Cody Lyon
From www.globest.com
NEW YORK CITY-The Metropolitan Transportation Authority board voted 10 to 2 to sell its 8.5 acres of Vanderbilt Yards property at the planned Atlantic Yards site in Brooklyn to developer Forest City Ratner Cos. for $20 million down, and $80 million spread over the next 21 years. As MTA board chairman H. Dale Hemmerdinger pointed out after the votes were cast on Wednesday, "in real estate, you get what you can when you can."
Despite the latest generosity from the public coffers, the New York Times reported that FCRC needs to raise more than $500 million in bonds by Dec. 31 to build the project’s arena and qualify for tax-exempt status.
Specifically, Wednesday’s vote and subsequent new MTA payment schedule allows the developer to spread out payments until 2031. The new terms compare to FCRC’s 2005 original offer of $100 million up front. Even then, the $100 million FCRC bid was $50 million less than a competing offer from Extell Development Corp. for the property.
In a statement released after the MTA vote, Forest City Ratner sounded almost apologetic, saying “delays due to litigation and a difficult economic environment required the approved changes.” The statement adds “we have worked very hard, however, as have our colleagues in government, to ensure that these changes would in no way impact the overall benefits of the project.”
The project, steeped in years of controversy, litigation and now a dried-up credit market, has evolved into a scaled-down version of what was originally sold to public officials and city residents. More evidence of a project facing challenges arrived on June 5, when despite being the recipient of millions of city and state taxpayer-dollar subsidies, Forest City Ratner admitted the shedding of star architect Frank Gehry. Soon after, renderings surfaced that showed less than dynamic designs for the centerpiece arena portion of the project. On June 8, New York Times architecture critic Nicolai Ourousoff referred to the project renderings as a “monstrosity.”
When asked about the scathing Times critique that lambasted what it called more than a “betrayal of a particular community,” an ESDC spokesman tells GlobeSt.com that a final design and rendering of the project has not been released. The spokesman says that “an initial rendering was released, but that will look very different from the end product.”
In the few hours leading up to Wednesday’s vote, a familiar cast of supporters and opponents waited and chanted softly in a block-long line on Madison Avenue under the watch of armed security men and police dogs. Later, the crowd packed themselves into two large rooms on two separate floors of the MTA headquarters, where several signed up to spend yet another three minutes supporting or defending the project before a set of public agency board members, as many of them had done before the ESDC board a day earlier before it approved the new general project plan.
The MTA board as well as observers heard pro-project arguments that pitched Atlantic Yards as an economic engine of urban renewal, a ray of hope in an economically challenged community hungry for union jobs and affordable housing. Others pointed to the restoration of Brooklyn pride that the promised arrival of an NBA basketball team would bring and collective identity that some say disappeared after the exit of Walter O’Malley’s Dodgers to Los Angeles in 1957.
Project opponents, many of whom lectured board members on the definition of fiduciary duty, described the pending board action as a public giveaway, staged in a time when just a month earlier, the transit agency had been the recipient of a taxpayer-funded bailout. Straphangers Campaign chairman Gene Russianoff told the board it should try to structure a better deal. The group Develop Don’t Destroy Brooklyn even made a counter-offer, $120 million, which it said would place the property into a trust called “Unity.”
Another speaker, the Regional Plan Association’s Neysa Pranger, told board members that while the planning group opposed the deal as currently structured, it should be salvaged, but under stricter provisions. Calling Vanderbilt Yards a ‘major asset’ for the MTA and one of the most important transit oriented development sites in the region, RPA’s public affairs director said the “revised agreement appears simply too meager to sacrifice the long term potential of the site.”
Contacted after Wednesday’s meeting, an MTA spokesman defends the new deal, telling GlobeSt.com the agency “is pleased that we were able to reach an agreement with FCRC that acknowledges the current economic situation while still protecting the MTA’s transportation and financial interests.” Further endorsing the deal’s new terms, the spokesman points out that it means “the construction of a new rail yard sufficient to meet current and future LIRR needs, a new subway entrance at the arena and $100 million [net present value] to help fund MTA capital projects.”
The new GPP includes a scale-back of the original $455 million Vanderbilt Yards upgrade which at seven tracks with a 56 car capacity, is down two tracks from the original nine, which was set to contain capacity for 76 cars.
When asked about MTA’s comments, Pranger tells GlobeSt.com, “if you ask the ESDC or MTA, they say the net present value is the same as FCRC giving $100 million up front.”
She worries that the MTA’s pre-recession anticipation of revenue from Vanderbilt Yards and the West Side Rail Yards property sales blew holes in the MTA’s capital budget. And “that’s a problem, because they are relying on that money now,” she says. A major reason “why they should get more money up front, now,” she says. The deal for the West Side yards, a.k.a. Hudson Yards, has not yet closed as the MTA and the Related Cos. continue negotiating.
Pointing to the impact of nearly frozen credit markets, Pranger says “the MTA is renegotiating the deal with FCRC at a bad time. This negotiation period favors the developer. We thought there should be some caveats for realization of greater MTA revenues down the road if the market changes.”
At the MTA hearing, RPA also suggested that ESDC set up a subsidiary much like the city/state 42nd Street Development Corp. to guide future phases of the development at Atlantic Yards. RPA says that authority should include city, state and community representation that has the authority and professional capacity to evaluate and approve proposed changes in project design.
But an ESDC spokesman defends current efforts at community involvement telling GlobeSt.com, “we have been working with our partners at the city, MTA and FCRC over the past several months to create a modified GPP.”
RPA counters, “we recommend the subsidiary include not just agencies from the MTA and government, but from the community as well.” Pranger says that in the rush to secure the project before the end of the year, this element should not be overlooked.
Responding to the perception that the Atlantic Yards plan is being forced upon the public, ESDC says “one detail that seems to be missing from the majority of the press coverage is that the amended GPP presented on Tuesday was created by ESDC,” and that the new GPP will entail another public hearing, two public forums and a period to submit public written testimony.
