February 12th, 2016
Ray LaHood, a retired Republican congressman who is not afraid to work with President Barack Obama or to praise Gov. Andrew Cuomo, has built a career on amiability with Democrats and tells the tale in his recent book, “Seeking Bipartisanship: My Life in Politics.” One of the few Republicans selected for Obama’s Cabinet, LaHood served as the secretary of transportation in Obama’s first term and has continued to work in that realm as a senior policy adviser at DLA Piper and as co-chairman of the Metropolitan Transit Authority’s Transportation Reinvention Commission in 2014. City & State’s Jeff Coltin talked with LaHood about relationships in Congress, raising the gas tax and the Tappan Zee Bridge project. The following is an edited transcript.
C&S: You’ve been somewhat critical of Obama for not staying committed to the bipartisan ideals that he ran on in 2008. Do you think that is something our next president would easily be able to change?
RL: You have to work at bipartisanship. And the way you work at it is by building relationships with people and by building friendships with people and using those relationships and friendships in a way that can enable you to either get legislation passed or resolve issues or tackle some of the big problems. Relationship building and friendship building, these are things that take time. It’s not something that you can do overnight. One of the advantages that some presidents have had is the fact that they’ve had relationships with members of Congress. It depends on who gets elected. If one of these people gets elected that’s served in Congress and knows people and has relationships, they have a huge, big head start. If somebody gets elected that really doesn’t know who the leaders are and has never really had opportunities to meet them, develop relationships, then it will take some time to do that.
C&S: Are you supporting a candidate in the Republican primary?
RL: I am, I’ve given money to Jeb Bush and I believe he’d be the best opportunity for Republicans to win back the White House. He was able to tackle, during his eight years as governor, some big, big problems in the state of Florida, which is a very diverse state. I like his position on immigration. We need to solve the issue of 12 million illegals living in our country, and it needs to be done in a comprehensive way. We need to tackle the issue of tax reform, which I think Gov. Bush obviously knows something about. And I also think we need somebody who’s going to keep this country safe – that’s a big issue for Americans. I think Jeb Bush offers the kind of experience of working in a bipartisan way in solving big problems in Florida, and I think he has the ability to do it in D.C. also.
C&S: The governor is considering and actually moving on some really big infrastructure projects. Do you think New York is a leading state on transportation issues, or do you need to see more action?
RL: Gov. Cuomo is a leader on transportation and infrastructure. I think he’s now putting his money where his words are. He talked a lot about improving transportation infrastructure when we were at the Department of Transportation; we were intimately involved in the Tappan Zee Bridge and we’re supportive of that project being funded, in part, at the federal level. I like the approach that Gov. Cuomo took in respect to LaGuardia; again, public-private partnership, not just relying on state or federal government, but also on private dollars. I like his approach on the Gateway Tunnel project. He’s probably set the standard as a state that’s a real model for tackling big infrastructure problems and doing it in a way that reflects that it requires not just public money, but private money, too.
C&S: Cuomo’s proposed Penn Station revamp is using, in large part, private money – and leveraging private money was one of the recommendations given by the MTA Reinvention Commission you co-chaired in 2014. Do you think that’s the best way to get long-stagnating projects to happen?
RL: There’s not near enough money in Washington or in the state of New York. You have to find the resources wherever you can, either from private dollars or from foundation money. Gov. Cuomo has been very creative in his approaches to tackling big infrastructure projects and funding them.
C&S: The Tappan Zee Bridge replacement is going to cost some $4 billion. How important are massive infrastructure projects like that to the state and the whole region at large?
RL: What infrastructure does is it creates jobs for the people that build the infrastructure, but it also creates economic development opportunities. When you build a bridge, you’re building a corridor of economic opportunity! When you build a roadway, that’s a corridor of economic opportunity. All along these large infrastructure projects, you see businesses locating, you see jobs being created. Not only jobs for the people that are building the infrastructure, but the jobs that are being created as a result of the infrastructure being there. Infrastructure is a win/win in terms of jobs, economic development, economic opportunities, and nobody understands that better than Gov. Cuomo and he’s really laid out a really big, bold New York.
C&S: On the national level, you’ve constantly pushed for Congress to raise the federal gas tax to pay for infrastructure improvements. Can you explain to New Yorkers, who pay the most for gas in the continental United States, why you think this is so important?
