Port Authority said to still want to develop Moynihan Station

Authority wants to take over mega-project even after recent WTC debacle

The Port Authority is still exploring a potential role as developer of Moynihan Station, despite recent revelations that the mega-project the authority is currently overseeing, the rebuilding of the World Trade Center site, is likely billions of dollars over budget and years behind schedule.

The problems at the WTC site, which have been compounded by the complexity of the development and a sharp rise in the cost of construction, has also brought the Port Authority’s ability as a manager of large, complicated projects under scrutiny.

But a person familiar with the Moynihan Station plan said that the state has been forced to continue contemplating the Port Authority in a principal role because the authority remains one of the few entities with spare cash to provide funding for the multibillion-dollar station project.

Officials have struggled with finding where the billions necessary to pay for the Moynihan plan’s exorbitant cost will come from, especially now that the economy has entered what could be a pronounced slowdown and tax revenues have fallen. 

The sweeping proposal to redevelop the city’s busiest transportation hub was envisioned to include, up until a few months ago, converting the eastern section of the Farley building into Moynihan, revamping Penn Station, relocating Madison Square Garden to the western annex of Farley and erecting office towers and retail space in place of MSG – all at the staggering cost of at least $14 billion.

But the plan has been in limbo since the project’s glaring shortage of funds ground progress to a halt and MSG backed out the deal in favor of renovating its existing facility, frustrated with the continuing uncertainty.

The source told rew-online.com that state officials are now putting together a scaled back version of the plan that will include the construction of Moynihan and some kind of improvement to Penn, perhaps by relocating the WaMu Theater on the Eighth Avenue side of MSG to open the station to daylight and allow for additional retail space.  It remains to be seen if a plan will include development of the western annex of Farley. 

But to the consternation of some officials, including Mayor Bloomberg, the Port Authority may be put at the center of that development effort despite its recent setbacks at the WTC site.

One problem however is that the Port Authority may not be the cash cow that Moynihan stakeholders have hoped.  Besides the additional costs the Port Authority may have to assume at the WTC site, the authority may have to provide more funds towards the ARC tunnel being constructed under the Hudson River for New Jersey Transit.  

Potentially placing further strains on the authority’s financing is the slate of massive transit projects underway that are facing shortfalls or are in need of additional cash and are eyeing the Port’s funds.

The MTA is facing what appear to be dire deficits in its next capital plan, which includes spending on East Side Access, a construction project that will bring Long Island Rail Road service to Grand Central Station and the Second Avenue Subway.  Both of those projects need additional money. 

Richard Ravitch, a former chairman of the MTA, was tapped earlier this year to lead a panel to explore funding options for the MTA.  Our source said that Ravitch is likely to suggest raising fares, which the MTA has already announced it is considering, and tapping the Port’s money.