Charging that the 22-acre Atlantic Yards site is important, Pranger says a 42nd Street Development Corp.-like subsidiary “could parcel the site out over time, which we think is an important point.” She adds “when you get these major mega projects, you can’t just fork the keys over to the developer.” RPA says “none of our recommendations preclude or eliminate the jobs aspect; they would still be created.”
“Maybe the project takes more time to develop, but at least it gets developed right” says Pranger.
When GlobeSt.com requested comments from City Hall on what’s become the constantly unfolding story of Atlantic Yards and RPA's suggestions, the mayor’s office “respectfully” declined.
Meanwhile, despite years of delay and national economic recovery still a term of speculation ESDC says it is looking forward to bringing “this important project to completion for the benefits of the city and state.” And with more hearings on the horizon, more testimony to be heard, it appears that at least for now, the Atlantic Yards story will only continue to unfold.
Tuesday, June 30, 2009
Sunday, June 28, 2009
Tuesday, June 23, 2009
Bloomberg's Frustration grows at WTC
EXCERPT FROM www.globest.com
by Cody Lyon
Link to full story:
http://www.globest.com/news/1437_1437/newyork/179388-1.html?sector=newyork
When it comes to rebuilding the World Trade Center, the Port Authority needs to “figure out a way to come up with something” for financing the project, said Mayor Michael Bloomberg during a radio address on Friday. Staying on message, the mayor cited an earlier joint statement from his office along with New York State Assembly Speaker Sheldon Silver who say “this country’s not going to stand for a hole in the ground,” at Ground Zero.
Implying that both the New Jersey and New York Governors should exert greater influence over decisions at the bi-state agency, Bloomberg suggested that in New York’s case, the PA should also respond to the Mayor, not just the Governor, since many of its larger projects are within New York City borders.
But a spokesperson for Governor David Paterson’s office tells GlobeSt.com that the “Port Authority runs regional transportation facilities; it should remain in the hands of the Governors.”
That said, the Mayor used his air-time to propose tapping into another pool of funds to help finance the WTC project. He told listeners “maybe we can get Congress to help and re-allocate some of the funds for projects that probably aren’t going to get done in the short term, like Moynihan Station.” News reports later quoted Mayoral aides as saying he was talking about $2 billion in un-used tax credits Congress appropriated to city transportation projects after 9/11 including Moynihan Station.
by Cody Lyon
Link to full story:
http://www.globest.com/news/1437_1437/newyork/179388-1.html?sector=newyork
When it comes to rebuilding the World Trade Center, the Port Authority needs to “figure out a way to come up with something” for financing the project, said Mayor Michael Bloomberg during a radio address on Friday. Staying on message, the mayor cited an earlier joint statement from his office along with New York State Assembly Speaker Sheldon Silver who say “this country’s not going to stand for a hole in the ground,” at Ground Zero.
Implying that both the New Jersey and New York Governors should exert greater influence over decisions at the bi-state agency, Bloomberg suggested that in New York’s case, the PA should also respond to the Mayor, not just the Governor, since many of its larger projects are within New York City borders.
But a spokesperson for Governor David Paterson’s office tells GlobeSt.com that the “Port Authority runs regional transportation facilities; it should remain in the hands of the Governors.”
That said, the Mayor used his air-time to propose tapping into another pool of funds to help finance the WTC project. He told listeners “maybe we can get Congress to help and re-allocate some of the funds for projects that probably aren’t going to get done in the short term, like Moynihan Station.” News reports later quoted Mayoral aides as saying he was talking about $2 billion in un-used tax credits Congress appropriated to city transportation projects after 9/11 including Moynihan Station.
Tuesday, June 09, 2009
Mother wins lawsuit Against Hotel for showing Gay Porn
excerpt from EDGE
On October 12, 2007, a Los Angeles County Superior Court jury awarded Edwina McCombs, a Tennessee resident on vacation with her two daughters, then aged 8 and 9, $85,000 after the two little girls were unintentionally exposed to hardcore pornographic material in a Value Lodge motel room in the suburban town of Artesia. According to the plaintiff law firm, the material had included "close up images of people engaged in sodomy and homosexual acts."
Link to full story below:
http://www.edgeboston.com/index.php?ch=news&sc=glbt&sc3=&id=51963&pg=1
On October 12, 2007, a Los Angeles County Superior Court jury awarded Edwina McCombs, a Tennessee resident on vacation with her two daughters, then aged 8 and 9, $85,000 after the two little girls were unintentionally exposed to hardcore pornographic material in a Value Lodge motel room in the suburban town of Artesia. According to the plaintiff law firm, the material had included "close up images of people engaged in sodomy and homosexual acts."
Link to full story below:
http://www.edgeboston.com/index.php?ch=news&sc=glbt&sc3=&id=51963&pg=1
ELMHURST- (Real Deal)
Heeding the siren call...of Elmhurst
October 01, 2007 12:00AM By Cody Lyon and James Kelly
Elmhurst is a relatively quiet neighborhood in northwest Queens not known for much new residential development. But that reputation may change as the area is expected to add more than 120 condo and rental units to its inventory, including two controversial projects by developer James Pi that are back on track after having been stalled since February 2005.
Two new high-end condominium projects -- the C Condo at 79-35 Calamus Avenue and the Miramar Building at 81-14 Queens Boulevard -- and two large rental projects by Pi have been built or are in the process of being built.
The developments are being marketed to a demographic that's largely new to Elmhurst: professionals who work in Manhattan and who have been priced out of Queens neighborhoods closer to the city. C Condo, developed by the Criterion Group, is a four-story, 14-unit luxury building. It has sold more than half of its units since sales began in March.
"It's much harder to bring buyers from the city to Elmhurst than to Long Island City or Astoria, or parts of Brooklyn," said Adriano Hultmann, a senior associate broker at the Corcoran Group, who is marketing C Condo.
However, with significantly lower prices per square foot, Elmhurst seeks to compete. Hultmann said, "The average price per square foot of a unit in our project is $425. The same apartment in Astoria would be at least $600, in Long Island City maybe over $725, and in certain parts of Brooklyn over $800."
The remaining units at C Condo are priced from $280,000 for a 620-square-foot one-bedroom to $525,000 for a 1,200-square-foot three-bedroom, two-bath apartment. Parking spaces are selling for around $20,000.
