Downtown rail link tunnel plan nixed?

Downtown's business interests have never liked the way that Lower Manhattan has always had to play second fiddle to Midtown's dense transportation infrastructure.

It's one of the main reasons why many real estate experts say the area's office market has always lagged behind, a disparity highlighted now more than ever given that the city's booming economy has boosted rents along Midtown's prime corridors routinely above $100 per square foot. Commensurate office stock in Downtown often commands less than half that.

Billions of dollars have been invested in ongoing projects like the Calatrava designed World Trade Center PATH Station and the glass domed Fulton Street Transit Center. The work will beautify and increase accessibility to the area's transportation, but it will do little to increase capacity. Nor will it accomplish what Downtown landlords have been hankering for; a convenient connection between Downtown and Long Island, where the majority of the city's commuters live.

For that, Downtown proponents have joined forces to champion another project, the Downtown JFK Rail Link.

Not surprising to those who can envision its potential benefits to the commercial interests in the district, the rail link is credited by many as the brainchild of John Zuccotti, president of Brookfield Properties and arguably Downtown's most powerful and politically connected landlord. Zuccotti helped put the issue on the agenda of the real estate trade association REBNY during his recent tenure as its chairman.

"It was one of the reasons why he wanted to be REBNY chairman," said Douglas Durst, a Manhattan developer and landlord whose portfolio of properties is located mainly in Midtown.

Zuccotti has helped generate support for the project from within the state's most powerful political circles. Senator Chuck Schumer and Senator Hillary Clinton have both endorsed it and so has Assembly Speaker Sheldon Silver and Congressman Charlie Rangel, who has great influence over the passage of a critical portion of the rail link's funding as Chairman of the House Ways and Means Committee.

Not only does the rail link enjoy wide political support, it also could be remarkably well capitalized for a project that is in such a preliminary phase of development. Currently, an interagency group led by the Metropolitan Transportation Authority is conducting a feasibility study to determine how the rail link will even be formally conceptualized. But $2 billion appears to already be waiting in the wings for it, the product of an unused tax credit that had been made available to Lower Manhattan after 9/11 that the federal government has agreed to convert instead into cash.

The project seemed to gain a major victory in recent weeks when President Bush included that $2 billion for the rail link in his federal budget.

"The effort to secure funding to build this critical rail link has been a real team effort, and I want to thank all of our partners, including ABNY, REBNY, the Partnership for New York City and the Downtown Alliance," said Mayor Bloomberg, in a statement released hailing Bush's allocation towards the project. "Without their assistance, the progress we have made would not have been possible."

Now all that needs to happen, it seems, is for Congress to approve the $2 billion federal payment and the rail link would appear to be well on its way. "We're looking to Charlie Rangel to identify what bill it can be attached to, once he identifies that, I'm optimistic that it will happen," said Steve Spinola, president of REBNY. "We've discussed it with Governor Spitzer along with Lee Sander (the MTA's new executive director) who is clearly his transportation person. So we're talking to the administration, we're giving them all of the arguments and as of now the Governor has been supportive for what we need to accomplish, which is to get the trade-in done."

Governor Spitzer may want the trade in, but there is no guarantee that he supports the rail link.

Although he has remained conspicuously silent on just how high he ranks it on his priority list of transportation projects, insiders and transportation authorities--as well as speeches that the Governor gave prior to his election--indicate that he considers the rail link of less importance than the Second Avenue Subway--a multiphase, multibillion dollar line that will alleviate congestion on the Lexington Avenue subway and which promises to be a major drain on the MTA's coffers.

There likely aren't enough funds for both projects and the Governor may already be making plans to scale back the rail link so that more funds can be allocated towards completing the Second Avenue subway, whose first phase of construction--a stretch of track from 96th to 63rd Street that will link into the N and R lines--will break ground in the coming weeks at a cost of $3.8 billion.

Congressman Jerrold Nadler, whose district includes Lower Manhattan, has advocated a rail link project that essentially leaves out the most costly component of the plan that Downtown's business interests have envisioned, a new tunnel under the East River. The tunnel is what would allow the critical concept of the project, a true one-seat ride from Downtown to JFK Airport.. But it is also what will drive the project's cost past $6 billion, a years-old price estimate that is likely undervalued by a few billion given the recent escalation in construction costs.

Nadler's plan would deploy hybrid trains to run on LIRR tracks starting at Atlantic Terminal that then connect directly with the Air Train tracks servicing JFK Airport in Jamaica. The hybrid train, which would need to run on tracks of different gauges and power sources to be functional on both lines, would cost more than conventional train cars, but Robert Gottheim, a spokesman for Nadler, indicated the overall plan would be far less expensive, around $400-$500 million. But Downtown commuters and airport travelers would have to get to the Air Link extension using existing subway lines, a concept that falls far short of the type of connection

Downtown's business community has hoped for. Yet it may already be in the works. Governor Spitzer controls the interagency group that is putting the project together. The $2 billion trade-in, meanwhile, doesn't necessarily come with a requirement that its funds be used for the rail link. According to the parameters attached to the package of incentives that were provided to Downtown to aid in the district's recovery after 9/11, the money can be used on any project south of Canal Street. Spitzer also has large influence over a $2 billion placeholder in the Port Authority's budget, money that a rail link would need to utilize.

He won't leave Downtown out to dry, but few transportation authorities believe he'll condone a plan that would be Downtown's equivalent of the East Side Access project that will bring LIRR service to Grand Central Terminal. Gottheim said that such a plan would hold more sway "if you were making the argument that firms are leaving Manhattan for other areas if we don't do this."

"But we're talking about Lower Manhattan versus Midtown," Gottheim said.

"Lower Manhattan has an advantage over Midtown in that its rents are much cheaper. So it's not like firms are just getting up and leaving. The vacancy rate is much lower and rents have been rising, it's a question of what makes the best economic sense."