Don't Sell Our Birthright for a Mess of Potage
By Henry J. Stern
April 7, 2003

   In eight days, Mayor Bloomberg will present his budget for fiscal year 2004, which begins July 1.  At this time, the layoff of 15,000 employees is being projected by City Hall as a result of the failure of the state to restore the commuter tax or give the city financial aid, the refusal of the unions to make concessions on work rules or any other area which would save money, the lack of a rescue package from the Federal government, and increasing employee salaries and Medicaid costs.
 
    We do not know what rabbits are in the Mayor’s hat, or what if any new taxes he will propose, or what last-minute agreements may be worked out between the parties.  It is unlikely that the city will be helped by labor unions unless it guarantees there will be no layoffs, which the Mayor is financially unable to do.   One thing to beware is a midnight  proposal, which may be adopted in desperation, but will be costly and damaging in the long run.

    Such a scheme is the proposed sale of the city’s airports to the Port Authority in exchange for the site of the former World Trade Center.  The carrot is $690 million in back rent which the Authority already owes the city, and is now kind enough to offer to pay, if it can take control of the airports forever.  It is possible that someone will seize on this offer as a way of avoiding or reducing layoffs.
 
    Nothing could be more foolish and shortsighted.   If you are unable to pay your employees because you have over a quarter-million of them, you do not sell one of your most valuable assets to help stave off the inevitable reckoning by one year.  Michael Bloomberg would never have done this in his business; if he did he would not have been the success that he is. One cannot say it more clearly:  You do not sell invaluable, irreplaceable capital assets in order to avoid reducing a swollen payroll.
 
    The Daily News analyzed the current proposal in a critical editorial on March 31. Read it here.  Crain’s supported the plan in an April 7 editorial.  Crain's argument to us indicates a preoccupation with the WTC site at the expense of the whole city, the eight million who live in five boroughs, not just lower Manhattan.
 
    Even if the deal is made, the City will not have full site control downtown.  The footprint of the twin towers is considered sacred ground.  There are various proposals for memorials, which may be expansive and expensive, for museums to tell the story of 9/11 and for cultural institutions to take advantage of the crowds.

    And don't forget that the site has already been leased by the Port Authority, for 99 years, to Larry Silverstein, who has no intention of walking away from it.  Then there are the insurance companies, notably Swiss Re.   They are already in litigation over the payout, which must be spent to reconstruct the destroyed buildings. Factor in the substantial current vacancy rate in downtown office space, without vast new construction in addition to 7 WTC, which Mr. Silverstein already has in design.  And consider the unmentionable:  Would you spend eight hours a day on a high floor of the building which symbolizes  world capitalism and has been attacked twice by Islamic terrorists?
 
    The income which the city could gain from the airports, if properly operated, is enormous.  There have been numerous complaints about the Port Authority’s operations, widespread thefts at JFK airport, lack of security with regard to incoming narcotics, etc.  I am unable to evaluate these allegations, but in principle a change of management is often the remedy when one agency has become too fat, rigid or lazy to do the job.

    Another issue is the need for ULURP review of the proposed transaction.  If the city wants to acquire a storefront, the matter is subject to land use review by the City Council, the relevant borough president, and the community board in an advisory capacity.  My concern is that this proposal will be offered as a last minute budget saving solution, and whipped through before there is a chance to examine it on the merits.
 
    My skepticism about this transaction should not be interpreted as dissatisfaction with Mayor Bloomberg.   This idea is considered the brainchild of Deputy Mayor Daniel Doctoroff, who is widely known to have a healthy obsession with the 2012 Olympics.  Before he was appointed as the $1 a year Deputy Mayor for Economic Development, he chaired the committee to bring the Olympics to New York City, where he did an excellent job, along with Executive Director Jay Kriegel.  We do not know yet how the landswap will impact the entire west side of Manhattan, but it has been said that there is a connection between the Port Authority deal and the search for public funds to build a new stadium on the West Side.

     I believe Mayor Bloomberg is doing a good job.   He was right on the ban on smoking, and the property tax increase, two issues which have lowered his poll ratings substantially.  He has not been afraid to take unpopular positions, in fact he seems to relish them.  He has appointed honest and competent commissioners and given them authority in their agencies.  He is devoted to the city, and tries to advance its best interests.

    But that does not mean that he is always right, or that I agree with him on every issue.  Executives are often as good as the advice they get, and the Mayor is still new to politics.  Unfortunately, there is no Karl Rove in City Hall, nor would the Mayor tolerate one.  He paid a lot of money (by our standards, not his) to get elected (which was important to him, and probably a benefit for us).  Now he wants to play the Mayor’s hand by himself. We hope he plays it successfully, because he represents our better nature (although that may not be exactly what we need right now) and our best hope for a peaceful and solvent city.

Henry J. Stern is the director of NYCivic.