In the past, developers have had little incentive to start new condo and rental projects in Elmhurst because its large immigrant population has at least in part seen the neighborhood as a pass-through zone rather than a destination. They often establish themselves with a starter home, then upgrade to a larger residence or move out of the neighborhood within a few years, said Jeff Silverbush, owner of Century 21 Best Realty, the neighborhood's largest brokerage. Also, resales of the neighborhood's old single-family detached and small multifamily buildings provided sufficient housing supply so as to not warrant new projects by developers, brokers said.
According to Century 21 Best Realty, homes turn over in Elmhurst an average of just over three years, compared to a city average of four years and a national average of seven.
Elmhurst homes also turn over faster than those in neighboring communities. County assessor data show 248 home sales in Elmhurst from 2005 to 2006, compared to 117 in nearby Rego Park and 183 in Maspeth Park, two areas that border Elmhurst.
Expected to bring noticeable change to the area, Pi Capital Partners is developing two mixed-use luxury rental apartment buildings at Elmhurst's busiest intersection, Queens Boulevard and Broadway. One of these, a four-story, 82-unit building at 86-03 Broadway, is slated to break ground by the end of the year. The ground floor will feature some retail -- offers have already arrived from Staples and furniture retailer Raymour & Flanigan -- and a community facility for either a nonprofit or a day-care center.
Jerry Pi, an operating partner of Pi Capital and son of developer James, was born and raised in Queens. He said the company views Elmhurst as the next economic boom center in Queens.
The area boasts the country's most profitable mall per square foot, Queens Center, as well as smaller commercial strips along Queens Boulevard and Broadway with medical offices, restaurants and furniture and clothing stores.
"The areas [in Queens] that are going to see development in the next few years are Jackson Heights, Astoria and Elmhurst, and Elmhurst has a huge advantage because of the mall and the large volume of consumer spending," Pi said.
In comparison, he argues that Long Island City, Sunnyside and Flushing are overpriced and only offer good opportunities for developers "who really know what they're doing."
In early 2005, when Pi Capital first unveiled its plans, the rental buildings were to be 16 and 17 stories and would have drastically changed the shape of Elmhurst's skyline. Community Board 4 residents, angered by the proposal, came out in full force at a city land use committee meeting in February 2005, claiming that beyond being an eyesore, such an addition of residential units would be a burden on the neighborhood's infrastructure, including the police, fire department and schools. New plans for 86-03 Broadway, described in an interview with Jerry Pi, cut the building down by 12 stories to only four stories, and the building does not include condominiums as before.
Because the project is located above a subway line, it requires special approval by the MTA. Jerry Pi said this would be worked out within the next few months.
Pi Capital Partners' other rental and commercial project is planned a few blocks away at 86-15 Queens Boulevard and is expected to break ground in 2009. The developer is waiting for a Wendy's lease on the site to expire. Pi said that while the specifics of the second building have not yet been decided, the building should be completely designed and approved by the time the fast-food restaurant leaves.
Still, it remains to be seen how strong demand will be for new condos and rentals in Elmhurst.
The Miramar Building, designed by architect Peter Casini and located down the street from Pi's project, won an award for best new mixed-use construction in Queens last year from the borough's Chamber of Commerce, but has only sold half of its 30 units since sales began in July 2006. Prices in the complex range from $279,000 for a studio to $900,000 for the two-bedroom penthouse. Sales were also slow at the beginning of this year at the nearby 42-unit Boulevard Condominium at 81-15 Queens Boulevard, brokers said.
Hultmann remains upbeat about Elmhurst as several of the remaining units at C Condo are going into contract. He predicts the area will continue to blossom as more and more Manhattan residents, tired of paying large sums for smaller spaces, will discover areas in Queens like Elmhurst.
"There is this fear of the unknown," he said of Manhattanites who wait for others to become pioneers in outlying neighborhoods, a fear that may be eased by the relative bargain of living in Elmhurst.
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Kuz
Jerry Pi did not grow up in Queens I went to High School with him on Long Island.
Comment #1 Posted By: Kuz 10/28/08
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The Real Deal reserves the right to delete any comment it finds to be rude, obscene, racist, sexist, bigoted,
irrelevant or repetitive, as well as inappropriate comments about anyone's personal appearance. The Real Deal
does not endorse any comments posted on its Web site.
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October 01, 2007 12:00AM By Cody Lyon and James Kelly
Elmhurst is a relatively quiet neighborhood in northwest Queens not known for much new residential development. But that reputation may change as the area is expected to add more than 120 condo and rental units to its inventory, including two controversial projects by developer James Pi that are back on track after having been stalled since February 2005.
Two new high-end condominium projects -- the C Condo at 79-35 Calamus Avenue and the Miramar Building at 81-14 Queens Boulevard -- and two large rental projects by Pi have been built or are in the process of being built.
The developments are being marketed to a demographic that's largely new to Elmhurst: professionals who work in Manhattan and who have been priced out of Queens neighborhoods closer to the city. C Condo, developed by the Criterion Group, is a four-story, 14-unit luxury building. It has sold more than half of its units since sales began in March.
"It's much harder to bring buyers from the city to Elmhurst than to Long Island City or Astoria, or parts of Brooklyn," said Adriano Hultmann, a senior associate broker at the Corcoran Group, who is marketing C Condo.
However, with significantly lower prices per square foot, Elmhurst seeks to compete. Hultmann said, "The average price per square foot of a unit in our project is $425. The same apartment in Astoria would be at least $600, in Long Island City maybe over $725, and in certain parts of Brooklyn over $800."
The remaining units at C Condo are priced from $280,000 for a 620-square-foot one-bedroom to $525,000 for a 1,200-square-foot three-bedroom, two-bath apartment. Parking spaces are selling for around $20,000.
In the past, developers have had little incentive to start new condo and rental projects in Elmhurst because its large immigrant population has at least in part seen the neighborhood as a pass-through zone rather than a destination. They often establish themselves with a starter home, then upgrade to a larger residence or move out of the neighborhood within a few years, said Jeff Silverbush, owner of Century 21 Best Realty, the neighborhood's largest brokerage. Also, resales of the neighborhood's old single-family detached and small multifamily buildings provided sufficient housing supply so as to not warrant new projects by developers, brokers said.
