Still gearing up for Act III

Normally pro-development Bloomberg has been quiet of late, but is said to be ramping up his real estate agenda once again
By C.J. Hughes | November 01, 2010 07:00AM

Clockwise, from top left: Governors Island, Mayor Michael Bloomberg and the Hudson Yards site

Since taking office in 2002, he’s rezoned about a quarter of New York City, and been instrumental in development projects from stadiums to parks to shopping malls to waterfront condominiums.

But since Mayor Bloomberg beat former city comptroller William Thompson in last fall’s election and started his third term, the decidedly pro-development leader has been noticeably quiet on the real estate and development front, many longtime observers point out.

Indeed, it took Bloomberg about six months into his final term to name a deputy mayor of economic development, Robert Steel, a former Goldman Sachs executive, who will help set the mayor’s development agenda for his final few years in office. (His last economic development czar, Robert Lieber, tellingly left to work for real estate investor Andrew Farkas.)

And Steel, who took over the job in September, has not really said much publicly about the administration’s plans. He is taking time to “assess the city’s economic environment, needs, competitive advantages and potential areas of growth,” a spokesperson said in an e-mail.

Still, the city shouldn’t expect an easing of City Hall’s big-development approach, even if the economy is sluggish, according to many crystal-ball-gazing developers, analysts and political consultants.

They say the mayor is gearing up to roll out a development agenda and will soon zero in on about a half-dozen major projects (many of which have been facing hurdles for several years) with a renewed vigor.

In addition to plans he announced in April with the City Council to study ways to revitalize the city’s 578 miles of waterfront with more development and public access (a plan he said will be implemented over the next three years), there are several other projects he is expected to stay focused on. They are: the Willets Point redevelopment plan, which has been delayed because the city is still dealing with lawsuits from holdout property owners; Governors Island, which the city acquired this year from the state, but still needs to finalize a plan for; and Moynihan Station, a joint city-state project that got an $83 million federal boost last month, but still needs millions more.

Last-term mayors like to cement legacies, and a sure way to do so is to construct, even if those projects end up being controversial, said George Arzt, a political consultant who was Mayor Ed Koch’s spokesperson.

“From the pyramids on, if you build something, people will remember you,” said Arzt, who jokingly refers to the phenomenon as an “edifice complex.”

The Hudson Yards site, along 10th Avenue, is one that the mayor is likely to be most remembered for, Arzt said. Also, it’s imbued with symbolism because it’s where Bloomberg, with his first-term, high-profile development point man Daniel Doctoroff, pushed aggressively to build a stadium for the Jets football team. Though that plan, which faced fierce community opposition, died in Albany in a somewhat embarrassing defeat for the administration, the area was still rezoned for 12 million square feet of apartments, offices, stores and parks.

And despite the delays in starting up construction there stemming from the economy, priming that area for development is one of the biggest moves Bloomberg has made on the development front. In May, the Related Companies and Oxford Properties Group finally, after a year-long delay, inked a deal to lease the air rights over the tracks there.

At The Real Deal’s annual forum last month, the president of Related, Jeff Blau, said construction won’t start for at least 18 months, but that the company has gotten a lot of “corporate interest” from those looking to take 1 million square feet of space.

Because the figurative foundations for the planned Hudson Yards development were laid on the mayor’s watch, it “could be the real legacy,” Arzt said.

While Hudson Yards is clearly where the most attention will be directed, another project that will likely get full mayoral attention is Hunters Point South, in Long Island City, which will be a sprawling, multiphase affordable housing development, predicted Steven Spinola, president of the Real Estate Board of New York, the powerful trade group.

In fact, it’s a sign of that project’s viability that its first phase attracted seven bids in September, including by AvalonBay Communities, Douglaston Development and a team made up of the Related Companies, Phipps Houses Group and Monadnock Construction. Spinola said that was far more interest than expected; the city is scheduled to select a winner by January. “It can be built and will be built,” Spinola added.

Henry Stern, who served as parks commissioner under mayors Koch and Giuliani, lauded Bloomberg for his 100 or so rezonings, which affected many boroughs, especially in the face of a population that can seem overly resistant to new construction.

“There is a lot of NIMBY-ism, and there are also lots of BANANA people, who want to ‘build absolutely nothing anywhere, near anybody,'” said Stern, citing the opposition to the Atlantic Yards development in Brooklyn.

But Stern, who now heads the government watchdog group New York Civic, doesn’t see much happening, real estate-wise, between now and 2013, when Bloomberg’s term ends.

“I don’t think the mayor will do much because he’s distracted by the presidency,” he said. “He’s becoming a national figure, so he’s less interested in severely rocking the boat.”

While the development and real estate community tend to be big Bloomberg backers, the mayor has taken a lot of flak for his shovel-prone tendencies. State Assemblyman Richard Brodsky, a perennial Bloomberg critic from Westchester County, said Bloomberg’s legacy is a series of stalled projects, like Hudson Yards, whose debt the city continues to service, “a real economic consequence.”

In addition, the three sports facilities Bloomberg has championed — Atlantic Yards, for the New Jersey Nets; Citi Field, for the Mets; and Yankee Stadium — were financed with billions in public money that could have been spent on schools, commuter trains or hospitals, he said.

Still, even though the economy is still soft, City Hall should ramp up infrastructure projects, because ultimately that’s what will keep New York competitive, Brodsky added. Current examples include a new water tunnel, the No. 7 train extension and a new Second Avenue subway tunnel, though many are mostly federally funded.

Douglas Muzzio, a political science professor at Baruch College, said he expects Bloomberg to plow ahead with a strong development agenda, but criticized the fact that much of his focus has been on projects that benefit more upper-class than middle-class residents.

The mayor “is for the upscaling and luxurification of the city,” he said. “That’s his world view.”

Plus, while many aspects of the World Trade Center rebuilding effort now appear on track, which could add to the mayor’s legacy, years of costly delays could have been avoided if Bloomberg hadn’t punted the project early on to Gov. George Pataki, Muzzio said.

And, Muzzio had some advice for the mayor as he hashes out his final priority list: “How about rezoning the Bronx?” he asked. “A smart city might utilize the underutilized land there, which might lead to jobs.”