RL: The big pot of money that built all of the bridges in New York and the big pot of money that built the infrastructure in New York over 100 years was the Highway Trust Fund. And the Highway Trust Fund is a pot of money that has not been replenished for over 20 years. Everything in America has increased over the last 20 years except the Highway Trust Fund. And if we really want to have the opportunity to do big projects like what’s going on in New York, you need a big pot of money, and that’s the Highway Trust Fund. That can attract private dollars, and that can attract state dollars, but frankly, it’s broke because we haven’t raised it. It hasn’t kept up with inflation, and we should raise it, and we should get back in the business of helping governors and helping mayors fix up their infrastructure. America’s one big pothole because we haven’t had the money to really fix up our roads and bridges and the way to get back to that is to raise the gas tax and replenish the Highway Trust Fund, which will be an attraction for more private dollars.
February 5th, 2016
By MICHAEL M. GRYNBAUM
In a major reimagining of the New York City waterfront, Mayor Bill de Blasio is set to propose a streetcar line that would snake along the East River in Brooklyn and Queens, a 16-mile scenic ride that would be his administration’s most ambitious urban engineering project to date.
The plan, to be unveiled on Thursday in the mayor’s State of the City speech, calls for a line that runs aboveground on rails embedded in public roadways and flows alongside automobile traffic — a sleeker and nimbler version of San Francisco’s trolleys.
By winding along the East River, the streetcars would vastly expand transportation access to a bustling stretch of the city that has undergone rapid development — from the industrial centers of Sunset Park, Brooklyn, to the upper reaches of Astoria, Queens — but remains relatively isolated from the subway.
For Mr. de Blasio, a Democrat focused on social reform, the plan also represents a shift to the kind of ambitious Robert Moses-style planning that New Yorkers more often associate with his predecessor, former Mayor Michael R. Bloomberg, who made transportation a hallmark of his tenure.
The streetcar system, which would realize a long-held fantasy of the city’s urban planners, is expected to cost about $2.5 billion, significantly less than a new underground subway line, city officials said on Wednesday.
Its operation, however, remains far-off. Under the plan, construction would start in 2019, after studies and community review; service would begin several years after that, perhaps not until 2024, officials said.
Alicia Glen, the deputy mayor for housing and economic development, acknowledged “some significant engineering challenges when you are putting a modern system like this in a very old city.”
But Ms. Glen said the city’s existing transit network no longer met the needs of a metropolis whose commuting patterns have shifted significantly in the last two decades. A streetcar route, she said in an interview, offered a novel and practical fix at a time when federal money for infrastructure is scarce.
“The old transportation system was a hub-and-spoke approach, where people went into Manhattan for work and came back out,” Ms. Glen said. “This is about mapping transit to the future of New York.”
Streetcars are a staple of European capitals, and have arrived in cities like Atlanta; Portland, Ore.; and Toronto. But they have failed, until now, to catch on in New York, where the Bloomberg administration rejected a proposed line in Red Hook, Brooklyn, as being too expensive.
The de Blasio streetcars would travel about 12 miles per hour, with a trip between Greenpoint and Dumbo in Brooklyn lasting around 27 minutes, less than current routes on buses and subways. Barriers could physically separate the streetcars from automobiles along some portion of the route, although officials said those details would be determined later.
The cars would directly link Brooklyn and Queens, two boroughs that can be difficult to travel between without a detour into Manhattan. And though an exact route has not been made final, the system would most likely serve growing commercial centers like the Brooklyn Navy Yard and Long Island City, Queens. About 45,000 public-housing residents live a short walk from the route, the administration said, a priority for Mr. de Blasio, who has focused on combating inequities.
Because the cars would operate on city streets, the project is not expected to be subject to state approval — meaning it would not require the blessing of Gov. Andrew M. Cuomo, who last year was quick to quash a major State of the City proposal by Mr. de Blasio to build lower-cost housing over train yards in Sunnyside, Queens. (Mr. Cuomo said the yards, which are partly controlled by the state, were not available.)
The neighborhood review process for the streetcar route could be onerous, given the vast distance it would travel. But Mr. de Blasio can expect support from major developers, including Jed Walentas of Two Trees Management, whose residential conversion of the Domino Sugar refinery on the Williamsburg waterfront in Brooklyn is set to open soon. Mr. Walentas, who has both clashed and collaborated with the mayor, has championed the streetcar plan, helping to pay for a study on its feasibility and cost.