According to Century 21 Best Realty, homes turn over in Elmhurst an average of just over three years, compared to a city average of four years and a national average of seven.
Elmhurst homes also turn over faster than those in neighboring communities. County assessor data show 248 home sales in Elmhurst from 2005 to 2006, compared to 117 in nearby Rego Park and 183 in Maspeth Park, two areas that border Elmhurst.
Expected to bring noticeable change to the area, Pi Capital Partners is developing two mixed-use luxury rental apartment buildings at Elmhurst's busiest intersection, Queens Boulevard and Broadway. One of these, a four-story, 82-unit building at 86-03 Broadway, is slated to break ground by the end of the year. The ground floor will feature some retail -- offers have already arrived from Staples and furniture retailer Raymour & Flanigan -- and a community facility for either a nonprofit or a day-care center.
Jerry Pi, an operating partner of Pi Capital and son of developer James, was born and raised in Queens. He said the company views Elmhurst as the next economic boom center in Queens.
The area boasts the country's most profitable mall per square foot, Queens Center, as well as smaller commercial strips along Queens Boulevard and Broadway with medical offices, restaurants and furniture and clothing stores.
"The areas [in Queens] that are going to see development in the next few years are Jackson Heights, Astoria and Elmhurst, and Elmhurst has a huge advantage because of the mall and the large volume of consumer spending," Pi said.
In comparison, he argues that Long Island City, Sunnyside and Flushing are overpriced and only offer good opportunities for developers "who really know what they're doing."
In early 2005, when Pi Capital first unveiled its plans, the rental buildings were to be 16 and 17 stories and would have drastically changed the shape of Elmhurst's skyline. Community Board 4 residents, angered by the proposal, came out in full force at a city land use committee meeting in February 2005, claiming that beyond being an eyesore, such an addition of residential units would be a burden on the neighborhood's infrastructure, including the police, fire department and schools. New plans for 86-03 Broadway, described in an interview with Jerry Pi, cut the building down by 12 stories to only four stories, and the building does not include condominiums as before.
Because the project is located above a subway line, it requires special approval by the MTA. Jerry Pi said this would be worked out within the next few months.
Pi Capital Partners' other rental and commercial project is planned a few blocks away at 86-15 Queens Boulevard and is expected to break ground in 2009. The developer is waiting for a Wendy's lease on the site to expire. Pi said that while the specifics of the second building have not yet been decided, the building should be completely designed and approved by the time the fast-food restaurant leaves.
Still, it remains to be seen how strong demand will be for new condos and rentals in Elmhurst.
The Miramar Building, designed by architect Peter Casini and located down the street from Pi's project, won an award for best new mixed-use construction in Queens last year from the borough's Chamber of Commerce, but has only sold half of its 30 units since sales began in July 2006. Prices in the complex range from $279,000 for a studio to $900,000 for the two-bedroom penthouse. Sales were also slow at the beginning of this year at the nearby 42-unit Boulevard Condominium at 81-15 Queens Boulevard, brokers said.
Hultmann remains upbeat about Elmhurst as several of the remaining units at C Condo are going into contract. He predicts the area will continue to blossom as more and more Manhattan residents, tired of paying large sums for smaller spaces, will discover areas in Queens like Elmhurst.
"There is this fear of the unknown," he said of Manhattanites who wait for others to become pioneers in outlying neighborhoods, a fear that may be eased by the relative bargain of living in Elmhurst.
ShareThis
Comments
Kuz
Jerry Pi did not grow up in Queens I went to High School with him on Long Island.
Comment #1 Posted By: Kuz 10/28/08
Leave a Comment
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Email: (optional)
Comment:
The Real Deal reserves the right to delete any comment it finds to be rude, obscene, racist, sexist, bigoted,
irrelevant or repetitive, as well as inappropriate comments about anyone's personal appearance. The Real Deal
does not endorse any comments posted on its Web site.
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All rights reserved © 2009 The Real Deal is a registered Trademark of Korangy Publishing Inc. – The Real Deal, Inc., 158 West 29th Street, New York, NY 10001. Phone: 212-260-1332
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The Grim News of January...(GLOBEST.Com)
Last updated: January 16, 2009 11:23am ULI Panel: More Grim News ULI Panel: More Grim News ULI Panel: More Grim News ULI Panel: More Grim News By Cody Lyon NEW YORK CITY-An early morning crowd of real estate and financial experts was served yet another platter of gloomy news during the Urban Land Institute's "Economic and Real Estate Outlook: 2009 and Beyond" breakfast on Thursday. The packed house heard economists Mark Zandi and Dr. Sam Chandan offer details, predictions and sermons warning of at least two more years of economic adjustments, challenges and hardship. "We're going to suffer the worst downturn since the great depression," said Zandi, chief economist at Moody's Economy.com Moody's Economy.com Moody's Economy.com Moody's Economy.com . A year ago, Zandi, along with a few other noted economists, said the job market was operating at stall speed. In a wire report that appeared in the Dallas Morning News, Zandi forewarned ''either something is going to revive the economy quickly or we're going to get into an unraveling, vicious cycle of declining spending and even weaker job growth." Fast forward 12 months to the ULI breakfast in Midtown, where Zandi, marveling at how rapidly his earlier prediction came true, said that in his 25 years as an economist, "it's about as bad as I've ever seen it." Attempting to lay blame, Zandi said house prices roughly doubled in the first half of the decade, then the process of mortgage securitization, the process of global investor dollars and turning those dollars into mortgages of US homeowners was all fundamentally flawed. "No one in this process had the responsibility of making sure that the loans being made were good loans," he said. Zandi said one of the hallmarks of this particular recession is over-levered consumers who are struggling to manage debt loads and record delinquencies. President and chief economist at Real Estate Economics LLC, Chandan later added that over the course of '09, a challenge the real estate community will have to face head-on is the rising delinquency and default rate. "That default and delinquency will significantly impact the way our market is perceived as an investment class," he said. In 2008, the nation saw 1,400 commercial real estate transactions, down from 4,400 in 2007. And as of November in New York City, commercial real estate deals had fallen off by 61%. Zandi
