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Pataki’s Tunnel Vision

Leigh Ann Caldwell Apr 20, 2004

John Zuccotti has pined for years for a high-speed train that would connect Lower Manhattan to the Long Island Rail Road and JFK Airport. And now Zuccotti, president of the Real Estate Board of New York, chairman of Brookfield Financial Properties, the largest commercial real estate firm in Lower Manhattan and advisor to the Lower Manhattan Development Corporation (LMDC), is on the verge of receiving $1.2 billion in post-September 11 aid to bring a train tunnel right to his doorstep. The LMDC is expected to release its final proposal in April. The plans for the train end at the new PATH station on Church St. It will have direct access to the World Financial Center, in which Brookfield has a controlling interest. Easy commuter access to the property will likely increase its demand and value.

“It would make Lower Manhattan a good alternative to Midtown,” says Melissa Coley, Brookfield’s Vice President of Investor Relations and Communications. “It would give direct access to whole new labor pool. People from Long Island could get to Lower Manhattan quickly and efficiently as well providing access to JFK.” The JFK connector will cost an estimated $2 billion to $5 billion.

“We are completely opposed to using [September 11 aid] to building a tunnel to JFK because community needs revolve around housing and jobs,” says Bettina Damiani, Project Director of Good Jobs New York, which monitors the use of taxpayer dollars to ensure efficient government spending. Where Does the Money Come From?

Following the destruction of the World Trade Center, the federal government allocated more than $20 billion in aid to New York City. New York State received $2.7 billion in the form of Community Development Block Grant (CDBG) money, of which $1.2 billion remains unspent. The CDBG money acts as cash. The allocation and distribution of these dollars result in immediate expenditure. Block grant money is issued through the Department of Housing and Urban Development (HUD) and must be approved by the department. According to the HUD website, at least 70 percent of the funds are supposed to be allocated for community development through affordable housing and economic stimulus programs that “ benefit low- and moderate- income persons over a one-, two-, or three-year time period selected by the state.”

David Dyssegard Kallick, senior fellow at the Fiscal Policy Institute and coordinator of the Labor Community Advocacy Network, says block grant money is usually very restrictive in its uses. But Congress lifted the restrictions in approving the rebuilding aid. The Governor’s Plan

On Feb. 19, Gov. George Pataki presented various plans to spend the remaining $1.2 billion on the connector train. (See sidebar on how some of the first $1.5 billion was spent.) A new underground rail link into Lower Manhattan must travel under the East River. This leaves two options: using an existing tunnel or building a new tunnel. (See map for tunnel options.)

Damiani says the high-speed train represents the “constant trumping of city dwellers to suburbanites.” The new train would provide a convenient ride to JFK and cater to commuters from Long Island. If an existing tunnel were used, it would disrupt subway service, says Damiani, noting that the A, C, M, N, and R subway lines would be affected. The Lower Manhattan Development Corporation – the 12-member board set up by Gov. Pataki to redevelop Lower Manhattan – the Metropolitan Transportation Authority, the Port Authority, the Empire State Development Corporation (ESDC), and the City of New York are studying four proposed train routes.

Negotiations are taking place to decide a route, a cost estimate, and a financing plan. It will also determine the amount of block grant money that will be used to fund the project.

High-Speed Train Support
Gov. Pataki is the leading public advocate for the train project. He sits at a nexus of influential players that have the power and money to move the tunnel plan forward. The governor oversees the four agencies that are negotiating the use of block grant money for the JFK connector. The LMDC was created as a bi-partisan council to oversee and guide the rebuilding efforts of Lower Manhattan, but critics say it is just an extension of the Governor. Besides appointing six of the twelve board members, he has considerable sway over the six board members appointed by Mayors Bloomberg and Giuliani.

“The governor has control of the votes,” Kallick says. Zuccotti is one of several downtown real estate moguls pushing for the tunnel project. He sits on the LMDC’s Development Advisory Council, which advises the board on economic development and planning. He presides over the Real Estate Board of New York, which donated hundreds of thousands of dollars to Pataki and other leading state Republicans from 1999 to 2002.

