TESTIMONY
by Kathryn Wylde, President & CEO
PARTNERSHIP FOR NEW YORK CITY

New York, New York
December 13, 2004

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Testimony before the City Council Committee on Zoning and Franchises on Hudson Yards ULURP Application

Thank you, Chairman Avella and members of the Subcommittee on Zoning and Franchises. I am here on behalf of The Partnership for New York City, which represents the city’s major employers and business leaders. The Partnership seeks to promote public policies that contribute to the growth, vitality and diversity of our city economy. We have carefully reviewed the Hudson Yards plan for the expansion of Manhattan’s central business district to the Far West Side and we urge your approval of the land use actions associated with this ULURP application.

The proposal before you promises to create a vibrant new community on the Far West Side of Manhattan. The commercial and residential development that will result from this plan will help fuel the city’s economic growth for the next thirty years. The rezoning and planned public improvements will leverage enormous private investment in a long underutilized part of Manhattan and transform the area into a revenue- and job-generating asset for this city.

The Far West Side was identified as an important development opportunity in 2001 by the Group of 35 CEO’s convened by Senator Charles Schumer and co-sponsored by the Partnership. The Group of 35 issued a report that recommended a West Side extension of Manhattan’s midtown business district as part of a five-borough strategy for generating jobs and economic growth in the 21st century. Research by that group projected a need for some 60 million square feet of new office space over the next few decades. The West Side plan can fulfill a significant portion of the anticipated demand for new commercial space—as much as 26 million square feet. It will also do much to increase our housing inventory by creating 13,600 new units—with 2,600 units reserved for affordable housing.

I need to point out that the Partnership’s first priority for new commercial development in Manhattan is the rebuilding of the World Trade Center site. Happily, Downtown development is well underway. A huge public investment in upgraded transportation and other services and amenities for Lower Manhattan will assure that the 10 million square feet of newly constructed commercial space at the Trade Center site will be completed and occupied during the coming decade, well in advance of new office buildings on the Far West Side. Similarly, the expansion of business districts in Downtown Brooklyn, Long Island City and Jamaica are all complimentary – not competitive – with the development contemplated for the West Side. Our city can accommodate a wide range of new commercial and residential development activities in all these locations and the Bloomberg Administration has initiatives moving forward in these areas and others as well.

The Partnership is particularly excited about the innovative plan to use zoning incentives to pay for the public infrastructure required to redevelop this area. For the foreseeable future, we will not have sufficient public funds in our capital budget to finance all the public infrastructure, parks and affordable housing that the city needs. The West Side plan includes a bold proposal for the city to capture some of the value created by rezoning to help pay for public improvements, including a portion of the MTA capital plan. This is the type of creative thinking is needed to support public construction during a period of fiscal austerity.

While there are certainly risks entailed in financing that anticipates future values and depends upon market forces, these risks are worth taking. The traditional method of financing public improvements through municipal or agency debt has come up against debt limits and budget constraints. The West Side captures appreciation in property values created by public rezoning, parks and transit improvements in a way that our city has never done before. While the final details still need to be worked out, the approach to financing that has been proposed for the West Side is a precedent that offers the best hope for maintaining a strong capital improvements program throughout the city in the decades ahead, as our ability to issue and carry public debt diminishes.

The best example of the benefits of this approach is the plan to extend the Number 7 subway line. A Partnership study documented that this subway will produce more than five times its capital cost in economic development benefits—far more than any other major mass transit project contemplated in the MTA capital plan. Given the state of the MTA budget, there is no way that this important new subway—which also will service the expanded Javits Center—would be built without the funding available through the West Side plan.

In approving this ULURP, the City Council will be launching the model for a new generation of development planning and financing that has enormous potential for the entire city. While there may be no other locations with as great an upside potential as the Far West Side, this financing model can certainly be adapted to many places where the city’s land use actions and the sale of FAR bonuses can create new revenues for local improvements and affordable housing. In this plan we see the seeds of an idea that could change the way we think about and fund improvements in every borough.

In conclusion, I want to recognize the incredible effort that Planning Chairman Amanda Burden, Manhattan Planning Director Vishaan Chakrabarti and their staffs have made to reach out to all the stakeholders affected by this plan over the course of the past two years. In my experience there has never been such a truly consultative process with residents and business, both within the rezoned area, in surrounding communities and with citywide groups like the Partnership. At the same time, the Planning Commission has also managed to generate dozens of other significant rezoning and planning actions across the five boroughs, establishing this as the most productive and proactive Commission that we have had in more than thirty years. The city is moving forward on every front, and we should all feel very good about it.

The Partnership for New York City (www.pfnyc.org) is a network of business leaders dedicated to enhancing the economy of the five boroughs of New York City and maintaining the city’s position as the global center of commerce, culture and innovation.