Wednesday, February 23, 2005

Latest Counterbid May End Up To Be Most Short-Lived

Click here: Latest Counterbid May End Up To Be Most Short-Lived - February 23, 2005 - The New York Sun

Subject: Latest [WS Rail Yard] Counterbid May End Up To Be Most Short-Lived
Date: 2/23/2005 6:11:15 A.M. Eastern Standard Time
Sent from the Internet (Details)

Publication:The New York Sun; Date:Feb 23, 2005;
Section:New York; Page:3


Special to the Sun

The latest and most lucrative bid for the right to develop the West Side
rail yards may also be the most short-lived.

An energy company, TransGas Energy Systems, which submitted a $700 million
offer Monday for air rights at the 13-acre site, said it does not plan to
respond immediately to yesterday’s request for proposals sent by the owner
of the rail yards, the Metropolitan Transportation Authority.

The nominal value of the unexpected and conditional offer by TransGas was
$100 million more than Madison Square Garden offered and $600 million more
than the New York Jets had offered for the air rights, or development
rights. But the president of Trans-Gas,Adam Victor,said: “We are not
submitting anything further until we meet with the MTA.”

The cash-strapped agency, which is run by the state, hopes to sell the air
rights to raise money to plug a multibillion-dollar budget gap in its
capital plan for the next five years. The RFP sent out yesterday was in
response to calls for an open and competitive bidding process meant to
increase the price of the development rights. Mr. Victor said his
“non-conforming bid” would do just that.

“We believe it’s up to the management of the MTA to weigh the benefits of a
non-conforming bid against the paradigm they set forth in the RFP,”he said.

But the MTA will not entertain any proposals that do not conform to the
RFP, a spokesman said.

“We are delivering to interested parties copies of the RFP,” the spokesman,
Brian Dolan, said. “It is a process we put forward, and we will not
entertain any non-conforming proposals.”

Mr. Dolan said the MTA has no intention of meeting with TransGas. Mr.Victor
said he remained confident that the MTA would see that his company’s offer
— which deals with electricity as much as it deals with real estate — was
unusual enough that it could not conform to the normal proposals solicited
by the MTA, but was a compelling offer nonetheless.

“On something of this import they might not like what we have to say but I
think they will want to meet with us. I could be wrong but I don’t think
so,” Mr.Victor said. “If they refuse to meet with us or refuse to discuss
it we will have a tough decision to make.”

Both the Jets and Madison Square Garden said they would re-submit their
proposals once they received the MTA’s guidelines. The deadline for bids is
March 21. The MTA, in its request for proposals, said a winning proposal
would come at the least economic and environmental risk to the MTA and at
the same time give the greatest economic and civic benefit to the city and
the surrounding community.

The bid for the site by TransGas was unusual because the company announced
no plans to develop the site. Unlike the New York Jets’ plan to build a New
York Sports and Convention Center featuring a 75,000-seat football stadium
that would also serve as the city’s crown jewel in its bid for the 2012
Olympics, and unlike Madison Square Garden’s recently announced proposal
for a high-density housing complex over the rail yards, TransGas sought to
use the property as “collateral” to secure a 20-year power contract the MTA
currently has with the New York Power Authority, Mr.Victor said.

Since 2001, TransGas has been vying unsuccessfully to build a power plant
on the Brooklyn waterfront,Mr.Victor said.

Mayor Bloomberg told reporters yesterday that TransGas declined an offer
from the city to build the power plant at another location.

A representative from an organization that has worked with the community in
Williamsburg that opposes TransGas’s plans for a power plant there said the
proposal Monday was merely an attempt to circumvent community review with a
backroom deal.

“It was a thinly veiled effort to leverage their Brooklyn power plant
proposal by spending 700 million for the rail yards,” an environmental
policy analyst with NYPIRG, Jason Babbie, said. “Now TransGas will have to
follow the same rules as any developer and go through the process.”

