Second Avenue Subway delay to impact real estate in the short-term
July 22, 2009 06:30PM By Sara Polsky
Second Avenue subway renderings (Source: MTA)Between now and whenever the subway is completed, said Halstead Property Senior Vice President Rena Goldstein, it could be difficult to interest buyers in Upper East Side properties east of Third Avenue. Goldstein said she chose not to show one Second Avenue apartment in the 70s to buyers searching for a pied-à-terre because she knew they didn't want to live near construction for the next seven or eight years.
"It's going to be a lot harder to sell property [on the Upper East Side]… it's going to be like that for a long time." The construction will likely mean fewer customers for local businesses, leading some to close, she said — another negative for prospective residents. "When stores start to become empty, then it impacts negatively on the community around it and …on the value of apartments."
A Metropolitan Transportation Authority review of the subway project found that the completion date of the first phase, originally expected to be June 2015, is more likely to be December 2016. Additional delays could push back the opening to the summer of 2017. And the Federal Transit Administration estimated in a separate analysis that the first segment of the subway line might not be completed until June 2018, the New York Times reported.
The costs of the project have also gone up to as much as $5.728 billion from $4.775 billion, according to the New York Post. The first phase will include tunnels between 105th and 63rd streets and new stations at 72nd, 86th and 96th streets along Second Avenue, according to the MTA Web site. The subway line will eventually stretch all the way to the Financial District.
Kathy Braddock, co-founder of Charles Rutenberg Realty in New York, said she didn't think a one- or two-year delay would turn potential buyers away from the Upper East Side neighborhood where the first phase of the Second Avenue subway is being built.
"I don't think that psychologically that makes a difference …. I think it's going to be a mess for a while, and I don't know if the extra year is really going to be a huge deterrent," she said.
Asher Alcobi, president, principal and founder of Peter Ashe Real Estate, said he didn't think the delay would stop any residential or commercial private sector planning for the area, either.
One concern for potential buyers as the project is delayed, Braddock the consultant said, is whether it will be finished at all. If the city's finances make it impossible to complete the project, a hole in the ground, "no matter what the price [of real estate], would be a deterrent," she said. And some buyers might expect discounts now because of the construction's expected impact on the neighborhood.
But once the subway is completed, Alcobi said it will boost prices in the area significantly and could have a wide-ranging impact on city real estate. Wall Street employees might relocate uptown from the Financial District, and subway access to East Harlem could improve development there, Alcobi said. And buyers who previously refused to look east of Third Avenue will broaden their horizons, Halstead's Goldstein added, noting: "the far East Side will come up in value."
Buyers who choose to look east of Third Avenue today stand to benefit whenever the project is done, Braddock said.
"If you have some vision and you have some belief … if you have a long-term hold and it all goes smoothly, you've made a very wise choice."
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Comments
Anonymous
The time it is taking to build this subway system is a sin and a disgrace to the upper east side. We are property owners/investors in this area. We were able to get a man on the moon but to put one lousy subway line on second avenue seems to be impossible. Bloomberg, stop concentrating on cony island and get your people here to help your backyard - the upper east side
Comment #1 Posted By: Anonymous 07/23/09
Anonymous
I might add - its really great to see chairs and benchs and islands put in the middle of traffic to create pedestrian areas in Manhattan, put first finish the infrastructure before adding extra amenities. This city needs running subways asap in this area of 2nd Avenue.
Comment #2 Posted By: Anonymous 07/23/09
Anonymous
fyi - they were able to get the "high Line" 1/2 finished, where are the celebrities and socialites taking on the cause of the 2nd Avenue subway? We need you over here!
Comment #3 Posted By: Anonymous 07/23/09
Anonymous
NYC and the MTA are a joke. It will take them 10 years to build what, 2 miles of subway? And part of the tunnel was actually already built back in the 1970's. This means we could be looking at a 20-25 year build out for the entire 8 mile subway line...pathetic (not as bad as the sin of no rebuilding Ground Zero but close). Building in NYC is difficult, but it's equally difficult in Tokyo, Paris, Rome, etc and they seem to manage just fine.
Comment #4 Posted By: Anonymous 07/23/09
Anonymous
Is this really how long it takes to build a subway system? I am not an engineer or technical, so am I wrong to think there is something wrong here with how long it is taking?
Comment #5 Posted By: Anonymous 07/23/09
Anonymous
The city would spent 1/3 of its time and money building a leaner and meaner elevated railway. Monorail!
Comment #6 Posted By: Anonymous 07/23/09
Anonymous
hate to say this but there is little to no chance the 2nd avenue subway line gets built in the next 10 years. It is not going to happen The city blew their opportunity Why built it now in face of budget issues? Yes it will create some jobs but there are plenty of city constructino jobs. People will have to walk those extra 2 blocks for a long long time
Comment #7 Posted By: Anonymous 07/23/09
Anonymous
I enjoy taking the bus actually.
Comment #8 Posted By: Anonymous 07/23/09
Anonymous
The problem is the MTA hires union workers and pays them $70 bucks an hour to jerk off and extend this project as long as possible so they all have jobs. If this were outsourced Dubai style, it would get built over the next 2 years. They should have auctioned off private contracts to get this work done with penalties for lateness. This project started in fucking 1955! I would not be surprised if there was another MTA strike and this project would just get cancelled again.l
Comment #9 Posted By: Anonymous 07/23/09
Anonymous
MTA: Moron Transit Authority
Comment #10 Posted By: Anonymous 07/23/09
Anonymous
Please someone tell me? How long would this really take if it was done efficiently? Or is how long it takes with the technology that is in place today?
Comment #11 Posted By: Anonymous 07/23/09
Anonymous
This is some pessimistic crowd alright..lol. The tunnel was partially done back in the 70's.. Besides providing jobs it will increase value all along 2nd Ave. as well as bring vitality to East Harlem. This is a Great Project and ultimately be a boon for Manhattan.. More tax revenue.. Greater accessability in Manhattan.. Freeing space on the Lexington Ave line.. Think Positive for Gods sake already.
Comment #12 Posted By: Anonymous 07/24/09
Anonymous
I arrived in new york in 1969,and second avenue subway was under construction .Now it is 2009 and second avenue subway is still under construction. 40 years and still under construction.
Comment #13 Posted By: Anonymous 08/19/09
Anonymous
Drilling is on my doorstep right now, literally. However, despite starting at 7:30 AM, they are still falling behind on time... Maybe its the 3 hour lunch break? For those who wonder why things get done much faster in Tokyo, Paris, etc., they don't have unions, and if someone isn't doing their job, they get fired, but not here. There is an incentive to steching time out, its called overtime, and that's why every year the projected end date is extended by another year.
Comment #14 Posted By: Anonymous 09/17/09
Anonymous
Under construction in 1969 eh? Ground wasn't broken on the 2nd ave subway until Oct 27, 1972. Construction continued to early 1976, so that's about 3 1/2 years in the 70s. Then 31 years with no construction going on, then another groundbreaking on Apr 12, 2007. So it's been actually under construction about 6 years total. IMHO they should have anticipated the need to shore up and/or condemn buildings along the way that needed it. They can't build something this size without ruffling a few feathers.
Comment #15 Posted By: Anonymous 10/05/09