Friday, May 13, 2005

Huge Projects Look to Silver for Support

May 13, 2005

Huge Projects Look to Silver for Support

NY Times

Never have the fates of the city's two biggest developments - a proposed
$2.2 billion football stadium on the West Side and the downtown rebuilding
effort - been more intertwined than they are today.

City and state officials are struggling to counter perceptions that plans
to reconstruct the World Trade Center site are in disarray. The city is
considering a package of tax breaks and cash incentives to lure companies
to empty space in Lower Manhattan. And Gov. George E. Pataki said in a
speech yesterday that he would work with Mayor Michael R. Bloomberg and
Assembly Speaker Sheldon Silver on a new incentive program to lure
out-of-state companies downtown.

But according to civic leaders, downtown landlords and political officials,
the city's downtown effort has as much to do with the proposed 75,000-seat
stadium for the Jets, and possibly the Olympics, as it does with
rejuvenating the financial district.

The linchpin of both developments is Mr. Silver, an outspoken advocate for
his downtown district who holds a pivotal vote on the stadium when it faces
its last political hurdle, possibly as early as Wednesday. Satisfying his
concerns in Lower Manhattan, according to various officials, could soften
his resistance to the stadium, the Bloomberg administration's highest
priority, in the coming vote.

For at least a month, talks have been held between Deputy Mayor Daniel L.
Doctoroff and Mr. Silver over a package of tax breaks and rent subsidies to
entice companies to Lower Manhattan, which continues to suffer from
relatively high vacancy rates and the possible loss of a financial
stalwart, Goldman Sachs.

According to people familiar with the talks at City Hall, the two sides are
at odds over some elements of the incentive package. Mr. Silver said he
might issue his own proposal next week if the city did not move more quickly.

Mr. Silver insisted that there was no linkage between commercial incentives
for Lower Manhattan and his vote on the stadium, which, he said, has "got
to stand on its own."

He was furious last month when Goldman pulled back from plans to build a $2
billion headquarters downtown and began to look at Midtown locations,
blaming City Hall for not attending to its concerns.

"They're too focused on the West Side and they're losing sight of what's
important downtown," Mr. Silver said of the Bloomberg and Pataki
administrations at the time. "The revitalization of downtown should be
their No. 1 priority."

City officials say they hope that they can quickly address Mr. Silver's
longstanding issues downtown and get his vote for the stadium project at
the Wednesday meeting of the Public Authorities Control Board, which must
approve the project before the Legislature can appropriate a $300 million
subsidy for it. The governor and the Senate majority leader, Joseph L.
Bruno, control the two other votes on the board, whose decisions must be

The mayor has said that the city's bid for the 2012 Olympic Games has no
chance of success unless the board approves the project before the
International Olympic Committee meets on July 6 to pick the host.

But both Mr. Silver and Mr. Bruno have said they see no reason to make a
decision on the stadium before July. More recently, Mr. Silver said the
board should not review the matter while there were outstanding legal
challenges, which might not be resolved until June 2. People on both sides
of the issue expect the stadium decision to be postponed.

At this point, Mr. Silver said, "the stadium does not make sense to me." He
has raised questions about traffic congestion in the surrounding area on
game days and has expressed concern that commercial development on the West
Side could hurt rebuilding Lower Manhattan.

With time running out on the stadium, Mr. Doctoroff, the architect of the
city's Olympic bid, has intensified discussions with Mr. Silver about a
downtown incentive program. Mr. Silver said he favored the elimination of
the commercial rent tax and a sales tax abatement for companies that move

Mr. Silver said he also wanted a cash subsidy for new commercial tenants
based on the square footage they rented. It would resemble a now-expired
federal program instituted after Sept. 11, 2001, that offered residential
tenants cash to sign new leases downtown. According to several executives
briefed by city officials, the Bloomberg administration is reluctant to put
up as much money as Mr. Silver wants.

Jennifer Falk, a spokeswoman for Mr. Doctoroff, said the talks were
preliminary and were focused on the tools the city had available to make
downtown more attractive.

But even as the debate between city officials and Mr. Silver continues,
some real estate brokers and civic leaders say that the problems downtown
have less to do with money and tax breaks than with transportation,
security and the inconvenience of working next to the trade center area.

Rents are 35 percent cheaper downtown than uptown, brokers said. Despite
getting $1 billion in tax-exempt Liberty Bonds, Goldman Sachs stepped back
from plans to build a $2 billion headquarters downtown.

"It's not about money," said Bettina Damiani, project director of Good Jobs
New York, an advocacy group. "Companies don't base their location decisions
on tax breaks and giveaways. Companies are concerned about safety,
transportation and getting employees to and from work. Solve that and Lower
Manhattan will bounce back."

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