Saturday, December 10, 2011
The City's latest money pits
From the Daily News:
The Hudson Yards development project on Manhattan’s far West Side is about to become New York’s next big money pit.
The city could be on the hook for more than $500 million by 2015 just to pay interest on $3 billion in Hudson Yards bonds — largely because commercial and apartment building construction in the area has not reached anywhere near the level Mayor Bloomberg’s top aides predicted back in 2005.
Meanwhile, costs have ballooned for Hudson Yards’ two main public improvements: extension of the No. 7 subway to 34th St. and 11th Ave., and construction of a new ribbon park and midblock boulevard between 10th and 11th Aves.
During the past few months, the Metropolitan Transportation Authority has quietly revised the price tag for the subway extension to nearly $2.4 billion from $2.1 billion.
City Hall continues to insist, nonetheless, that the overall project is still on budget.
“Total project cost for the 7 train and redevelopment area was and remains $3 billion,” mayoral spokesman Marc La Vorgna said recently.
So how do the mayor’s number-crunchers manage to make this increased cost disappear?
They miraculously found $235 million in “cost savings and unused contingencies elsewhere within the project budget,” according to a Hudson Yards bond document released in October, while also adding $32 million to pay for “certain 11th Ave. reconstruction work necessary to construct the subway extension.”
Well, not exactly.
By a maneuver worthy of Houdini, the city has buried more than $10 million in infrastructure costs for Hudson Yards in the budgets of other agencies.
From the Brooklyn Paper:
The cost of a proposed footbridge from Brooklyn Heights to Brooklyn Bridge Park’s Pier 1 — a key amenity for residents seeking quick access to the world-class park — jumped 26 percent after park officials upgraded the design then failed to find a contractor who could meet the original budget.
On Monday, Brooklyn Bridge Park announced that Kelco Construction won a $6.2-million contract to design the Squibb Park Bridge, a 400-foot timber structure that will link Columbia Heights to the verdant park below that was budgeted to cost $4.9 million.
City planning experts called the 26-percent cost increase common in city government but still significant.