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Releases & Statements
Once again, the MTA is sabotaging itself. Despite a desperate need for revenue, Chairman Kalikow is ready and willing to make a sweetheart deal with the Jets, giving away the air rights to the Hudson Rail Yards for a fraction of what they’re worth.
The parties would like us to believe that they are far from an agreement on the value of the air rights, but that’s a spin job designed to make the eventual outcome seem like a victory for the MTA . The facts indicate that Chairman Kalikow is putting backroom politics above good business sense.
When a businessman wants to sell a piece of property, he solicits competing bids, then accepts the highest offer. The MTA has sole-sourced the bidding process, giving no one but the Jets a chance to participate.
A businessman bases his asking price on the value of the entire property, regardless of how much of it the buyer intends to use. The MTA is giving the Jets a $300 million discount because they are choosing not to develop a portion of the rail yards and another $300 million discount to compensate for the cost of building a platform, even though Mayor Bloomberg has said the City would pick up that cost. The MTA ’s own independent appraiser says the air rights are worth $1 billion, but it’s asking for less than a third of that.
A businessman doesn’t flinch when a potential buyer tries to lowball him. The MTA is considering binding arbitration, a move that would virtually assure a final deal somewhere between its $300 million asking price and the Jets’ absurd $100 million offer.
Chairman Kalikow is clearly in breach of his fiduciary duty to secure the best possible price. Permission to build over the yards is critical to the Jets’ plan for a stadium in Manhattan . Therefore, the MTA is in a strong bargaining position, able to demand a fair price that will help ease the strain on its unbalanced budget. Instead, Chairman Kalikow is bending over backwards to make a deal that will be amenable to Mayor Bloomberg and the Jets. He is shirking his responsibility to the New Yorkers who every year are expected to pay more for a lower quality of bus and subway service.
It is scandalous that State officials had to subpoena the MTA to get a hold of its appraisal. Once again, the redevelopment of the West Side is under a cloud of secrecy and bad faith. While the Jets look out for their own interests and Mayor Bloomberg and Chairman Kalikow look out for the Jets, no one is looking out for the New Yorkers who will have to live with the consequences of this murky, slanted process. They will have to live with an enormous, costly stadium on the West Side and they will have to live with an MTA that can’t even begin to pay its bills. Their interests must be protected.
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