Spitzer: state “struggling” with runaway building costs

Gov. Eliot Spitzer, in a somber address today to New York City’s developers, said runaway costs and delays for big public projects threaten the city’s standing as a world capital.

Spitzer’s speech to the New York Building Congress centered on how costs threatened to slow a range of projects, from rebuilding the Tappan Zee Bridge to reinventing Governors Island. He called the growth in construction spending, driven by skyrocketing commodity costs, the state’s “biggest problem.”

Spitzer said he had urged commissioners at the Metropolitan Transportation Authority and elsewhere to get serious about controlling expenses on major projects.

“We’ve got to be parsimonious and structure bidding so that we do better within our budget,” the governor said. “All too often we get only one bid [for a job]. We cannot survive that way.”

Spitzer told the construction and development executives assembled in the Mandarin Oriental Hotel’s 36th floor ballroom that he will scrap long-stalled projects that “don’t make sense.” He stressed his decision to abandon plans for a grand expansion of the Javits Center on Manhattan’s Far West Side after projected costs spiraled out of control.

“The Javits Center will not be built,” he said. “We will sell the property to the north and [use the proceeds] to build transportation and housing.”

In a brief session with reporters later, Spitzer refused to commit to plans for reassigning the hotel taxes that would have helped pay for the Javits expansion. He said the state would keep trying to bring the existing center “up to par.”

Spitzer said a blue-ribbon commission for the Metropolitan Transportation Authority would begin producing new ideas for construction reform to control costs at key projects like the Second Avenue subway. 

Aaron Donovan, an MTA spokesman, later told The Real Deal that the agency’s “panel on construction excellence” is slated to report its recommendations next month, after which MTA staff would “immediately” get to work on them.

The governor urged developers to support Mayor Michael Bloomberg’s proposal to charge drivers a fee to enter Manhattan’s central business districts. A state panel is expected to recommend that the state Legislature approve the plan at a meeting today.

“Congestion pricing is vital to the future of New York,” he said. “Without it, we will not have a city that is viable.”

Spitzer said the redevelopment of Ground Zero had proceeded enough that the focus could turn to “how we find tenants and fill the buildings.”

The governor also put his stamp of approval on the elaborate Santiago Calatrava design for proposed for the PATH terminal at Fulton Street. The design would stand out in the neighborhood, but some critics say the costs will require it to become more modest.

“The PATH hub must be built,” he said, “even if it’s a bit expensive.”