Mr. de Blasio, a self-proclaimed political ideologue, has acted more attentive of late to his mixed reputation as a manager, which could be a vulnerability as he looks ahead to a re-election campaign in 2017. His State of the City address is expected to include a plan for quicker trash pickup and a smartphone payment system for the city’s parking meters.
Transit has never been a passion for Mr. de Blasio, and while the mayor earned praise from transportation advocates for his Vision Zero safety plan, he was criticized after casually suggesting that the city tear out the open-air pedestrian plazas in Times Square.
On Wednesday, his embrace of the streetcar idea yielded positive reviews, even as some transit experts complained about wanting more details.
“The more mass transit we have, the better off we are as a city that is growing,” said Richard Ravitch, a former chairman of the Metropolitan Transportation Authority.
In his book, Mr. Ravitch said, the plan was “brilliant.” He added, “Not everybody’s going to ride bikes.”
February 5th, 2016
by Tom Allon
Cities — like the human body — are machines that need proper maintenance and repair.
New York City, the greatest metropolis in the world, looks great on the outside. There are gleaming luxury high-rise buildings, shiny new neighborhoods and energetic tourists everywhere.
But looks are deceiving.
Beneath the surface, there is urban rot. Our schools are in disrepair and built for the 19th century, not the 21st century. Our subways are antiquated, overcrowded and are becoming more unsafe. Our roads and bridges are barely hanging on.
In short, the infrastructure of our beloved town, like an 80-year-old who never exercised and smoked, is beginning to crumble. We do not have the money, the will or the foresight to make this an urgent cause.
Governor Andrew Cuomo, who is doing his best to become a modern-day Robert Moses, has feverishly announced a hodgepodge of new ideas throughout the state to upgrade our decrepit transportation system. His eagerness to do long overdue makeovers of Penn Station and LaGuardia airport are commendable. His call for more capital funding for the MTA – forcing the Mayor to kick in the city’s fair share – is also very necessary.
But the pundits are asking: where will the money come from for these multi-billion dollar construction projects? Who will pay for the unsexy work of modernizing our transportation hubs and the system that transports millions of people to work and school each day?
Well, there’s an answer right in front of our noses, but no elected leader dare utter it because it contains a dirty three-letter word: “gas tax.”
Because of the worldwide collapse of the oil market, New Yorkers are now paying barely $2.00 per gallon for gas, almost half as much as its one time peak. There are many reasons to believe this is the new normal.
I am not an economist, but I know that even a 25 cents per gallon tax on gasoline would give our elected leaders a bountiful supply of funds to begin the important work of rebuilding New York. This kind of user tax will not be onerous because all drivers know that the price drop in the past 18 months has been an unexpected boon.
But, of course, any mention of raising taxes is a third rail in politics. Even staunch Democrats like Governor Cuomo know that raising any kind of tax will evoke the ire of a big slice of their voters.
Nonetheless, it’s time to think big. If Robert Moses was able to build more than a dozen bridges, hundreds of public housing projects and thousands of acres of parkland almost a half century ago, we can rise to the occasion and fix our city’s crumbling infrastructure.
Like President Franklin Delano Roosevelt’s New Deal, the Governor of New York must articulate a comprehensive and well-thought out plan to justify this kind of a tax to help fund the bold projects on the table. He must give a realistic budget and timeline for each. He has to carefully explain the cost-benefit analysis so citizens can feel proud that every time they fill their car’s gas tank they are contributing to a better future for our kids and our City.
Here’s one example: if the MTA was able to replace the antiquated subway circuit system, our underground transportation would become 30 percent more efficient. That means more subway cars, shorter waits for commuters and fewer overstuffed cars. Let’s hear Cuomo and the head of the MTA detail what this will cost, how the gas tax can fund it and a reasonable timeline to accomplish these goals.
I would hope that Mayor de Blasio would join this crucial effort but so far he has not shown much interest in transportation and infrastructure. This is unfortunate because one important way to combat inequality is to give all city workers access to efficient transportation so they can get to their jobs as fast and comfortably as possible.
