Schumer and Nadler Tip o' The Spear For Transit

From Bloomberg:

The Democrat’s amendment to the bill would increase funding to $14.9 billion from $8.4 billion, including $2 billion for capital transportation needs, $2 billion for railways and $2.5 billion for new transit projects.

The extra funding may mean hundreds of millions dollars more for New York City transportation, Schumer said. The region typically gets about a fifth or more of federal transportation spending, he said.

“We want to make sure that this stimulus plan helps mass transit as well as highways,” Schumer said in a press conference outside Grand Central Terminal today. “We all know how important it is to help mass transit; it’s the lifeblood of our metropolitan area.”

I'd like to see more efforts like this from the rest of our delegation.

Bear in mind, these funds are strictly for capital improvements . . . this will do nothing to plug the gap in the operating budget. For that we need our City and State elected officials to act.

Mayor Bloomberg and City Council members: Act now to transfer the city-owned bridges to the MTA so that all river crossings can be tolled at parity. This would (1) raise vital reliable funds for transit, (2) reduce traffic congestion and (3) eliminate perverse incentives for motorists to avoid, e.g. the Battery Tunnel and create traffic bottlenecks at free crossings such as the Brooklyn Bridge.

Governor Paterson, State Senators and Assembly Members: Bring back the commuter tax and dedicate these funds expressly for transit and retirement of transit-related debts, when possible. Enact legislation to allow NYC to institute a residential parking permit program, again with permit fees dedicated to transit.

The MTA has plenty of faults, but the root cause of the current crisis was the failure of the State and City to adequately fund capital needs. Instead, MTA investments were paid for with debt, and that debt burden is now crushing the MTA. Thank you, George Pataki, Rudy Giuliani, and yes, Mike Bloomberg.

We are at a crisis point; we need our politicians to step up and show some real leadership on this issue. Otherwise, as one less than venerable statesman put it in another context, this sucker's going down.

National High Speed Rail: New Site

Via Streetsblog, there are some great new posts up at The Transport Politic for those who fantasize about an adequately funded, well designed high speed rail network in North America. Check out them out here and here.

By national of course, we're really talking more about a series of connecting regional systems. The possibilities are really incredible if we make this a priority. A great way to reduce our reliance on imported oil, as well as free up capacity at airports for those flights that are not practical even with high speed rail (coast to coast, most international).

More on this later. And while we're flogging Transport Politic's posts, Senator Schumer has expanded on Congressman Nadler's efforts to increase transit funding in the stimulus package. Still only crumbs, but gradually improving.

Tishman-Speyer and Stuytown/Peter Cooper Village

New York magazine has a long and fascinating article on the genesis of one of the most regrettable real estate deals in history.

I wish I could have seen my face when this deal was originally announced. I can remember shaking my head in shock at the price T-S paid. One must, however, tip their cap to the faceless MetLife exec who was on the other side of the table. MetLife sold at the absolute top of the market.

This is a perfect example of asset prices inflated beyond all reason when credit lending standards were virtually abandoned over the last 8 years.

UPDATED:
I wasn't clear enough above - this deal is not so much regrettable for Tishman-Speyer; they actually had minimal skin in the game. But their investors are going to get hosed. This deal really is a poster child for the excesses of the financial industry of the last 8 years:

According to people with knowledge of the deal’s structure, Tishman Speyer contributed $56 million of its own money to the $5.4 billion purchase price and didn’t use any of its other properties as collateral. “Jerry is a lover of nonrecourse debt and other people’s money. He liked deals where he could contribute sweat equity,” one real-estate investment banker says. “They have so little money in, and they make so much in management fees, they have nothing to lose when it goes under,” a former Tishman Speyer staffer said.

The financing for the Stuy Town deal was facilitated by a fast-talking Wachovia banker named Rob Verrone. During the bubble years, Verrone became a symbol of the risk-taking that helped inflate the Manhattan market, and in real-estate circles he was dubbed “Large Loan Verrone.” From his table at San Pietro, Verrone held court and pitched Wachovia’s commercial-lending division to real-estate magnates like Donald Trump and Harry Macklowe. Verrone raised more than $4 billion for Stuy Town. Another $500 million came from Merrill Lynch.

The game was really one of hot potato. Wachovia put $1 billion of the bank’s money into the Stuy Town deal, but the neat trick was that Wachovia sold the debt to investors. Hundreds of millions of dollars of Stuy Town’s equity is actually held by a Korean investment fund and CALPERS, the giant California retirement fund, among others. Wachovia also bundled Stuy Town’s $3 billion mortgage in a $7 billion bond offering. Another $1.4 billion tranche of financing, known as “mezzanine debt,” is held by investors including the real-estate firm SL Green and the government of Singapore.

$56 million down with no recourse - that's nearly 100X leverage!! No wonder T-S bid so high, they offloaded nearly all the risk to fools. $56 million cap on the downside and unlimited upside if bubble economics continued for a few more years. Unbelievable.

What's At Stake: Bus Cuts in the 39th

The document below discusses the potential service cuts in our district if MTA funding needs are not met. In addition, we could say goodbye to meaningful upgrades for the foreseeable future. And then there is always the issue of fare hikes.

