Thursday, September 21, 2006

Moynihan Station Being Derailed - 4 articles PLUS Hevesi's letter

Subject: Moynihan Station Being Derailed - 4 articles PLUS Hevesi's letter
From: "TenantNet"
Date: Thu, 21 Sep 2006 14:42:26 -0400 (EDT)

Four articles, plus Hevesi's letter at the bottom

September 21, 2006

-- ALBANY - Gov. Pataki yesterday abruptly delayed a state board's vote on the proposed $900 million Moynihan Station project for at least a week after new objections were raised by state Comptroller Alan Hevesi. Hevesi's objections led Assembly Speaker Sheldon Silver (D-Manhattan) to threaten to block the project if it was brought to a vote before the Public Authorities Control Board. Hevesi, a Democrat, in a letter to Pataki, said, "At this time, I do not believe that members of the PACB have been provided with the necessary information to determine whether 'there are commitments of funds sufficient to finance the acquisition and construction' of the project," as required by state law.

No rail progress on Farley plan


The plan to convert the landmark James A. Farley General Post Office into the Daniel Moynihan Train Station stalled yet again yesterday.

A final vote on the nearly $900 million project was pulled from the agenda of the Public Authorities Control Board - this time by Gov. Pataki, who's pushing the plan - amid lingering questions about financing and other details.

The questions were flagged for the second straight month by State Controller Alan Hevesi, after his office was briefed by the Moynihan Station Development Corp., a subsidiary of the Empire State Development Corp.

Hevesi told Pataki, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno, who control the public authorities board, that it was too soon to vote because "the information provided as a result of those briefings has not alleviated my concerns and, in fact, has raised additional questions."
He told Moynihan Station Development Corp. President Robin Stout that "questions remain about the impact that the possible inclusion of Madison Square Garden could have on the state's future financial obligations."

Steven Roth and Stephen Ross, the developers chosen for the Farley overhaul, also want to tack a new Garden on the Ninth Ave. end of the postal complex and build three towers and a new Penn Station where the Garden now stands. So far, however, only the Farley conversion has been submitted for PACB approval.As Silver, who supports the Farley redevelopment, put it, "I think the plan being presented isn't the plan that everyone says is the plan."

Originally published on September 21, 2006

September 21, 2006

Pataki Again Dodges a Vote on Moynihan Station Plans
NY Times

Locked in a standoff with the State Assembly over financing for a $900 million plan to convert the city's main post office to a grand transit hub, the Pataki administration took the proposal off the table again yesterday rather than risk a vote against it.

State officials have been pushing to get the long-awaited project, called Moynihan Station, approved by the Public Authorities Control Board so that construction can begin before Gov. George E. Pataki leaves office in January. But a vote was delayed last month when Sheldon Silver, the Assembly speaker, who controls the state board together with Governor Pataki and Joseph L. Bruno, the Senate majority leader, raised questions about the project's financing.

After delaying the start of the control board meeting for more than two hours yesterday, the Pataki administration pulled Moynihan Station off the board's agenda. Charles A. Gargano, the state's top economic development official, told Assembly leaders in recent days that any further delay could jeopardize or possibly kill the project, which proponents say would be a gateway to New York City and a necessary expansion of the nation's busiest transit center. State officials insist that financing for Moynihan Station has long been in place.

But Alan G. Hevesi, the state comptroller, issued a letter Tuesday night saying he did not believe that state officials had provided the necessary information to determine whether "there are commitments of funds sufficient to finance the acquisition and construction" of Moynihan Station. He then raised questions about the state's deal with the project's developers, Stephen M. Ross of the Related Companies and Steven Roth of Vornado Realty Trust. Mr. Hevesi said the state had sold one million square feet of development rights to the developers without having obtained an independent appraisal.

At yesterday's meeting, state officials initially sought to force a vote anyway, but Mr. Hevesi and Mr. Silver refused to budge.

"We have provided answers to those questions, and continue to be available to answer any questions at any time, as we have for the past several months," Mr. Gargano said yesterday. "We are confident that the answers provided to the comptroller will resolve any remaining concerns, and that the P.A.C.B. will vote to move forward on the Moynihan Station project in the coming days."But it is unclear whether the gap between the two sides can quickly be bridged

"Instead of answering our questions," Mr. Silver said, "we get, `You're going to kill the project.' ""This has to do with the fact that the project was not properly presented to us," Mr. Silver added. " If they'd go forward and try to answer the questions we could try and move this project forward."

All sides maintain that they support the Moynihan Station project, which was first proposed by Senator Daniel Patrick Moynihan 13 years ago. State officials obtained most of the funds for the project in 2001, and it has been wending its way through the public approval process for two years.

But the issue has become mired in politics and complicated by a nascent $7 billion proposal by the developers, Mr. Roth and Mr. Ross, to modernize and expand Pennsylvania Station to both sides of Eighth Avenue between 31st and 33rd Streets, by moving Madison Square Garden a block west to the back of the post office building. The larger proposal, which has not been unveiled publicly, is referred to as Plan B.