Chandan said the ways by which public policy sought to support the commercial real estate market in '09 will be a significant factor in terms of judging and accessing the outcomes for the sector for the next year or two. "For the last part of '08 and now the first part of '09, there has been no CMBS market to speak of, and that has been particularly problematic," said Chandan. "By mid-'07, CMBS had become the dominant source of credit availability within the real estate space." Through most of '08, the banks had stepped up where they engaged in reasonable levels of underwriting, Chandan said. But he added that by the end of Q3, the balances on the books of commercial banks for commercial real estate were actually in decline. Even still, Zandi said the best illustration of the overall downturn's severity was the job market. "Nationally, we lost 500,000 jobs in December, which means since those declines began, the nation has seen 2.6 million jobs disappear." Zandi noted that it is the largest continuous employment decline since the end of World War II. He said that here in New York City, thus far, the local economy had held up by most measures when compared to the rest of the nation. However, he predicted that '09 will prove to be extraordinarily difficult, and that given the troubles brewing in the financial service industry, the city will be in for some of its hardest knocks to date. The fact is, this past August, the New York City Economic Development Corp. reported that the city's financial services sector employed just over 344,000. As Zander noted, the financial services industry is still the engine of growth in the city, although in terms of absolute jobs, it represents only around 10% of the overall job base. But in terms of income, those jobs have fueled 25% of the economy. Attempting to frame his prediction as optimistic, Zandi said that '09 would usher in the loss of 250,000 jobs and that by 2010, another 50,000 would join them. Zandi said one could write a book about how the country ended up in the current mess--and noted that in fact he had, written such a book, Financial Shock, a phrase that could describe the look on ULI attendees' faces by the end of the event. He added that the country was in the "third wave," a combination of flippers and speculators with negative equity conditions buying amid rising unemployment. He said that's a problem that will continue to rise through '10 and beyond unless there are significant policy changes. "The losses have undermined all the capital based in the system," he told the audience. "I can see the magnitude of the loans originated in the boom-bubble period from 2004 to '07." Calling the current situation a panic, Zandi said the genesis was the September '08 weekend the federal government took over Fannnie Mae and Freddie Mac. When that happened, it crystallized in the minds of investors that no financial institution is safe. Zandi predicted a 21-month long recession, with no roaring back to health as in recessions past. "I suspect it will be 2011 when people start feeling better."
Chandan said the ways by which public policy sought to support the commercial real estate market in '09 will be a significant factor in terms of judging and accessing the outcomes for the sector for the next year or two. "For the last part of '08 and now the first part of '09, there has been no CMBS market to speak of, and that has been particularly problematic," said Chandan. "By mid-'07, CMBS had become the dominant source of credit availability within the real estate space." Through most of '08, the banks had stepped up where they engaged in reasonable levels of underwriting, Chandan said. But he added that by the end of Q3, the balances on the books of commercial banks for commercial real estate were actually in decline. Even still, Zandi said the best illustration of the overall downturn's severity was the job market. "Nationally, we lost 500,000 jobs in December, which means since those declines began, the nation has seen 2.6 million jobs disappear." Zandi noted that it is the largest continuous employment decline since the end of World War II. He said that here in New York City, thus far, the local economy had held up by most measures when compared to the rest of the nation. However, he predicted that '09 will prove to be extraordinarily difficult, and that given the troubles brewing in the financial service industry, the city will be in for some of its hardest knocks to date. The fact is, this past August, the New York City Economic Development Corp. reported that the city's financial services sector employed just over 344,000. As Zander noted, the financial services industry is still the engine of growth in the city, although in terms of absolute jobs, it represents only around 10% of the overall job base. But in terms of income, those jobs have fueled 25% of the economy. Attempting to frame his prediction as optimistic, Zandi said that '09 would usher in the loss of 250,000 jobs and that by 2010, another 50,000 would join them. Zandi said one could write a book about how the country ended up in the current mess--and noted that in fact he had, written such a book, Financial Shock, a phrase that could describe the look on ULI attendees' faces by the end of the event. He added that the country was in the "third wave," a combination of flippers and speculators with negative equity conditions buying amid rising unemployment. He said that's a problem that will continue to rise through '10 and beyond unless there are significant policy changes. "The losses have undermined all the capital based in the system," he told the audience. "I can see the magnitude of the loans originated in the boom-bubble period from 2004 to '07." Calling the current situation a panic, Zandi said the genesis was the September '08 weekend the federal government took over Fannnie Mae and Freddie Mac. When that happened, it crystallized in the minds of investors that no financial institution is safe. Zandi predicted a 21-month long recession, with no roaring back to health as in recessions past. "I suspect it will be 2011 when people start feeling better."
Remembering the MTA crisis
MTA Nears ‘Doomsday;’ Still No Albany Action
Subtitle
GlobeSt.com | April 30, 2009
Author
By Cody Lyon
Author Title
Original Filename
Sander
world
NEW YORK CITY-If Albany fails to reach a workable solution to close the Metropolitan Transportation Authority's budget gap over the next few days, the daily commutes for eight million New Yorkers will become more expensive, and the time it takes to get from point A to B, will increase markedly. In addition to decreased rail service, several bus routes will disappear on weekends and evenings while others disappear entirely. In fact, if a new funding mechanism does not see consensus at the state capital, the city that never sleeps may eventually see a complete shutdown of the transit system during late evening hours, under a "beyond doomsday" scenario MTA outlined on Wednesday after revealing that its deficit is even wider than originally forecast.
Fallout from what the MTA calls its "doomsday" plan has begun to spur outrage among city residents. On Tuesday afternoon, transit advocates came together with concerned citizens in Manhattan's Union Square, raising their voices against the proposed cuts. One speaker, 76-year-old resident Carl Van Putten of Hunts Point, shouted "where I live, we're not talking about inconvenience, we're talking about survival." Speakers at the event, largely organized on social networking site Facebook, sought to persuade attendees that New York City's economic backbone is its transit system and without it, the entire city suffers unimaginable trauma.