Proposed MTA Service Cuts - 39th District - Free Legal Forms
I understand that drivers do not want to pay to cross the bridges. It's a resource that has been underpriced for so long, it feels like an entitlement. The reality is we desperately need financing for mass transit in this city. Tolling the "free" river crossings and reinstituting the commuter tax are necessary measures required to keep transit fares low and maintain service levels.

Some argue that bridge tolls are regressive; this is disingenuous. The vast majority rely on transit, especially the poor, the young, and the elderly. If you want to see truly regressive funding policy, it's called a fare hike.

Nadler Amendment Passes - More Funds for Transit

Some good news anyway. $3 billion is not much, but it is a step in the right direction.

Action Item: Call Your Rep for More Transit Stimulus

From my mailbox, an urgent request - and a good one - kudos to Nadler for introducing this amendment:

Tomorrow, the House of Representatives will vote on an essential economic stimulus bill, desperately needed to help turn the economy around from the Bush recession. The $825 billion dollar legislation includes many strong provisions for health care, clean energy, education, middle class tax cuts and unemployment insurance. However, one key piece of our infrastructure, mass transit and high-speed rail, has been shortchanged in the stimulus. Only $10 billion has been allotted to improve the backward, crumbling mass transit and rail systems upon which tens of millions of Americans rely.

Fortunately, we have a chance to increase rail funding in the stimulus package. Approved for a floor vote just today, Rep. Jerrold Nadler's (NY-08) amendment would fund the New Starts program, with $1.5 billion each for the Transit Capital Assistance and the Capital Assistance Grants programs.

Please call the Congressional Switchboard at 202-225-3121. Ask for your representative, and ask them to vote yes on the Nadler amendment, which is amendment 70 for H.R. 1.

The House will begin consideration of H.R. 1 tomorrow morning, Wednesday, January 28th at 10am ET. If you're unable to contact your representative's DC office before the close of business today, or in the morning tomorrow before the voting, you can also leave a message on your representative's office voice mail after hours.

Thank you so much for your fast response!

In solidarity,

Chris Bowers, BlogPac

MTA Public Hearing on Service Cuts - Wednesday Night

This is a big one people. AS discussed at last month's CGNA meeting, Carroll Gardens and the 39th District as a whole are facing severe mass transit cuts. Tom Gray of Bill deBlasio's office sent the following notice (excerpted) to the CGNA listserve:

The MTA has proposed eliminating entire bus lines that service
District 39, as well as overnight and weekend service. In addition,
the MTA proposes to close station agent booths at a variety of
locations throughout Brooklyn, potentially compromising the safety of
riders.

• The B16, B23, B37, B75 Could be eliminated entirely. The B71 could
lose weekend service. And overnight service could be cut on the B67
and B77.

• Station Agents would be cut from the Metrotech end of the A, C and F
station at Jay Street; the west side of Flatbush Avenue entrance to
the Bergen Street 2, 3 station; the southbound F and G station
entrance at Bergen Street; the northbound entrance to the Carroll
Street F- and G-train station; and the entrance to the Borough Hall 2,
3, 4 and 5 trains at Court and Joralemon streets.

• Reduced frequency of service weekends on F and R and increase
crowding during off-peak on F, R, 4 and 5

• The total elimination of M service between lower Manhattan and
Bensonhurst (That means 16 fewer trains on the 4th Avenue line during
the rush hour mornings; and 12 in the p.m. rush. As a result,
rush-hour waits will double and crowding will greatly increase on the
R.)

• The G would terminate at Court Square all the time (now goes from
Smith-9th to Forest Hills on weekends, nights)


On top of these cuts, the MTA is proposing a variety of fare hikes,
including: increasing the base fare of train and bus rides to as much
as $3, increasing express bus fare to as much as $6.25, and increasing
the price of Unlimited Ride MetroCards to as much as $9.50 for a 1-day
card, $32 for a 7-day card, $60 for a 14-day card and $105 for a
30-day card.

It's important for residents to show up at this meeting and let the MTA know that these cuts are intolerable. I'll be there and I hope to see a sizable contingent there from Carroll Gardens, Cobble Hill, Gowanus, Park Slope, Kensington, Windsor Terrace, and Boro Park. All of us will be impacted by these cuts, and the burden will fall hardest on the elderly, students, and those with difficulty negotiating the subway system. Basically, anyone who relies on the buses to get around will be seriously impacted.

It's not enough just to complain about service cuts. We need to be realistic about the finance problem the MTA is facing: the City and State have shortchanged transit for years, leading to massive debts at the MTA. The debt service payments are choking the MTA budget. We need to have steady, reliable and larger revenue streams to not only run the system, but also expand it and keep up the state of good repair. Raising fares on riders yet again is NOT the answer.

Their are many proposals out there, but the two that will raise the most funds while remaining equitable are (1) tolling the East River crossings and (2) bringing back the commuter tax.

Let your elected officials know that we need reliable, robust transit funding. We won't get it unless we demand it.

MTA Public Hearing on January 28th, 6pm – 9pm
at the Brooklyn Marriott, 333 Adams Street