In This Series:

• Netting the Nets by Marty Markowitz

• Cheerleaders for Real Estate? by Tom Angotti

Recently New York developer Bruce Ratner announced plans to build a 20,000 seat basketball stadium and 17 skyscrapers in Brooklyn's Prospect Heights. This project depends on Ratner placing the winning bid for the New Jersey Nets. However, it also depends on the condemnation of over 1,000 homes and businesses in Prospect Heights and a risky financing system that is full of false hope.

While bringing the Nets to Brooklyn may sound like an intriguing idea, it has troubling fiscal, social, and economic implications for New York City as a whole.

THE MYTH OF JOBS, RECREATION, AND HOUSING

Typically, backers of a new stadium promise it will bring jobs, jobs and more, jobs.

Supporters of this stadium project have been hypnotized by similar claims. The reality is that Yankee stadium at 57,000 seats, which is double the size of the proposed stadium in Brooklyn, only offers 65 full-time positions. Any claim that this proposed stadium would provide for significant and permanent employment is a pipe dream.

Other supporters argue that local schools and other not-for-profit organizations will use the proposed stadium for their recreational events. I respond that there are a number of proposed capital projects to renovate armories and other buildings in Brooklyn into recreational facilities. These facilities, however, do not involve the condemnation of homes and or divert public dollars for private purposes.

The developer also claims that the 17 skyscrapers in his second phase will create 4,500 to 5,500 new apartments. That claim is the biggest joke of all.

Organizations involved with affordable housing do not build high-rise apartment buildings anymore. They realize that people want housing on a human scale where children can play in a yard and neighbors can look out for each other. Furthermore, the total cost for the purchase and construction of this project will in all likelihood make housing so costly, that most working families will not be in a position to afford to live there.

DISPLACING PEOPLE, CREATING TRAFFIC

The developer also plans to use eminent domain - the power to take private property for public use - to evict entire families and businesses for his project.

Approximately 1,000 men, women and children would be displaced if the stadium plans go through (we know the number because we counted - door to door). In addition to families being removed, blocks may be closed to accommodate the stadium separating Fort Greene and Clinton Hill from the Prospect Heights community.

The junction of Flatbush and Atlantic avenues is currently congested with traffic, and adding a stadium and 17 skyscrapers would only serve to worsen traffic conditions in a dense residential community. The massive influx of automobile traffic would tie up a main artery and create the biggest parking lot in the heart of downtown Brooklyn.

Imagine 23,000 more cars - that's nearly 1,000 more an hour - and many more children with asthma.

FINANCING THE FUTURE AWAY

The biggest gamble in all of this is the method of financing the stadium.

Recently, Ratner claimed that all he wanted in exchange for this project is for New York City to kick back some of the sales and income taxes to pay off loans that he had to borrow for the project. It was reported that the total bill for the stadium and surrounding commercial, office and residential development is being estimated at $2.5 billion (not including the $300 million that he would pay for the Nets).

This project will rely upon the use of Tax Increment Financing (TIF). Tax Increment Financing is one of the fastest growing development subsidies in the country, and it diverts future property, sales and income taxes in a designated district until a developer can pay off the costs of the project. It is just another name for corporate welfare.

Bruce Ratner's past is prologue to his future. His Atlantic Center Mall, which is directly across the street from the proposed stadium, is shrouded in a cloud of controversy. It has not resulted in any appreciable benefits to the community and has a 23-year property tax abatement with a disastrous private commercial rental history.

Not only will this be bad for Brooklyn, but for all of New York.

An Independent Budget Office report on the public financing of professional stadiums concluded that dedicating taxes for huge construction projects like this ties up a significant portion of the city's revenues, and often competes with funding for other city needs like schools, police, housing, playgrounds, and sanitation.

I was elected to protect and preserve working families, to create more affordable housing and employment opportunities, and to devise economic plans that involve and respect the character of local communities. I support development of this site, but development that make sense. We need projects that will generate revenue for the area and leave the Prospect Heights community intact.

We do not need to look like an imitation of Manhattan. We stand uniquely and proudly as Brooklynites.

Letitia James represents the district 35 neighborhoods of Prospect Heights, Fort Greene, Clinton Hill and North Crown Heights in the New York City Council.

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In This Series:

• Netting the Nets by Marty Markowitz
• Cheerleaders for Real Estate? by Tom Angotti

In a fascinating new book, Tunneling to the Future, historian Peter Derrick tells the story of the creation of the New York City subway system between 1902 and 1920. The first line, little more than a trip from City Hall to Grand Central, took six years to build, between 1902 and 1908.

But the next stage, the 114 miles of the so-called Dual System (the IRT and the BMT systems), was more than 80 percent completed in just seven years, from 1914 to the end of 1920. The largest public works project built in this country at the time, it cost the equivalent of about $25 billion (in 1999 dollars), and gave New York City more miles of rail rapid transit than all the other cities of the world combined.

There was, to be sure, time spent before actual construction on bitter disputes over finances. But even taking that into account, the Dual System was created in about a decade.

