Construction gets underway on No. 7 subway extension

Real Estate Weekly,  Dec 5, 2007  by Daniel Geiger

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Construction began today on the No. 7 Subway extension that will bring the line from Times Square to 34th Street and Eleventh Avenue, an area in the direct vicinity of where millions of square feet of commercial and residential development ate being planned.

The extension is envisioned as a way to encourage more development as well as support the viability of projects already slated for the neighborhood, particularly the West Side Rail Yards-which is considered the bulwark of the city's plans to remake the far West Side into a vibrant commercial district.

According to a release issued by Governor Spitzer's office, the economic development spurred by the extension is projected to generate up to $60 billion in tax revenues over the next 30 years.

But questions still remain over who will pay for any cost overruns beyond the extension's $2.1 billion budget. The city is bonding the current cost against the revenue stream it secures from deferred taxes collected in the Hudson Yards district, the swath of West Side territory it feels the No. 7 extension will help revitalize. But it has refused to pay for anything more should the construction costs unexpectedly rise or the project runs over budget.

The MTA, which is projecting deficits in the next few years and is struggling to find the funds to pay for its massive new capital budget, meanwhile hasn't agreed to pick up the tab should those costs arise. According to a post on the New York Observer's website, Governor Eliot Spitzer, at a press conference this morning held to announce the groundbreaking, left the issue hazy.

"If you were to try to resolve every one of these uncertainties and ambiguities before you began construction, you'd be back to the gridlock," the Observer quoted Mr. Spitzer as saying. "We'll deal with them as they emerge and the partnership will permit us to resolve them."

Another point of contention among transit advocates and proponents of the West Side of course is that the current plan for the extension leaves out the construction of a second station, at 41st Street and Tenth Avenue, that had originally been proposed as part of the project. The station would likely increase the impact the extension has as a catalyst for development on the West Side and transit experts say that building it now would be far cheaper than putting it off.

"I guarantee that whoever wins the bid to build the West Side Rail Yards is going to want that station," said MTA board member Andrew Albert. "I really felt that we should have included it in the West Side Rail Yard RFP that whoever wins the development rights should have to fund the station."

After scrapping plans for a full station, the extension plan made provisions to excavate a shell for the stop, which would lower future construction costs. But now even that plan has been scrapped. Albert said that building the station now would cost around $250 million, a price that would likely double in a few years he said.

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