On a national level, our next president should also recognize how vital the rebuilding of our transportation grid has become. We should be world leaders in implementing bullet trains and modern mass transit; yet each year that passes we see China and Japan and Europe modernize their systems while we lead lives of quiet desperation.
It may not be as sexy as fighting crime or terrorism or trying to help the homeless and build massive amounts of affordable housing, but strongly committing to rebuilding our infrastructure will create new jobs, help our economy and make us all proud New Yorkers.
Let’s feel the fierce urgency of now and get those shovels in the ground.
Tom Allon, the president of City & State, NY, was a Liberal Party-backed candidate for Mayor. He can be reached at email@example.com
February 5th, 2016
The dog of a horse-carriage bill that Mayor de Blasio tried to ram through the City Council died as New York power players came to understand truths he tried to hide.
Regardless, after hunkering in his car for a flummoxed 16 minutes while carriage drivers protested outside City Hall Thursday, the mayor declared he was not done messing with the horses.
Despite overwhelming public opposition to banning the steeds and throwing drivers out of work.
Despite very limited appetite on the City Council to join in his one-mayor quest.
At this point, de Blasio’s obsession for carriage horses is nothing short of a mania. He appears to be irrational. But is he?
To find out, call a psychiatrist or call the FBI.
Clearly, de Blasio’s persistence traces to money.
In 2007, as a councilman, he spurned a carriage-horse bill. In 2008, animal-rights activist Wendy Neu gave $1,000 to his public advocate campaign.
For a time, de Blasio remained uninterested in efforts to rein in carriage horses. Even so, wealthy activist Stephen Nislick, founder of a group called NYCLASS, and likeminded others kept donating.
By January 2011, NYCLASS supporters had written $20,400 in checks to de Blasio’s treasury — and the then-public advocate came around to supporting an anti-carriage-horse drive.
Money continued to flow into his coffers: $45,350 by the mayoral election.
Then, in 2013, Neu, Nislick and NYCLASS poured $625,000 into a political action committee that was hammering mayoral rival Christine Quinn with powerfully effective negative ads.
Run the total: $670,000.
For that sum Nislick, Neu and NYCLASS surely want their money’s worth, and, hell, de Blasio is trying to give it.
Whatever a psychiatrist might ask about, an FBI agent would want to discuss the conversations surrounding payments and services rendered.
On the eve of his inauguration, de Blasio famously vowed to ban carriage horses entirely on Day One, but the Council balked.
The matter was presumed dead until the mayor suddenly concocted a so-called compromise to limit carriages to Central Park and build a taxpayer-funded stable there. Soon, the truths emerged.
The truth that de Blasio was moving to throw potentially hundreds of people out of work.
The truth that he was pressing to force some horses to work longer and harder and to send others to inevitable slaughter.
The truth that the terms of his purported “compromise” to move carriage horses into Central Park actually condemned the industry to death.
The truth that his negotiating partners in the Teamsters union verged on selling out their members under mayoral pressure.
The truth that he was bullying the Council into hurting working men, women and horses as naked payback to animal-rights activists whose lavish campaign spending was crucial to his election.
The truth that, with equal nakedness, he was trying to buy the Council by supporting their grab for excessive salary hikes.
Presented by the Daily News, the facts stopped the mayor from closing a sale that would have betrayed his renowned progressive principles. Jobs? Who cares about them?
De Blasio’s plan hinged on building the stable sometime in the next few years.
Immediately, though, carriage rides would be confined to the park under rules that would have slashed driver incomes.
And immediately, the city would have cut the number of licensed horses — and driven the four private stables that house the carriage horses at monthly fees out of business.
Then, no stables would mean no horses, and no horses would mean the death of the industry. Horse carriages would be gone, and that $25 million stable would be unnecessary.
Gloriously, labor revolted.
The Central Labor Council, representing 300 unions and 1.3 million workers, came forward to buck de Blasio.
John Samuelsen, president of Transport Workers Union Local 100, stood tall and said no way.
Both rose up against job losses in the carriage industry as well as among pedicab workers, whose access to the park would have been markedly trimmed.
In the end, Teamsters boss George Miranda pulled the plug on the “agreement in concept” that he had struck with de Blasio. And the Council refused to approve not a bill but a death warrant that would have stealthily achieved his ultimate goal.
“We will work toward a new path on the issue,” the mayor said after the 16 minute pause. Someone needs to diagnose why.