The proposal from TransGas was met yesterday with derision from the Jets
president,Jay Cross,who took the opportunity to announce upcoming
events,notably the annual Whitney M. Young Jr. Football Classic, for a
stadium that has yet to be approved, let alone built.

“We have descended from the sublime to the ridiculous,”Mr.Cross said of the
TransGas offer. The Jets executive said the domed stadium, where the team
hopes to begin play in 2009, will create thousands of jobs and millions of
dollars in revenue.

The RFP posted on the Internet late yesterday is 25 pages long.

Real-estate experts said the solicitation, by creating uniform guidelines
and conditions, would allow for bids to be easily compared and a market
value for the site to be reached.


Subject: Waiting for a better deal on a football stadium
Date: 2/23/2005 8:02:18 A.M. Eastern Standard Time
Sent from the Internet (Details)

Waiting for a better deal on a football stadium
Wednesday, February 23, 2005

CONSTRUCTION JOBS for minorities: That's what the Jets owners are promising
as an inducement for a few thousand more New Yorkers to support the stadium
planned for Manhattan's West Side.

The promise is very seductive, especially when you consider that last year
at this time a report by the Community Service Society came out saying
about half the black men in New York City are not employed.

Now the New York Jets organization, in an effort to build minority support
for their West Side stadium plan, has waved the prospect of jobs under the
noses of people starving for them. People who can ill afford the rent in
New York City should jump at the chance for a few months of steady work
building the stadium. Right?

Believe me, that would be a cause for rejoicing in a city where major
public and private projects go up with almost no black construction laborers.

If I thought the agreement would make any real difference in the long-term
employment of minorities in decent-paying jobs, I might be persuaded to
become a booster of the stadium plan, saying: "Go ahead. Let's all endure
more West Side Highway traffic snarls if it means construction jobs at the
stadium." But I'd have to read the fine print first.

The stadium, which in the Bloomberg administration's scheme of things is
the lynchpin for getting the Olympic Committee to stage the summer games
here in 2012 - no serious alternative site has ever been offered - has been
touted as a commercial boon to the whole region including the working
class, construction workers, service personnel in the hospitality
industries, and others.

Jets President Jay Cross went to great lengths to demonstrate the
organization's willingness to employ minority contractors and professionals
in the stadium plan. Last week he and Mayor Bloomberg, along with a several
black political leaders from Queens, got together on the Intrepid and
signed an agreement that they estimate could steer $100 million in
construction contracts to minorities.

But how can you think of this agreement as anything but just another ploy
to get approval for a bad project with questionable benefits to anyone-
including minorities?

Alas, after the stadium were to go up, I would be disappointed if the only
minority private-sector jobs there were the same old Senegalese vendors
with T-shirts and "I Love New York" gewgaws and tchotchkes.

Among the many losers in the deal would be the same working-class mass
transit riders facing more fare increases. They would be the ones
ultimately subsidizing the sale. As the only ones in line for the 13-acre
site over the West Side rail yards, the Jets offered $100 million for a
site appraised at $923 million. The MTA was willing to let the valuable air
rights go at a fraction of the value, until last week when the competing
offer of $600 million from Cablevision's owners, the Dolans, forced the
potential sale of the site to be thrown open to other bidders.

Some of the biggest supporters of the West Side site have been those Queens
political leaders, who would be better off pushing a venue in their own

Whoever gets the green light to build over the West Side rail yards -
whether it be the Jets, the Dolans or another commercial developer - needs
to give the city something that is not traffic-intensive, that gives the
MTA good money to hold back fare increases and that includes zoning for
affordable housing units.

In the final analysis, the benefits to minorities would be a few short-term
construction jobs offered with the intent of selling a bad idea to a few
more New Yorkers.

The approach reminds me of the politicians who troll the inner city for
votes and then disappear until the next election.

In the meantime, Cablevision is seen as a spoiler. But I say thanks to the
Dolans for forcing their way onto the scene.

Like a jackhammer, they broke up the too-cozy solidarity and forced the
project open to bid. And that's good for everybody - except the Jets.

Record Columnist Lawrence Aaron can be contacted at
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