Today, with luck, far smaller projects will take at least four times as long. The 63rd Street subway and Long Island Railroad tunnel are still not finished, 33 years after the plan to build it was published, and it is not clear that the LIRR part of the tunnel will ever be finished.

WHY THINGS ARE SLOWER NOWADAYS

In the best of circumstances, we today could not match the Dual System in speed of completion, because of environmental concerns, concerns about worker safety, and the demise of deferential politics (to put it mildly). But those factors do not fully explain our inability to move ahead with big projects.

The biggest difference is this: In the past, the big projects that went ahead seemed so urgently necessary that there was little real opposition to the idea of the project itself, only to specifics of management, design and who might win financially. The 1913 plan for the Dual System reflected a desperate need to reduce the hideous overcrowding in the city -- the worst in the world at that time -- by providing rapid transit services to the parts of the city then lightly populated.

Similarly, the completion of three great bridges across the East River in a very few years reflected the need to unify the city physically as well as politically after 1898.

The rapid building of limited access highways that began in the 1920s came about because, suddenly, there was mass ownership of motor vehicles, and no streets for them; there never had been any serious road building within cities in New York or anywhere else. For example, the late unlamented Miller Highway (the elevated West Side highway) was built to get auto traffic off the streets serving the North River piers, because the traffic had been strangling the port business. There was no real opposition to highway building in the city until after World War II when Robert Moses began building roads that caused massive displacement. (It should be noted that this was often done because it was the cheap way to go. Nearly all the Moses roads were built at low standards compared to the limited access roads then being built in Los Angeles and Chicago, the only other places to do so within cities on a large scale before 1960).

New Yorkers viewed any of today's projects with the same urgency, we would find a way to do them. For example, about 15 years ago, New Yorkers feared that the Williamsburg Bridge would have to be replaced completely because of its physical deterioration. If that had been necessary, the financing surely would have materialized. It would not have mattered that the estimated cost was put at more than $15 billion. The few opponents would have been dismissed as crackpots.

But there is likely to be much more effective opposition when only relatively few people see proposed large projects as necessary and urgent.

Take the case of the Third Avenue subway. Those who push for it say it will relieve overcrowding on the Upper East Side (when that can be done far more cheaply and quickly by more train service on the existing Lexington Avenue line). They say it will get rid of the "long walks" to the Lexington line stations (walks that are shorter than those done daily by 90 percent of Brooklyn and Queens subway riders). Why should we expect it to be quickly approved, financed and built?

Then there is the skepticism and opposition generated by the fact that ALL projects have enormous over-runs in cost and date of completion, especially transit projects.

WHAT CAN BE DONE

Are there no solutions, aside from abandoning all but a very few projects that almost everyone agrees are desperately needed?

Some possibilities:

1. Devise institutional arrangements that truly and convincingly contain money and time costs from the get-go. I can imagine some such arrangements, but like almost everything sensible with regard to transportation policy, there are extraordinary political difficulties in the way.

2. The seemingly impossible political obstacles logically suggest private financing and management as the standard mode of operation in urban transportation, something that is increasingly the conclusion of transportation economists, such as Clifford Winstonof The Brookings Institution.

That is not going to happen soon in the People's Republic of New York (which socialized the Long Island Lighting Company just as the rest of the country had finished deregulating most utility and intercity transportation services almost overnight).

But why not think seriously about projects that are independent of overall networks, at least at the outset (as the elevated lines in Manhattan and Brooklyn were before 1900)?

The most cogent examples are the serious proposals for light-rail lines in Manhattan:

• 42nd Street (there will be no 42nd Street light-rail for at least 20 more years, if it remains a public-sector project);
• Second Avenue (or a First and Second Avenue pairing), as a substitute for the pie-in-the-sky Second Avenue subway;
• The Village Crosstown light-rail proposal.

In each of these cases, all that government need do is to grant the franchises, along the lines of the public utilities laws (but without price and service regulation) and agree to closing part or all of the street to motor vehicle traffic.

This obviously should have been done for the JFK to Manhattan rail link ages ago. (Instead we are to get an expensive rail link of very limited utility). BAA Ltd, the private owner and operator of the London airports built and operates a splendid rail connection (Heathrow to Paddington) -- high speed and frequent service, built with its own funds over a very short period. Of course, they used existing rail lines in part. But surprise, surprise, we have existing rail lines that could have been used, but alas owned but not used by the Metropolitan Transit Authority, for low-level political reasons.

3.To the extent that funds generated by government are necessary (and there are sensible projects for which this is the case), we can go back to an old idea, one never considered in recent years, but propounded from the mid-19th century. Indeed, it actually was the main source of finance for the New York City subway system.

That is the land value tax. While no one stated explicitly that the land value tax was the main financing for the New York City subways, it really was: the New York City bonds that were issued were general obligations of the city at a time when the city used only one tax, the property tax, and a very large part of the huge increase in the property tax base from 1900 or so until the Great Depression really was the increase in the value of the underlying land. This should be obvious for the outer boroughs, where the great majority of the structures built in those years were of inexpensive light construction, but this applies to a lot of northern Manhattan as well. Major transportation improvements serving already built-up areas (New York City is not empty like the High Desert in southern California) must increase land values, not building values.