"I think it's a big myth that's been around for around 50 years that New York is somehow not a mass transit town," Wiley Norvell, communications director for the group Transportation Alternatives, told GlobeSt.com as trains rumbled underneath during another rush hour at the Union Square subway hub.
According to the MTA, a plethora of service cuts will be phased in over the next few weeks and months. The cuts began Thursday, as the traditional seasonal Long Island Rail Road service to Belmont Park was eliminated. But perhaps the true reality of the crisis will begin to settle in on May 31--when fare hikes of up to 29% are set to start on the subways and buses, with LIRR and Metro-North following suit the next day.
Then, June 28, train service cuts begin on a set of subway lines that reads like an elementary school chalkboard. The A, D, E F G N, Q and R lines will all see significant service reductions that day. Meanwhile, a list over two pages long details bus routes that will be either sharply reduced or eliminated entirely cutting off entire neighborhoods from the transit network.
"The people who will lose out the most on these cuts are people from Brooklyn, Queens and the Bronx who when they lose their neighborhood bus lines lose their public transit altogether," Norvell told GlobeSt.com.
Blame has largely centered on members of the state Senate who have made their opposition to bridge tolls widely known. Norvell makes no qualms about it, saying it was the Senate that was essentially blocking the proposed plan constructed by former MTA chairman Richard Ravitch's commission. Speaking to what he called the shared pain contained in the Ravitch proposal, Norvell says the plan is the only way the state can raise $2 billion in a politically expedient way.
Introduced last December, the Ravitch plan would have instituted a payroll tax in the 12 counties served by the MTA, implemented a $5 toll on East River and Harlem River bridges and increased fares on the subways moderately. The plan called for a transfer ownership of the East and Harlem River bridges from the city to the MTA, a process that Ravitch described in 2008 as "very complicated."
Despite complications associated with the transfers, Gov. David Paterson strongly supported the plan, as did regional leaders including Assembly Speaker Sheldon Silver. "The speaker was supportive and is strongly supportive of the underlying concept behind the Ravitch Plan which is that all of those who benefit from the public transit system should share in its cost," a spokesman for Silver tells GlobeSt.com.
The spokesman stresses that the people who benefit from the MTA aren't just its actual users, but also businesses and motorists who benefit indirectly, as with drivers who enjoy less congested roadways. "The speaker often talks about the last transit strike, when it took up to three hours to travel from Brooklyn into Manhattan," he says.
MTA leadership, including executive director Elliot Sander, endorsed the plan, saying it was fair and offered both a lifeline for continued operation, but also a means to continue progressing capital improvements and opening windows to future infrastructural improvement and expansion. But opposition to the bridge tolls stood in the way leading Silver to introduce a compromise plan, reducing the bridge-crossing fee to $2 from $5.
However, some Ravitch plan opponents says it was not opposition to bridge tolls per se, but instead what they call yet another fiscally irresponsible mechanism for raising much needed revenue. "Senate Majority Leader Malcom Smith's opposition to bridge tolls is not politically motivated," a Smith spokesman tells GlobeSt.com. "If the MTA assumes ownership of the bridges to collect tolls, they actually assume ownership of four of the oldest suspension bridges in the country. Over the course or the next few years, it's very likely, to almost certain, those bridges will incur significant costs for maintenance, upkeep and general deterioration. He adds that those costs would be passed on to straphangers.
Nonetheless, the severity of the crisis required the Senate to introduce its own plan, which did away with bridge tolls. The most recent Senate version being touted by Smith would include a tax on rental cars, fees on drivers' licenses and a $1 per drop-off fee on taxi drivers--with the exception of livery cabs.
Smith's spokesman says that contrary to critics, including state comptroller Thomas DiNapoli, the numbers in the Senate plan unequivocally add up. However, he adds that Sen. Smith is open to discussing improvements on the Senate legislation.
"We understand that we have to come together to clean up this mess we inherited, and the senator is confident that over the course of the next week, we'll be able to do just that," Smith's spokesman tells GlobeSt.com, adding that "the MTA has displayed years of gross mismanagement and fiscal irresponsibility."
Silver's office says there are a number of ideas on the table, and as of Thursday, conversations continue. "If there's a plan in the Senate that has the 32 votes to pass, it's something the speaker is going to look at," says the spokesman for Silver.
The most vocal opponents to the bridge toll aspect proposed in the Ravitch plan have been state Senators Karl Krueger of Brooklyn's district 27, Rueben Diaz of the Bronx's district 32 and Pedro Espada from the Bronx's district 33. On March 26, Espada insisted to GlobeSt.com that it was the need for increased financial transparency and accountability that the MTA needed to show the State Senate. Saying his district hadn't seen real capital improvements in its subway lines, Espada said the MTA needed to present an actual capital plan to the legislature before the Senate would approve any revenue streams.
However, alluding to automobile commuters, Espada said the MTA rescue must not have a disproportionate impact on any single group of constituents in his district, as well as throughout the city and Westchester, Nassau and Suffolk Counties. As GlobeSt.com reported on April 21, of the 77,284 residents of Espada's district who commute daily, 54,348 take public transit while only 22,936 drive an automobile.
Toll controversies aside, the MTA's doomsday budget was in great part related to the effects of what has turned into a severe economic recession, more specifically the transit agency's dependence on a volatile real estate market's revenue and taxes. "Month to month revenue the MTA takes in from real estate taxes and other sources of revenue fluctuate quite a bit," an MTA spokesman tells GlobeSt.com.
He adds "those taxes are sensitive to the health of the regional economy, the worldwide and global economy really." The spokesman tells GlobeSt.com that the MTA had forecast some reduction from real estate taxes, but the magnitude in the drop "has been beyond what we had forecast."
According to data provided by the MTA, around 8.75% of the agency's budget needs are met by real estate taxes. When broken down, a complex myriad of collection and distribution methods emerge. The tax formula is composed of two major components: the urban tax and the mortgage recording tax.
