Public projects could face uncertain future under Bloomberg

Real Estate Weekly, Jan 16, 2002 by Parke Chapman

One week into his term, Mayor Michael Bloomberg has made a string of comments on the likelihood of several embattled institutional developments. While he hasn't made a formal speech addressing the future of these projects, his piecemeal remarks offer some clues to how his administration will manage these costly developments.

Foremost among Bloom-berg's claims is his resolve to cut costs by reducing the mayoral staff by 20 percent. It was a sobering message, underscored by his resolve to "search for efficiency."

"We will not be able to afford everything we want," said Bloomberg at his Inauguration Day speech.

On the embattled Lincoln Center redevelopment project, Bloomberg--referring to the project--said that "some of these things are just going to get postponed," when asked by a reporter about the project.

He did say that the planning process should continue, though the fate of this $1.2 billion redevelopment plan is by all accounts murky. In recent weeks it saw another high-level defection, the second such move in the past 13 months.

One area that Bloomberg specifically mentioned in his Inauguration Speech was the city's extensive waterfront, one of the city's largest frozen assets for years.

"We will bring new life to our water-front and stimulate new investment in housing, schools and-when we can affords them-the world's best cultural and athletic facilities," he said.

Of the latter--stadiums--Bloomberg has set himself apart from their biggest proponent, former Mayor Rudy Giuliani.

"It's just not practical this year to go and build new stadiums," said Bloomberg at City Hall last week.

Bloomberg said that he would honor an agreement drafted by Giuliani to spend approximately $50 million within the next five years to plan new parks, however. The deal calls for the city to divide an estimated $1.6 billion construction cost with the baseball teams themselves.

Several other developments in the works prior to Sept. 11 have lately received little or no coverage. One of those projects is the new Guggenheim Museum, to be built on the East River by architect Frank Gehry. The project is estimated to cost $678 million, and prior to Sept. 11 it was apparently making progress securing these funds. Its capital campaign formally began last spring.

Like Lincoln Center, however, this expansion may prove to be difficult during a recession.

One source with extensive knowledge of the arts said that the Guggenheim project is doubtful.

"The city committed a lot of money to this last year, but ever since Sept. 11 the rumor is that it won't happen at all," said the source.

As for the new New York Stock Exchange, it appears that it, too, is stalled. Back in mid-December, NYSE chairman Richard Grasso floated his plan to build it on Ground Zero.

He is, so far, the only person to propose such a future location for the stock exchange, suggesting that it may be months before anything firms up here.