Forum on Local Government

Yesterday the Port Authority of New York and New Jersey (a delightfully powerful and complex bi-state authority) announced the selection of the architecture firm Rogers Stirk Harbour + Partners to design an office tower on top of the Port Authority Bus Terminal on Manhattan’s west side. The design team, formerly known as Richard Rogers Partnership (which has designed projects including Barajas airport in Madrid, the Centre Pompidou in Paris, the Millennium Dome in London and, for all you lawyers – the European Court of Human Rights in Strasbourg) will be working for 20 X Square Associates, a joint venture of Vornado Realty Trust and affiliates of Lawrence Ruben Company.

For any who have traveled through the Port Authority’s bus terminal, such a redevelopment – which is slated to upgrade bus gates, improve circulation in the terminal, create new retail spaces and give an overall more modern look to the terminal – is a welcome announcement. All the improvements to the terminal will be done beneath a brand new 1.3 million SF office tower, built with the terminal’s unused air rights. The developers will lease the air rights from the Port Authority for 99 years under rental terms that have already been established (a fixed rent to the Port Authority of $344.5 million or $265/SF for the 99 year period as well as a percentage of the net operating income). Such income will be much valued by the Port Authority, which is responsible for PATH train service, the region’s three airports, the cargo port of New York and New Jersey as well as the redevelopment of the World Trade Center site in Lower Manhattan.

This project has been in the works for more than ten years, with many stops and starts along the way. Though selection of an architect means the project is still months and likely years away from really getting underway, it is hard not to wonder whether there is any market for more Class A office space in midtown today. Across the street from the bus terminal, SJP properties has just topped out its 1.1 million SF commercial and retail tower at 11 Times Square. That project, built on spec, is expected to be completed by January 2010, but there are still no reported tenants. Will the Port Authority tower face a similar fate? Or is it far enough off in the future that we can expect better things for New York’s real estate market?

http://www.panynj.gov/AboutthePortAuthority/PressCenter/PressReleases/PressRelease/index.php?id=1154

http://www.observer.com/2008/real-estate/11-times-squares-concrete-core-all-set

Buffalo, NY has a lot bigger challenges than finding a way to keep the Bills (or for that matter finding a way for the Bills to win a game against a divisional rival). An estimated 30% of Buffalonians live in poverty, and a huge chunk of the housing stock is vacant while there is also a dearth of affordable housing for the poorest city residents. There is a fantastic organization run by a recent HLS alum, Aaron Bartley, called PUSH Buffalo (http://pushbuffalo.org/default.htm) which, among other things, is working to convert abandoned and blighted real estate into affordable housing. PUSH seems to have an interesting model, which includes some advocacy and lobbying and other direct services like the provision of co-op housing arrangements to encourage housing ownership among the poor, and the FLoG Blog hopes to bring Aaron in for a guest post sometime soon. 

There is also a proposal on the table for the city of Buffalo to become a “living laboratory” to solve the vacant housing crises. http://www.buffalonews.com/home/story/448343.html. The proposal includes many different initiatives all to be centrally coordinated at the University of Buffalo, these initiatives include the creation of regional development authorities and incentives for businesses that build green buildings and create green jobs. (You can read more about the living laboratory project here: http://www.lisc.org/buffalo/assets/asset_upload_file503_10740.pdf). The proposal seems to want to draw in the talent and the money (from federal and state government) that would be needed to tackle the problem. The remaining question is whether the city (or more accurately, the region) will have the legal authority and the political will to implement these proposals. It is unclear whether the state economic development statutes will allow the local Industrial Development Agencies to merge into a regional authority, and even if this merge can happen, it is unclear whether the political willpower will exist to seek regional cooperation. Aaron Bartley may have put it best:  “The question remains whether our leaders in the public and private sector, who have failed so miserably to address the problem thus far, will recognize the need for regional cooperation and a less parochial outlook on development matters”

Back with more on Buffalo in the coming weeks. . . 

There’s obviously been some huge news today on the federal government front. Over here at the FLOG blog we’re still pretty interested in seeing what sort of urban policy President-Elect Obama will push in his administration. (see post below on Obama as a “metropolitan president”).

An indirect influence that Obama’s election may have on cities is that it may make municipal bonds more desirable to investors. There has been some indication that local governments were concerned about their ability to find buyers for their bonds (http://www.rockymountainnews.com/news/2008/oct/02/credit-crunch-starts-to-be-felt-in-colorado/), this problem may be mitigated by the fact that many taxpayers in the highest bracket are likely to see their taxes go up under the new administration. This may provide an increased incentive for these taxpayers to invest in state and local bonds. Not only will these taxpayers be able to receive interest off of these bonds tax free, but, according to the Wall Street Journal, buyers should not fear that local governments will default because this possibility has already been priced into the bonds. 

http://online.wsj.com/article/SB122584138055498903.html

It is unlikely that there are enough wealthy muni buyers for the interest rates on local bonds to go down dramatically any time soon, but this seems like it could mean a slightly more stable financial situation for some local governments. 

Two interesting articles on public school options and parental choice vis a vis zoning and charter schools in New York City:

Happy Election Day, everyone. 

As people across the country head to the polls, we know what will be on their minds: proposed revisions to municipal charters.  Will Baltimore create a Department of General Services?  Will the Commissioners of Miami-Dade County get an $85,000 raise?  Will Philadelphia combine its Parks and Recreation departments into one?  Esoteric though the questions may be, their answers will have a substantial impact on the how these local governments function for years to come. 

In Philly, the separation between the Fairmount Park Commission and the Department of Recreation has long been a source of frustration and inefficiency.  A 2004 strategic plan tried to redefine their roles, but in 2008 the lines of authority remained blurred.  Today, it’s up to the citizens of Philadelphia to fix the problem — because their elected representatives don’t have the power to do so.

In the midst of New York City’s term limit saga, it’s easy to get the wrong idea about municipal power.  Though the Mayor and Council of New York City can give each other another crack at their offices (over the repeatedly expressed will of the voters, no less) the same actors in Philadelphia can’t even merge two related agencies.  They can only put the question on the ballot.  I suspect that the average Philadelphian would be as surprised to learn what his government couldn’t do as New Yorkers were taken aback to learn what their government could.  And there are many more cities in Philadelphia’s position than there are in New York’s.

Direct democracy may once have looked like a bulwark against urban political machines, but today it’s a curiosity and a hindrance more often than not.  When voters are not invested in the ballot questions before them, their votes are necessarily arbitrary.  And they can produce some strange results.

Just ask California.

— JB