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

New York, New York
September 23, 2004

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Testimony before the City Planning Commission Public Hearing on Hudson Yards ULURP Applications

Thank you for the opportunity to speak in support of this very important proposal to rezone and redevelop the Far West Side of Midtown Manhattan. I also want to take this opportunity to thank the Commission and the staff of the Planning Department for the proactive approach you have taken to land use planning and rezoning, not just for this ULURP, but in dozens of communities across the city. The public attention to the West Side has overshadowed the fact that there are similarly bold and important planning and zoning actions going on in every borough. This is a great moment for New York City.

The Partnership for New York City represents the city’s major employers and business leaders. We seek to promote public policies and public investment that contribute to the growth, vitality and diversity of our city economy. After careful review of the Hudson Yards plan for the expansion of Midtown Manhattan’s central business district to the Far West Side, we urge your approval of the land use actions associated with this ULURP. The proposed rezoning and various public improvements contained in this plan will generate enormous private investment in redevelopment of a grossly underutilized area and transform it into a tremendous asset for this city.

The importance of the Far West side to the future of the city cannot be underestimated. The Partnership was part of an effort put together by Senator Charles Schumer some five years ago, known as the ‘Group of 35’, which recommended this extension of Manhattan’s midtown business district as part of a five borough strategy for New York’s economic development in the 21 st century. The 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, as proposed, can fulfill a significant portion of the anticipated demand for new commercial space, as well as a major increase in our housing inventory. The plan will insure that an expanded Javits Convention Center is not an isolated improvement, but an anchor for the future growth of our city’s hospitality, travel and tourism industries. Importantly, we do not find that this development is in conflict or competition with the rebuilding of 12 million square feet of commercial space in Lower Manhattan or the development of secondary business districts in Northern Manhattan and the other boroughs. Our city can accommodate a wide range of new commercial and residential development activities in all these locations.

The residential, commercial and open space mix that the Hudson Yards plan contemplates for the Far West Side provides an excellent balance of revenue generating activity and amenities. In Lower Manhattan, a combination of federal disaster aid and insurance proceeds are helping to finance the transportation infrastructure and other components required to redevelop and expand our downtown business district. On the Far West Side, a different revenue structure is needed.

The plan proposed by the City — using zoning incentives to finance infrastructure improvements — is an important innovation to the city’s approach to managing and funding development. It should be considered a precedent for other areas in the five boroughs. For the foreseeable future, we will not have sufficient public funds in our capital budget to finance all the public infrastructure 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 proposed public improvements, including an unfunded portion of the MTA capital plan. This is the type of creative thinking we desperately need if the city is to emerge from structural fiscal deficits and continue to generate new jobs, affordable housing and quality of life improvements.

The Partnership has taken a particularly hard look at the tremendous economic benefits generated by the extension of the Number 7 subway line. The Number 7 extension will yield 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. Our transit study also concluded that the intergovernmental planning and review process used for Hudson Yards should be the model for all future capital programs for expansion of the mass transit system.

During the ‘80’s, New York City undertook the largest urban redevelopment program in the nation’s history by leveraging its enormous inventory of in rem buildings and blighted urban renewal sites into a $10 billion affordable housing program. Similarly, the financing concept in the Hudson Yards zoning resolution could serve as a model for leveraging the value of up-zoned property. There are many derelict manufacturing areas throughout our city, often located along the waterfront that would benefit from the creation of district improvement funds.

In approving this ULURP, the city enters into a new generation of development planning and finance that has enormous potential. It involves moving away from site-specific negotiations and tax abatement programs and toward proactive planning and tax increment financing. The results of this new approach can achieve significant benefits for affected communities and the city as a whole. While there may be no locations with the upside potential that is available from Hudson Yards, this financing model can certainly be adapted to many places where the city’s land use actions and the sale of FAR bonuses can be a new source of revenues for needed local improvements or affordable housing.

The Partnership supports the City’s plans for the Far West Side and the zoning resolution not just because we believe Hudson Yards is a logical place for Midtown Manhattan to grow, but because in this plan we see the seeds of an idea that could change the way we think about and fund improvements in every borough.

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.