Zuccotti is joined on the Development Advisory Council by Jack Rudin of Rudin Management, which owns 14 office buildings and 7.5 million square feet of office space in New York, half of which is located downtown. Since 1999, Rudin and his brother Lewis have invested $215,000 in state politicians, the majority of that also going to Republicans.

Carl Weisbrod, former president of the New York City Economic Development Corporation and president of the Alliance for Downtown New York, is one of six LMDC board members appointed by Pataki.. The Alliance for Downtown, the City’s largest Business Improvement District, oversees all economic growth and planning for all of Lower Manhattan below Chamber Street.

“He [Pataki] is catering dramatically to the real estate industry,” says Damiani of Good Jobs New York. “The real estate industry are the ones pushing for the tunnel and they are winning the battle on most of the money being spent.” Pataki spokesperson Lynn Rasick says “the Governor believes that both short term and long term development of Lower Manhattan is essential” to the economic prosperity of the area. She confirmed that the LMDC, the Port Authority, the transportation authority, the City of New York, and the ESDC are currently involved in negotiations on the use of block grant money for an airport connector. Pasquale DiFulco, spokesman for the Port Authority says, “there is no question that the Port Authority supports the rail link to JFK. Connecting passengers to area airports is a priority of ours.” DiFulco says the new Air Train, which connects the A train to JFK, averaged 5,700 paid riders per day during March. 83 million people flew into JFK last year. New York City Mayor Michael Bloomberg has said little about the rail link. Last year he released his “Vision for Lower Manhattan.” It received praise from community groups and advocates. The plan included job creation and housing programs, and improving subway service in Lower Manhattan. The Mayor’s spokesperson Jennifer Faulk says he is deeply involved in block grant negotiations. She said the mayor believes the funds could be used in better ways than a LIRR/JFK connector train. Community Opposition

“September 11 meant the American flag in the right hand and the American dollar in the left. From the LMDC, all we hear about is the needs of the real estate developers,” says Victor Papa of Immigrant Social Services. Papa’s opinion echoes throughout Lower Manhattan neighborhoods. Residents of the Lower East Side and Chinatown say Lower Manhattan needs jobs and housing, not a rail link to the airport.

More than 270,000 workers in New York lost their jobs following September 11, according to the Labor Community Advocacy Network. The Lower East Side and Chinatown were particularly hard hit with Chinatown losing 25 percent of its jobs. The residents of these neighborhoods have different plans but similar ideas on ways to spend the block grant money. At a March 16 public forum, the Civic Alliance provided residents an opportunity to choose how they’d like to spend the remaining $1.2 billion of the block grant money. In the survey, 37 percent of participants selected affordable housing, and 23 percent wanted economic development, including job creation programs. Six percent put their money on the JFK rail link.

Barbara Capporale of the Good Ole Lower East Side, stresses the urgency of job creation and housing. She and her peers have lost jobs since September 11 and cannot afford to pay their rent. “It’s like a big ecosystem, people want to work where they live. If they are displaced, their whole support group breaks apart,” says Capparelle. Bin Lang of the Chinese Workers and Staff Association also wants housing and job subsidies. She puts the blame directly on Gov. Pataki. “He is ignoring our needs,” Lang says. (See sidebar about alternative proposals to the JFK rail link tunnel.)

Kallick says the use of the block grant money is not supporting an economy of people “who live and work in the city. Rather, it is promoting the alternative, an economy relying on a few industries being financed by people who come in from the suburbs.” What chance do the opponents have?

Following the release of the final proposal of the JFK rail link, the LMDC is expected to create a Partial Action Plan. A two-week public comment period will follow. Kallick is cautious about the residents influence on the proposal. “There is an obligation for the LMDC to answer comments, but there is no obligation for them to follow them.”