|The Manhattan Institutes|
Center for Rethinking Development
Ideas that shape the citys planning, housing, and development
What is a neighborhood to do when a government agency holds a major property vacant and deteriorating for years, promising rehabilitation some time in the vague future?
It would be hard to exaggerate the shock of coming unawares upon the Metropolitan Transportation Authority's thirteen-story Board of Transportation Building at 370 Jay Street, standing derelict in the midst of downtown Brooklyn's revival. Despite the pleas of Brooklyn politicians, including then-Councilmember Ken Fisher, the MTA began to empty 370 Jay of its 1,800 employees in 2001and left it virtually unoccupied and in a state of neglect during a period when so many other buildings and neighborhoods were being rehabilitated and revived. Joe Chan, president of the Downtown Brooklyn Partnership, summarizes, "The MTA has let the building cast a constant shadow of blight on an increasingly revitalized downtown." Michael Gold, general counsel of family-owned Sid's Hardware, directly across the street at 345 Jay, warns, "The disrepair of this building is jeopardizing the further development of downtown Brooklyn." Michael Nill, head of the Brooklyn Friends School located in an elegant building on Pearl Street, at 370 Jay's back, says, "Inside our own buildings all is joyful and celebratory. But what a contrast with outside and the ugliness of the MTA property." Or, as Brooklyn Borough President Marty Markowitz said in late October to The Brooklyn Paper, "For nearly five years, this building has been vacant, an empty shell amid the teeming life of the neighborhood and devoid of people, the area around the building has become a magnet for trash. If people's initial taste of Brooklyn is a smelly subway stop and a dark, empty, trash-strewn plaza, it can't help but color their impression." Indeed, Markowitz has been officially complaining about the site for most of his borough presidency. In 2002 he extracted a promise from then-Transit Authority President Lawrence Reuter to renovate 370 Jay Street and the underlying subway station together. Neither has been done.
A BLIGHT GROWS IN BROOKLYN
The MTA, which has possession of 370 Jay Street under its master lease with the city, has kept it nearly vacant for several years, despite interest from respectable groups like the Downtown Brooklyn Partnership in using it. In the meantime, the agency signed a long-term, extraordinarily expensive $1.6 billion lease for lavish headquarters for itself and New York City Transit at 2 Broadway, in Lower Manhattan. After hundreds of millions of dollars in cost overruns during renovation, the MTA decided to keep its own headquarters on Madison Avenue in Midtown. Meanwhile, largely emptied of its New York City Transit staff, 370 Jay languished along with its neighborhooda sorry tale of waste and profligacy.
The MTA is again promising to spend $150 million on renovating 370 Jay, perhaps reoccupying the building by 2016. But its own 2008-2013 proposed capital program for 370 Jay is deeply inadequate. It notes that 418,000 square feet are vacant today and that under Phase I, which was supposed to have already begun but hasn't, it would renovate and open up to 100,000 square feet by 2011. But the neighborhood almost surely won't get even that. Phase II (2012-2015) depends on "early relocation if able to buyout/sublease." In other words, the MTA's plan is contingent upon its being able to move employees to 370 Jay from various offices in Brooklyn and Queens where it is now paying rent. But the office market has turned down, with the result that many landlords will be reluctant to let the MTA out of its leases cheaply. Those leases now cost the MTA some $7 million, which is the amount of money the agency is hoping to save each year after reopening 370 Jay.
TAKING THE PROPERTY BACK
So why not go with the Downtown Brooklyn Partnership plan, which urges the MTA to net-lease just eight of 370 Jay Street's thirteen floors to a private developer, which would in turn lease them to many small businesses? Doing this would save the MTA upwards of $120 million in capital funds, says Joe Chan, while helping revitalize the neighborhood with small, creative businesses, and responding to an economic demand that is now going unmet. Under this plan the MTA would still have 150,000 square feet for its own uses. But as Brooklyn Councilmember David Yassky points out, "The MTA says they're going to spend $150 million to reoccupy the buildingassuming they do it on budget, obviously a faulty assumptionin order to save rent of $180 million over the life of the leases. Hey, we're going to save $30 million! For $30 million they’ve done this to the neighborhood? Something is really wrong."
A long-time advocate of public transportation, Yassky has repeatedly asked the MTA for an accounting of the value and use of all its properties, which the MTA refuses to supply. The MTA asserts that, first, it "is continually assessing its real estate to identify properties, like the Hudson Yards, that can provide revenue to the MTA without disrupting service." Second, "These opportunities are limited because so much of the MTA's real estate is operated under master lease, wherein it can only be used by the MTA for transportation purposes." In other words, the MTA is worried that if it were to respond to the partnership's net-lease proposal, for example, it would endanger its lease arrangement with the citywhich might well demand 370 Jay back. Thus it simply keeps 370 Jay vacantno non-transportation use, no problem.
Perhaps the city should take the property back so that it could issue an RFP for its economically strongest use, which may indeed be the partnership's vision of a small business incubator. After all, Mayor Bloomberg hates waste. Early in his administration he issued a directive to all city agencies to identify and analyze their real estate holdings so that they could sell off or exchange unproductive land. Even better, the administration could heed Yassky's suggestion to sell 370 Jay to a private developer, which would put it back on the tax rolls (the MTA, of course, pays not a penny in taxes on its property) and "lead the way to the ongoing development of downtown Brooklyn."
Meanwhile, the building declines and Lewis Mumford's optimistic predictionthat 370 Jay "might easily become a model for a whole district of such structures planned for efficient work, for easy access to public transportation, and for convenient pedestrian circulation"seems of another age altogether.
The optimism of an earlier age has given way to regret. "In the building as a whole there is not a single false touch," says Morrone. "I've grown to love it."
The MTA is a state agencybut one that needs substantial financial support and cooperation from the city government. The Bloomberg administration should make the productive reuse of 370 Jay a top priority in future negotiations. If it does not, the MTA will continue to undermine downtown Brooklyn for years to come.
|If you would like to unsubscribe, please reply to us and type "Unsubscribe" in the subject line.|