Jets hope stadium plan soars

Real Estate Weekly, March 12, 2003 by Steve Viuker

At a Feb. 28 conference at the Newman Real Estate Institute at Baruch College, Deputy Mayor Daniel L. Doctoroff and Jets president Jay Cross dazzled the real estate executives who attended with Joe Namathlike, moves with plans for transforming the neighborhood from 28th to 42nd Streets, west of Ninth Avenue.

Doctoroff showed off renderings of new tree-lined streets, commuter rail connections and a new business district with skyscrapers along the avenues. The plans also call for spending $1 billion to double the size of the Jacob K. Javits Convention Center. Doctoroff said the administration would pay for the $2.68 billion plan "without using existing city resources." In the language of municipal finance, it is known as tax increment financing, or TIF.

The city would issue bonds that would be paid back with revenues from rising property values in the neighborhood over the next 30 years, as the city extends the No. 7 subway line from Times Square to 34th Street and 11th Avenue, rezones the area for 16 new office towers, erects a football stadium for the New York Jets and builds new parks and streets.

"I have questions about how this will be financed," said Manhattan borough president C. Virginia Fields, who was also a featured speaker. "Any bonds backed by funds from planned development, whether it's TIF or the sale of zoning bonuses, will be problematic, since the development will come years after the public investment," she said. A total of 28 million SF of commercial space would be constructed on the West Side between 2010 and 2035.

The Bloomberg administration's plans for the West Side coincides with the effort to bring the Olympic Games to New York in 2012, and with plans to build a stadium with a retractable roof for the Jets on a platform over the rail yards, between 30th and 34th Streets and 10th and 12th Avenues. Representatives of NYC 2012, the group leading the city's Olympic bid, also made presentations yesterday. Fields presented her own plan, emphasizing a residential neighborhood with some commercial space, as opposed to the city's emphasis on creating a new business district. The local community board and many neighborhood groups oppose the stadium.

"New York and Los Angeles are unique because they don't need a new stadium to complete the city and make it look major league; such as middle-market cities like Pittsburgh or Cincinnati do," explained Bill Dorsey, president of the Cincinnati-based Association of Luxury Suite Directors. "On the other hand, you would think that those cities would want to enhance their reputations by having the best sports venues in the world. And with a multi-use facility, such as it appears the Jets are proposing, it will be a revenue generator for New York in attracting conferences and other events. Most cities don't just build the venue anymore.- It's part of a greater development plan. You have a city like Detroit building a new stadium for Lions downtown. Houston has three new venues. New York has the worst venue development record of any city in the country."

(Los Angeles has seen a re-birth of its downtown, in part fueled by the opening of the Staples Center, home to the Lakers and Kings.) The Jets have said that the team is willing to pay for a major share of the $1.2 billion stadium, but the city would have to pay for the retractable roof and the platform over the rail yards.

"Privately financed is the best way," explained Dorsey. "Pac Bell in San Francisco was privately funded, as was Gillette Stadium in Boston. The venues are built better and teams won't leave a venue they own."

Under its financial plan, the city would enter into voluntary agreements with commercial developers, in which the city would own the land under their projects. The developers, in turn, would make payments to the city in lieu of property, sales and mortgage recording taxes. The city would use the money to pay the tax-exempt bonds issued by a local development corporation for transportation and other projects. Residential developers would be offered tax breaks. The city would also sell the development rights to build on platforms over the rail yards for about $300 million and the rights to build taller buildings than zoning rules would ordinarily allow.