Democrats have complained recently that the Pataki administration is trying to rush through projects and appointments in a last-minute bid to establish a legacy without scrutiny from legislators.

"These guys are trying to close out every major real estate deal in the state before they leave office," said Assemblyman Richard L. Brodsky, a Westchester Democrat. "They want approval of a bunch of half-baked deals. It's nonsense."

Mr. Silver is also asking why the control board is being asked to approve the smaller Moynihan Station project when the larger proposal is what the developers want to build. "They're saying, `Approve Plan A and we'll give you Plan B' later," Mr. Silver said of the Pataki administration.

"We can change it. I'm suggesting that the thing presented to me personally, and I assume to Senator Bruno, is Plan B. I'm suggesting, put forth Plan B with a financial plan and, subject to evaluation, I think we can be very supportive."

But Mr. Gargano said the state had not yet presented the larger proposal, whose fate is still uncertain. He said it would take 18 months to get approval and require $1 billion in public funds for the renovation of Penn Station.

"We're only asking for approval of the Moynihan Station project and development within the post office," Mr. Gargano said. "No other plan has been presented."

The leading candidate to succeed Mr. Pataki, the Democrat Eliot Spitzer, the attorney general, has said that Mr. Hevesi has raised legitimate questions about the financial viability of the current proposal, although he insists that he supports both plans for Moynihan Station.

Christine Anderson, a spokeswoman for Mr. Spitzer, said yesterday, "If elected, Eliot will immediately seek to resolve these issues so that the Moynihan project can move forward."

September 21, 2006 Edition > Section: New York >

Pataki's Hopes For Moynihan Being Derailed
BY DAVID LOMBINO - Staff Reporter of the Sun
September 21, 2006

Governor Pataki's hopes of breaking ground on Moynihan Station before he leaves office are being derailed by Albany Democrats.

The $900 million project to remake the Farley Post Office building on Eighth Avenue between 31st and 33rd streets into a Grand Central-like transit hub took another blow yesterday when the governor pulled it from the agenda of the Public Authorities Control Board in the final moments before a vote, a signal that he was not confident it would pass.

Although the project has been in the works for about eight years, yesterday state comptroller Alan Hevesi and the speaker of the Assembly, Sheldon Silver, said there are several outstanding financial questions and information gaps in Mr. Pataki's plan. As a member of the Public Authorities Control Board, Mr. Silver must give his approval for the project to move forward.

Mr. Silver said yesterday that his objection is related to the project details and not the concept.

"I am hopeful that in the coming weeks the administration will acknowledge and address the many areas of concern expressed by the Assembly and the comptroller and put together a plan that is sound, thorough and deserving of support," Mr. Silver said in a statement.

Last month, Mr. Hevesi sent the state's development agency a list of concerns about the project, which led to a postponement of an August vote by the PACB. Ahead of yesterday's scheduled vote, Mr. Hevesi publicized another letter that said the state's recent explanations raised more questions than they answered.

Among the questions raised in Mr. Hevesi's letter are the operational costs of the completed facility, the conveyance of the development rights over the Farley Post Office building, outstanding federal approvals, and the potential for the developer to change the design after final approval.

A statement yesterday from the state's leading development official, Charles Gargano, said he expects the project to be approved in the "coming days." Mr. Gargano appeared to take aim at Mr. Hevesi for waiting until the last moment to publicize his concerns.

"We have provided answers to those questions (text attached), and continue to be available to answer any questions at any time, as we have for the past several months," he said.

The Moynihan Station project seemed to be sailing towards approval until the state's selected developers, the Related Companies and Vornado Realty Trust, introduced a more ambitious plan to move Madison Square Garden from its current location over Penn Station into the west side of the Farley complex.

The move would allow the existing Penn Station, the busiest transit hub in the United States, to be expanded and opened up to daylight, a superior option, according to several elected officials and civic organizations.

The bigger plan created a divide in the development community between those who want to move ahead with Moynihan Station as soon as possible, and those who want to wait for a more comprehensive plan that includes the Garden move.

Development sources say that the final approval of Moynihan Station is also caught up in partisan politics. The Pataki administration has been candid about its desire to complete the project forward before the governor leaves office at the end of the year. Democrats, some sources say, could be stalling with the hope that the front-runner to be the next governor, Attorney General Eliot Spitzer, a Democrat, will soon take control over the plan.

Assemblyman Richard Brodsky, a Democrat and an outspoken critic of the Pataki administration's development team, said that the latest plan "isn't close" to final approval. He compared Moynihan Station to the state's plan to expand the Javits Convention Center. Both projects, he said, have suffered from neglect because of Mr. Pataki's desire for groundbreakings before leaving office in January."

In their attempt to jam these projects through before the end of the year, they are endangering them," Mr. Brodsky said. "They came up with half-baked proposal for a good idea, and they expect of people to go on board."