Urban taxes consist of two taxes applied to certain commercial real property transactions and commercial mortgage recordings within New York City. Tax receipts are available only for transit purposes in New York City with 90% of the receipts earmarked for New York City Transit general operations and 6% used for the partial reimbursement of NYCT "para-transit cost." The remaining 4% earmarked as subsidy for the New York City private buses; the city is currently utilizing these funds to reimburse MTA Bus expenses.
MRTs consist of two separate taxes on mortgages collected in the 12-county region served by the MTA. The first, MRT-1, is imposed on the borrower for recorded mortgages of real property, subject to certain exclusions, at the rate of 0.3% of the debt secured, raised from 0.25% in June 2005. Money collected from the MRT-1 must be applied, first, to meet MTA headquarters operating expenses and, second, to make deposits into the NYCT Account--55% of the remaining amount--and the Commuter Railroad account--45% of the remaining amount.
MRT-2 is imposed on the institutional lender of certain mortgages secured by real estate structures containing one to six dwelling units in the MTA's service area at a rate of 0.25%. MRT-2 gets applied first by the MTA, transferring an amount in excess of $5 million each year to Dutchess, Orange and Rockland Counties based on a formula found on page II-29 in the MTA's Preliminary budget. In 2007, this transfer was $32.9 million, says MTA's spokesman. Second, MRT-2 money is used to pay MTA operating and capital costs, including debt service and debt service reserve requirements if any exist.
Subtitle
GlobeSt.com | April 30, 2009
Author
By Cody Lyon
Author Title
Original Filename
Sander
world
NEW YORK CITY-If Albany fails to reach a workable solution to close the Metropolitan Transportation Authority's budget gap over the next few days, the daily commutes for eight million New Yorkers will become more expensive, and the time it takes to get from point A to B, will increase markedly. In addition to decreased rail service, several bus routes will disappear on weekends and evenings while others disappear entirely. In fact, if a new funding mechanism does not see consensus at the state capital, the city that never sleeps may eventually see a complete shutdown of the transit system during late evening hours, under a "beyond doomsday" scenario MTA outlined on Wednesday after revealing that its deficit is even wider than originally forecast.
Fallout from what the MTA calls its "doomsday" plan has begun to spur outrage among city residents. On Tuesday afternoon, transit advocates came together with concerned citizens in Manhattan's Union Square, raising their voices against the proposed cuts. One speaker, 76-year-old resident Carl Van Putten of Hunts Point, shouted "where I live, we're not talking about inconvenience, we're talking about survival." Speakers at the event, largely organized on social networking site Facebook, sought to persuade attendees that New York City's economic backbone is its transit system and without it, the entire city suffers unimaginable trauma.
"I think it's a big myth that's been around for around 50 years that New York is somehow not a mass transit town," Wiley Norvell, communications director for the group Transportation Alternatives, told GlobeSt.com as trains rumbled underneath during another rush hour at the Union Square subway hub.
According to the MTA, a plethora of service cuts will be phased in over the next few weeks and months. The cuts began Thursday, as the traditional seasonal Long Island Rail Road service to Belmont Park was eliminated. But perhaps the true reality of the crisis will begin to settle in on May 31--when fare hikes of up to 29% are set to start on the subways and buses, with LIRR and Metro-North following suit the next day.
Then, June 28, train service cuts begin on a set of subway lines that reads like an elementary school chalkboard. The A, D, E F G N, Q and R lines will all see significant service reductions that day. Meanwhile, a list over two pages long details bus routes that will be either sharply reduced or eliminated entirely cutting off entire neighborhoods from the transit network.
"The people who will lose out the most on these cuts are people from Brooklyn, Queens and the Bronx who when they lose their neighborhood bus lines lose their public transit altogether," Norvell told GlobeSt.com.
Blame has largely centered on members of the state Senate who have made their opposition to bridge tolls widely known. Norvell makes no qualms about it, saying it was the Senate that was essentially blocking the proposed plan constructed by former MTA chairman Richard Ravitch's commission. Speaking to what he called the shared pain contained in the Ravitch proposal, Norvell says the plan is the only way the state can raise $2 billion in a politically expedient way.
Introduced last December, the Ravitch plan would have instituted a payroll tax in the 12 counties served by the MTA, implemented a $5 toll on East River and Harlem River bridges and increased fares on the subways moderately. The plan called for a transfer ownership of the East and Harlem River bridges from the city to the MTA, a process that Ravitch described in 2008 as "very complicated."
Despite complications associated with the transfers, Gov. David Paterson strongly supported the plan, as did regional leaders including Assembly Speaker Sheldon Silver. "The speaker was supportive and is strongly supportive of the underlying concept behind the Ravitch Plan which is that all of those who benefit from the public transit system should share in its cost," a spokesman for Silver tells GlobeSt.com.
The spokesman stresses that the people who benefit from the MTA aren't just its actual users, but also businesses and motorists who benefit indirectly, as with drivers who enjoy less congested roadways. "The speaker often talks about the last transit strike, when it took up to three hours to travel from Brooklyn into Manhattan," he says.
MTA leadership, including executive director Elliot Sander, endorsed the plan, saying it was fair and offered both a lifeline for continued operation, but also a means to continue progressing capital improvements and opening windows to future infrastructural improvement and expansion. But opposition to the bridge tolls stood in the way leading Silver to introduce a compromise plan, reducing the bridge-crossing fee to $2 from $5.
However, some Ravitch plan opponents says it was not opposition to bridge tolls per se, but instead what they call yet another fiscally irresponsible mechanism for raising much needed revenue. "Senate Majority Leader Malcom Smith's opposition to bridge tolls is not politically motivated," a Smith spokesman tells GlobeSt.com. "If the MTA assumes ownership of the bridges to collect tolls, they actually assume ownership of four of the oldest suspension bridges in the country. Over the course or the next few years, it's very likely, to almost certain, those bridges will incur significant costs for maintenance, upkeep and general deterioration. He adds that those costs would be passed on to straphangers.
Nonetheless, the severity of the crisis required the Senate to introduce its own plan, which did away with bridge tolls. The most recent Senate version being touted by Smith would include a tax on rental cars, fees on drivers' licenses and a $1 per drop-off fee on taxi drivers--with the exception of livery cabs.