February 3rd, 2016
ALBANY, N.Y. — New York authorities are investigating whether the NFL is engaging in anti-competitive practices on its ticket-selling website, an official said Thursday.
The investigation is part of a larger probe by state Attorney General Eric Schneiderman into high event ticket pricing.
Schneiderman released a report Thursday that criticizes “price floors” for tickets, particularly by sports leagues, including the NFL.
The report says many NFL teams encourage or even require ticket holders to use Ticketmaster’s NFL Ticket Exchange platform, where the seller is prohibited from cutting the price below face value. That prevents lower prices when demand drops, making it harder for season-ticket holders to sell their tickets late in a season when their team is playing poorly.
An official with knowledge of the investigation said Schneiderman’s office is investigating and wants the price floor removed. The official wasn’t authorized to discuss it publicly and spoke on condition of anonymity.
An NFL spokesman said the NFL Ticket Exchange is just one of many options for ticket holders to buy or sell tickets.
“The NFL does not require them to use the Ticket Exchange,” Brian McCarthy said. “The NFL imposes no restrictions whatsoever on any fan’s ability to buy or resell tickets on other secondary ticketing sites or to do so at any price they choose.”
The report cited an example where the restrictions keep poorer fans from attending any games.
“Near the end of an unsuccessful baseball season, the tickets to watch a team not destined for the playoffs may go down sharply, allowing fans who otherwise might not be able to afford to see a match to buy tickets for far less money,” it said.
While ticket holders can sell elsewhere, they are pushed toward the official ticket exchange platform. The report said it “is frequently billed as the official resale site and the only’safe’ place to buy secondary NFL tickets.”
The report also said that the New York Yankees have also put in place a price floor.
A spokeswoman for the team said the Yankees Ticket Exchange is “a completely voluntary program” and a small percentage of the market.
“It is however the only place where a fan can be guaranteed a safe ticket,” Yankees spokeswoman Alice McGillion said.
February 3rd, 2016
By Gloria Pazmino, Dana Rubinstein and Sally Goldenberg
In a fight that is fracturing labor groups, the umbrella New York City Central Labor Council has decided to team up with one member union against another in an effort to stymie Mayor Bill de Blasio’s plan to limit the operation of pedicabs in Central Park.
The Central Labor Council, an organization that represents 300 unions and 1.3 million workers, is casting its lot with the Transport Workers Union Local 100, which is organizing the pedicabs that would be banished from the south end of Central Park as part of de Blasio’s horse carriage deal.
That pits the Council against Teamsters Joint Council 16, which represents the horse-carriage drivers and is supporting the de Blasio plan, which not only calls for shrinking the horse carriage industry and moving it to Central Park, but also banning pedicabs from the park’s southern, tourist-heavy precincts.
Both TWU president John Samuelsen and Teamsters president George Miranda are sitting vice presidents of the CLC’s executive board.
Multiple council members confirmed to POLITICO New York they have received calls from the Central Labor Council asking them not to hold a vote on the bill, citing the potential loss of jobs across two different industries.
The added pressure from the labor sector could further complicate things for council members as they make up their minds ahead of an anticipated Friday vote. Several members have declined to say on the record how they plan to vote on the horse bill. Others are holding out in case some sort of change is made to the legislation.
“They care about pedicabs and TWU,” said one member who received a call from the Central Labor Council and remains undecided on the horse proposal.
A labor source familiar with the calls told POLITICO New York the Central Labor Council push appears to be a “last minute attempt to get leverage for TWU.”
“For some members it’s created confusion. For other members it’s created a lot of resentment,” the labor source said.
Central Labor Council president Vincent Alvarez’s opposition to de Blasio’s horse carriage dealings go way back.
Alvarez, who has been making the calls directly, first came out against the horse ban legislation as originally introduced back in December of 2014.
“The New York City Central Labor Council will continue to stand with the hardworking men and women of the NYC horse carriage industry as they fight to protect and sustain the livelihoods of 300 working families,” Alvarez said as recently as this past December.
A spokesperson for CLC confirmed to POLITICO New York that their calls have been specifically “about the loss of pedicab jobs,” but declined to comment further.
Another council member who received a call from Alvarez, but asked to remain unnamed, said he was surprised to hear from the labor leader and in fact assumed he was calling to ask him to support de Blasio’s horse proposal.