A spokesman for the Regional Plan Association, a planning group that has advocated for a Moynihan Station, Jeremy Soffin, said that yesterday's nonvote was likely driven by legitimate questions about the project, and not a sign of dwindling support or political jockeying. He said that several important aspects of the project plan, as put together by the Pataki administration, were not resolved."I don't know why it hasn't been dealt with already," Mr. Soffin said.

The president of the Municipal Art Society, Kent Barwick, said that the real choice facing elected officials was whether to wait a year or more for a wider plan that would include the Garden move, or to move ahead with the Moynihan Station part of the plan, which, he said, was bound to be part of the larger plan.

"What I don't know is what level of documentation that the PACB typically requires in a project that it approves," Mr. Barwick said. "Is this good government diligence, or it there something else going on here?"

September 21, 2006 Edition > Section: New York >

September 19, 2006

Mr. Robin Stout
Moynihan Station Development Corporation
633 Third Avenue, 36th Floor
New York, NY 10017

Dear Mr. Stout:

On August 17, 2006, I sent a letter to the Public Authorities Control Board (PACB) raising a number of questions about the Moynihan Station project as described in the Empire State Development Corporation's General Project Plan (GPP) that was submitted to my office.

On August 28th, I received a letter from the Moynihan Station Development Corporation that purported to respond to my questions; however, many answers were not directly responsive and in some cases raised additional questions. In addition, in most instances supporting documentation was not provided to substantiate or illuminate the answers.

Subsequent briefings were held on September 14th and 19th, ostensibly to address the issues raised by me and members of the PACB. Unfortunately, the information provided as a result of those briefings has not alleviated my concerns. Consequently, my staff has many substantive questions and I continue to have fundamental concerns about the proposed project, including:

o As part of this project, 1 million sq. ft. of development rights over the Farley Complex are being sold to a private developer to be used for a separate development project adjacent to Moynihan Station. My staff was told that the sale price of this asset was the result of negotiations, not an independent appraisal and/or an open bid.

o ESDC has not disclosed its plans for an additional 1 million sq. ft. of development rights over the Farley Complex, nor has it committed to base any subsequent sale of this asset on an independent appraisal or a competitive bidding process in order to ensure fair market value.

o There are no assurances that the ultimate project will provide the public benefits currently being promised to the PACB. Rather than receiving a commitment for the developer to design and construct the project as approved by the PACB, the developer has been "allowed to propose design modifications" to the project to offset rising construction costs and to stay within the original cost estimate developed in 2004. It is unclear what role, if any, the PACB will play in approving future design modifications.

o Many elements of the project, including the Loan Concept, City approval of the proposed PILOTS for Moynihan Station and the adjacent development project, the attainment of federal Historic Preservation tax credits (which are considered a "critical" component of the project), and leases with New Jersey Transit and the Port Authority are still in draft form and have not been executed.

o The United States Postal Service, the Federal Railroad Administration, and the Federal Highway Administration, each of which must approve of the sale of the Farley Complex in order for the project to move forward, have not completed their reviews.o

The State's obligations for ongoing maintenance and operational costs associated with the common areas within the station have not yet been determined. While ESDC staff has assured my staff that the State's obligations for maintenance and operational costs would be supported by project revenues, documents have not been presented to support this claim.o

ESDC "expects," but does not guarantee, that "operational surpluses will be dedicated to Moynihan expenses and improvements."

In addition to these issues, I am disturbed that several key documents were not submitted to my office along with the GPP or in response to my letter to the PACB. Only in the course of subsequent briefings and as the date of the PACB meeting approached, did ESDC begin to turn over these documents. While we are still reviewing documents received as recently as yesterday, my staff has found that many of the documents are in draft form (some dating back as far as 2003), and thus are likely to be changed. In addition, these documents are missing pertinent information, including entire sections needed to fully evaluate the project.

I am also troubled that the documents made available by ESDC were given to my office and other members of the PACB "contingent upon the understanding that they are not public and should be kept confidential." All development projects benefit from a thorough and open debate in which the public is provided with all available information.Confidentiality should be invoked only when proprietary information or details which may influence markets is at stake.

Moreover, questions remain about the impact that the possible inclusion of Madison Square Garden could have on the State's future financial obligations, including costs associated with modernizing and renovating Penn Station, and the coordination of efforts to build two additional transit hubs in proximity to Moynihan Station (a renovated Penn Station and the terminus of New Jersey Transit's Access to the Regional Core project at 34th Street and 7th Avenue).

Moynihan Station is an exciting project with many potential public benefits; however, at this time I do not believe that the members of PACB have been provided with the necessary information to determine whether "there are commitments of funds sufficient to finance the acquisition and construction" of the project (as required by Section 50 of the NYS Public Authorities Law). While we share a common goal in ensuring that the transformation of the Farley Complex is a fitting testament to the actual vision of Senator Daniel Patrick Moynihan, for the reasons outlined above, I believe that it is premature for the PACB to consider a vote on this project and have informed the members of my concerns.

Alan G. Hevesi

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