Smith's spokesman says that contrary to critics, including state comptroller Thomas DiNapoli, the numbers in the Senate plan unequivocally add up. However, he adds that Sen. Smith is open to discussing improvements on the Senate legislation.
"We understand that we have to come together to clean up this mess we inherited, and the senator is confident that over the course of the next week, we'll be able to do just that," Smith's spokesman tells GlobeSt.com, adding that "the MTA has displayed years of gross mismanagement and fiscal irresponsibility."
Silver's office says there are a number of ideas on the table, and as of Thursday, conversations continue. "If there's a plan in the Senate that has the 32 votes to pass, it's something the speaker is going to look at," says the spokesman for Silver.
The most vocal opponents to the bridge toll aspect proposed in the Ravitch plan have been state Senators Karl Krueger of Brooklyn's district 27, Rueben Diaz of the Bronx's district 32 and Pedro Espada from the Bronx's district 33. On March 26, Espada insisted to GlobeSt.com that it was the need for increased financial transparency and accountability that the MTA needed to show the State Senate. Saying his district hadn't seen real capital improvements in its subway lines, Espada said the MTA needed to present an actual capital plan to the legislature before the Senate would approve any revenue streams.
However, alluding to automobile commuters, Espada said the MTA rescue must not have a disproportionate impact on any single group of constituents in his district, as well as throughout the city and Westchester, Nassau and Suffolk Counties. As GlobeSt.com reported on April 21, of the 77,284 residents of Espada's district who commute daily, 54,348 take public transit while only 22,936 drive an automobile.
Toll controversies aside, the MTA's doomsday budget was in great part related to the effects of what has turned into a severe economic recession, more specifically the transit agency's dependence on a volatile real estate market's revenue and taxes. "Month to month revenue the MTA takes in from real estate taxes and other sources of revenue fluctuate quite a bit," an MTA spokesman tells GlobeSt.com.
He adds "those taxes are sensitive to the health of the regional economy, the worldwide and global economy really." The spokesman tells GlobeSt.com that the MTA had forecast some reduction from real estate taxes, but the magnitude in the drop "has been beyond what we had forecast."
According to data provided by the MTA, around 8.75% of the agency's budget needs are met by real estate taxes. When broken down, a complex myriad of collection and distribution methods emerge. The tax formula is composed of two major components: the urban tax and the mortgage recording tax.
Urban taxes consist of two taxes applied to certain commercial real property transactions and commercial mortgage recordings within New York City. Tax receipts are available only for transit purposes in New York City with 90% of the receipts earmarked for New York City Transit general operations and 6% used for the partial reimbursement of NYCT "para-transit cost." The remaining 4% earmarked as subsidy for the New York City private buses; the city is currently utilizing these funds to reimburse MTA Bus expenses.
MRTs consist of two separate taxes on mortgages collected in the 12-county region served by the MTA. The first, MRT-1, is imposed on the borrower for recorded mortgages of real property, subject to certain exclusions, at the rate of 0.3% of the debt secured, raised from 0.25% in June 2005. Money collected from the MRT-1 must be applied, first, to meet MTA headquarters operating expenses and, second, to make deposits into the NYCT Account--55% of the remaining amount--and the Commuter Railroad account--45% of the remaining amount.
MRT-2 is imposed on the institutional lender of certain mortgages secured by real estate structures containing one to six dwelling units in the MTA's service area at a rate of 0.25%. MRT-2 gets applied first by the MTA, transferring an amount in excess of $5 million each year to Dutchess, Orange and Rockland Counties based on a formula found on page II-29 in the MTA's Preliminary budget. In 2007, this transfer was $32.9 million, says MTA's spokesman. Second, MRT-2 money is used to pay MTA operating and capital costs, including debt service and debt service reserve requirements if any exist.
New York Governor Touts New Innovation Economy
EXCERPT FROM GLOBEST.COM
http://www.globest.com/news/1427_1427/newyork/179119-1.html
Cody Lyon
In an effort to create new jobs, New York Gov. David Paterson said Monday that the state would set aside $100 million for new "Innovation Economy Matching Grants" meant to drive federal stimulus dollars towards New York State research facilities and institutions. But, despite broad pronouncements and a pummeled financial services industry, questions remain on how best to incubate and diversify new economic engines in a city where the cost of doing business remains so high.
Speaking to an audience at the New York Academy of Sciences at 7 World Trade Center in Lower Manhattan, Paterson noted that the average salary of an individual working in the "innovation economy" is over double the salary in the "non-innovation economy," adding later in a release that those jobs produce a "higher multiplier effect." In other words, for every one created in this sector, 3.5 jobs get created overall.
"It is our responsibility to act, and to act with the interests of future generations in mind," the governor said Monday. "We are a state rich in resources, the most impressive of which is our human capital." Pointing out worldwide economic trends, Paterson said "a new economy is emerging: an economy based on knowledge, technology and innovation."
Full Text:
http://www.globest.com/news/1427_1427/newyork/179119-1.html
http://www.globest.com/news/1427_1427/newyork/179119-1.html
Cody Lyon
In an effort to create new jobs, New York Gov. David Paterson said Monday that the state would set aside $100 million for new "Innovation Economy Matching Grants" meant to drive federal stimulus dollars towards New York State research facilities and institutions. But, despite broad pronouncements and a pummeled financial services industry, questions remain on how best to incubate and diversify new economic engines in a city where the cost of doing business remains so high.
Speaking to an audience at the New York Academy of Sciences at 7 World Trade Center in Lower Manhattan, Paterson noted that the average salary of an individual working in the "innovation economy" is over double the salary in the "non-innovation economy," adding later in a release that those jobs produce a "higher multiplier effect." In other words, for every one created in this sector, 3.5 jobs get created overall.
"It is our responsibility to act, and to act with the interests of future generations in mind," the governor said Monday. "We are a state rich in resources, the most impressive of which is our human capital." Pointing out worldwide economic trends, Paterson said "a new economy is emerging: an economy based on knowledge, technology and innovation."
Full Text:
http://www.globest.com/news/1427_1427/newyork/179119-1.html
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