“He’s a much more prominent labor figure in the city, and the mayor we know has very strong ties to labor, so I actually just assumed they wanted me to support it,” the member said. “They are concerned about the pedicab stuff.”
Alvarez’s move has angered senior de Blasio administration aides who are still working to corral the votes, even as the opposition grows louder.
On Tuesday, the chair of Community Board 5, which borders the southern end of the park where the horse carriages line up, and the board’s parks committee chair, sent a letter to de Blasio and Council Speaker Melissa Mark-Viverito decrying the plan.
“How is it that the Central Park Conservancy, which manages Central Park pursuant to a contract with New York City, was not involved in the discussions that led to this proposed agreement,” they wrote. “We cannot support legislation that has not taken their input and concerns explicitly into account.”
Meanwhile, pedicab drivers have been gathering at Transport Worker Union offices in Brooklyn to hash out how to fight de Blasio’s proposal.
“What we want to learn from TWU is how we save our industry,” Ibrahim Barrie, a pedicab driver who is part of the organizing effort, told POLITICO New York last week. “They have experience in this, have sued the city and so we are asking them for their support in protesting.”
On Tuesday evening, TWU’s president sent a letter to members of the City Council on Tuesday asking them to oppose the horse carriage legislation.
“This bill is anti-worker, anti-immigrant, anti-Democratic and absolutely unnecessary,” Samulesen wrote, adding that the bill will kill hundreds of jobs specifically in the pedicab industry, and arguing that the drivers not only provide a transportation service but also an important tourism service in certain areas of the park.
“They see themselves as your guides, not just transportation providers. They know where tourists want to go, and they say there is no business for them above 85th Street,” Samuelson wrote.
Wiley Norvell, a spokesperson for de Blasio said the administration remains committed to their proposal.
“We’ve worked in good faith with the Teamsters and Council Speaker to find the right approach, and we’re confident we’ll get it done,” Norvell said.
February 2nd, 2016
By Tara Jessup
Albany, NY – “The Labor Movement has a long and proud history in New York State, and that strength continues today,” said New York State AFL-CIO President Mario Cilento. “I’m pleased the latest numbers indicate our Movement is growing.”
According to the latest report by the Bureau of Labor Statistics, New York remains the most unionized state in the country, with 24.7 percent of the workforce belonging to a union, and in fact saw a slight increase in union membership.
“We are proud to add nearly 60,000 new members to the Labor Movement providing even more dedicated working people with good, solid, middle class jobs and an opportunity for a better life,” added Cilento.
“The Labor Movement provides the best way for working people to get ahead; particularly at a time when our economy is so out of balance. We remain committed to fighting for all working people to help grow the middle class,” said Cilento.
January 27th, 2016
By SUSANNE CRAIG
New York City’s pension system, which encompasses $160 billion in retirement funds, is rife with problems that leave it vulnerable to an “operational failure,” according to an independent report commissioned by the city comptroller’s office.
The report found that the city’s retirement system, the fourth largest in the country, needs additional resources, is understaffed and lacks many basic tools required to gain insight into the complicated risk embedded in its investments. Some managers rely on fax machines to send and receive vital information.
In some cases, the system, known as the Bureau of Asset Management, does not even have the internal controls necessary to ensure individuals cannot circumvent compliance, the report concluded.
“Operational risk is very high and an operational failure is likely,” the 398-page report, by Funston Advisory Services of Michigan, said.
Funston did not find any specific examples of mismanagement that had resulted directly in a loss of money. Still, the consultant raised a number of troubling issues that could cost the retirement system money, like the inability to properly identify portfolio risk.
When Scott M. Stringer, the New York City comptroller who has statutory oversight of the pension funds, took office in early 2014, he said it was apparent then that aspects of the retirement system were “hanging by a thread.”
He ordered an independent review of the Bureau of Asset Management, and in April 2015, Funston was chosen to conduct the review. Its report cost New York City $1.4 million, Mr. Stringer said.
On Monday, the comptroller presented the report to the trustees of the city’s five funds, which oversee retirement money for roughly 715,000 current and former police officers, firefighters, teachers and others. The comptroller hopes the findings will help spur change.
“Others have tried it but we are going to do it,” Mr. Stringer said. “There is no reason why New York City can’t lead the nation on fundamental best-practice reform.”