Surprise, surprise, owners of interests in land are hostile to this notion. So they are likely to be generous supporters of what we try to do in financing transportation improvements: tax those who gain little or nothing economically from the projects, like ordinary consumers and workers. To be sure, their lives are made better. But the taxes we use are really akin to taxing welfare recipients to finance welfare.

Sometimes, in the world of New York politics, it is possible actually to complete, within a reasonable time, useful modest-sized projects that only a small fraction of voters see as important. But that is possible only if few voters see such ventures as bad ideas.

It takes heavy lifting and real political risk--as it did when the Dual System of subways was built--when those conditions are not met. But the last time there was really heavy lifting in public affairs in New York was 25 years ago, when there was a desperate fiscal crisis. That is not something to be wished for, nor it is likely to happen. So, settling for small things--that make sense, one hopes--seems the best we can expect.

Dick Netzer is Professor Emeritus of Economics and Public Administration at the Robert F. Wagner Graduate School of Public Service of New York University

Save The City From Kaput

New Yorkers rarely think about the hidden systems that keep the city running, until something breaks down. But those who monitor these systems say it is not just events like September 11 or the 2003 blackout that pose a threat to the city. The biggest threat may be the everyday wear-and-tear on the city's systems, and fixing New York City's underground infrastructure takes foresight, planning and billions of dollars.

Breakdown!

• Make an online contribution to Gotham Gazette.

ARE ALL SYSTEMS GO?

Overview Articles

Keeping The City Running
(10/06/03) Will a system of rusting pipes, crumbling cables, shaky subways and rocky roads lead to an apocalyptic metropolis?

The Capital Budget
(11/17/03) When the mayor recently announced the most ambitious school construction plan in the city's history, he brought attention, at least briefly, to the oft-ignored capital budget, which funds major construction and repair projects critical to New York's future -- or at least is supposed to.

System By System

Electricity
(12/08/03) You can make all the electricity you want, but transmission is key, as much of the Northeast, including New York City, learned when it suffered through one of the worst blackouts in history on August 14.

Telecommunications - The 21st Century Office
(11/10/03) New York City is falling behind in providing the high-tech services that businesses need.

Natural Gas
(10/11/03) Once viewed as a pesky nuisance, natural gas has become more and more in demand - and more and more expensive. Sam Williams follows the journey that gas makes from prehistoric swamp to the grills, stoves, furnaces, clothing dryers and power plants of New York City.

Steam
(11/10/03) New York City remains the world's largest supplier of what some call a great, underappreciated asset: steam.

The Sewer System
(10/20/03) New York's sewer system began 150 years ago -- and some of the pipes have never been replaced. A look at the challenges: out-of-date equipment, harmful chemicals, constant spills, and some persistently weird beliefs about what's down there.

Water
(12/08/03) New York City's water supply system has been called a marvel of engineering -- the eighth wonder of the world. But leaks, pollution, and years of delay in building a new water tunnel threaten the city's water supply.

Garbage
(12/08/03) For years, city officials have wrestled with what to do with all of New York's trash.

 

Find your Breakdown has moved to a new location. Click the following link: Breakdown (iFrame version) Standalone, no presentation

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This is a quiz especially for Gotham Gazette readers who want to challenge their own New York savvy. They are not the exact same questions as those offered in the professional licensing examination for tour guides, but they tap into the same vast treasure trove of New York City legends and lore. (For more about the actual test for tour guides, read Testing the Tour Guides)

Simply click on the circle next to the answer you think is correct, and an answer will appear in the box below. Keep trying until you get the correct answer.

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Three articles in this series:
• Testing The Tour Guides
• The Tour Guides Complain
• Test Your NYC Knowledge

 

Which subway system has more riders -- New York's or Mexico City's? What mayor rode mass transit to his inauguration? And how loud are those car alarms? Test your knowledge of New York City transportation.

Simply click on the circle next to the answer you think is correct, and an answer will appear in the box below. Keep trying until you get the correct answer. To learn more about the subject, click on the Gotham Gazette story after each question.

 

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RELATED ARTICLES • New York's Fight for Transportation Dollars in Congress • City Council Transportation Legislation • A Brief History of New York Transportation • An Appalachian Trail Through The Heart Of NYC

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This is a quiz especially for Gotham Gazette readers who want to challenge their own New York savvy. They are not the exact same questions as those offered in the professional licensing examination for tour guides, but they tap into the same vast treasure trove of New York City legends and lore. (For more about the actual test for tour guides, read Testing the Tour Guides)

Simply click on the circle next to the answer you think is correct, and an answer will appear in the box below. Keep trying until you get the correct answer.

 

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Three articles in this series:
Testing The Tour Guides
The Tour Guides Complain
Test Your NYC Knowledge

 

The Budget Game is no longer at this location. You will be automatically redirected to the correct page. If you are not redirected, click on the following url:
http://www.gothamgazette.com/budgetgame/

 

Also in the series:

A System in Need of Reform
Patronage, payoffs, complexity, and appointments vs. elections in the New York judiciary.

The Courts of New York Explained
An overview by Supreme Court Justice Emily Jane Goodman -- first published here three years ago, but nothing much has changed.