate because their priority is green cards for themselves and their families.

As I wrote in May 2015, the public pays, indirectly, by letting Forest City and Greenland market public assets--those visas--which surely would produce a more significant public benefit were the program reformed. (For example, visas could be auctioned off and/or the funds could go directly to the Treasury.)

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