The retirement system has long been plagued by accusations that it has delivered inadequate returns and is in need of a management overhaul. The bureau has around 100 employees and hires Wall Street firms to manage its money. A 2015 report by Mr. Stringer showed that over the past 10 years, those managers took in billions of dollars in fees yet failed to meet fund benchmarks. More than a decade ago, another independent report also found fault with the way the system was managed.
Various politicians have tried to tackle the problems over the years, with mixed results. In 2011, Mayor Michael R. Bloomberg and the comptroller at the time, John C. Liu, unveiled an ambitious plan to consolidate the city’s pension plans.
Many of their ideas, however, never came to be. One obstacle: The five funds are governed by different boards, and getting consensus has proved difficult in the past.
Mr. Stringer, however, has recently made some changes to the retirement system, and said the five boards have been generally receptive. For instance, weeks after his election, he prohibited placement agents for investment managers from doing any business with the retirement system. Placement agents are middlemen who broker business for firms looking to manage money for retirement systems; several years ago, they were part of an ugly corruption scheme in New York State.
The comptroller also streamlined the meeting system for trustees, secured raises for some employees at the Bureau of Asset Management and hired Scott Evans, a former head of asset management for the retirement services provider TIAA-CREF, as chief investment officer of the pensions.
Mr. Stringer estimated that about 90 percent of the changes Funston recommended could be made without the approval of the trustees. But trustee support is important, and would be required if Mr. Stringer needed money from the five funds to finance any changes.
All in all, the Funston review made more than 200 recommendations, many underscoring the fact that the retirement system has not kept up with the times.
For example, the report noted that the complexity of the system’s assets has exploded in recent years, as more money has been invested in hedge funds and private equity.
But the report found that there were just two people monitoring the $10 billion that the system has invested in private equity. “It is not possible for two individuals to monitor nearly 200 partnerships from 115 managers in a manner so as to properly fulfill fiduciary responsibilities,” the report concluded.
Mr. Stringer estimated it would take five to 10 years to get the Bureau of Asset Management to where it needs to be. The report concluded the bureau currently “has little or no capacity to implement many of the recommendations of this report.”
Still, Mr. Stringer said he believed many of the changes could be made within the system’s existing budget, saying in many cases the Bureau of Asset Management simply needs to redeploy resources and re-engineer certain processes.
January 26th, 2016
A new NYU Furman Center report examines the possible impacts of New York City’s new 421-a program on housing development in different parts of the city. It finds that the future of the program could have a significant effect on the feasibility of housing construction in certain neighborhoods in New York City.
The report, The Latest Legislative Reform of the 421-a Tax Exemption: A Look at Possible Outcomes (PDF), considers the possibilities that the program will expire or continue based on an agreement between the real estate industry and construction trades. Using financial analysis, the report examines the program’s future across different market types, including neighborhoods where rents and sale prices are far lower than in the Manhattan core.
The report finds that expiration of the 421-a program could lead to a disruption in the supply of housing by market-rate builders. While there would likely be no change in construction in areas currently dominated by condominium development, like portions of Manhattan, there are parts of the city where the production of mid- and high-rise buildings might be disrupted while land prices adjust. In these neighborhoods, once development resumes, new development may tend toward condos rather than rentals.
The report also explores what might happen if the newly revised 421-a program goes into effect in 2016 without any increase in construction costs. This analysis shows that, compared to what the existing 421-a program might have created, there are likely to be more affordable rental housing units, but some of these units could be serving higher-income households.
In portions of the Manhattan Core, condominium development without the 421-a program may continue to dominate, though the program appears to make rentals more attractive for developers who focus on the longer tax exemption period and less on near-term operating income. Elsewhere due to the lengthened property tax exemption, rental development with the 421-a program would be more attractive than it is now by some measures, even in parts of the city where no affordable set-aside is currently required.
Finally, if construction costs increase, the report notes that the development of rental housing could become more expensive. If this were to happen, the government would have to increase the level of other subsidies to cover the increased costs, thus restraining the type and amount of affordable housing that can be produced with a given amount of government resources.
The Latest Legislative Reform of the 421-a Tax Exemption: A Look at Possible Outcomes (PDF) is now available for download.
Read more in the NYU Furman Center’s five-part series, Housing for an Inclusive New York: Affordable Housing Strategies for a High-Cost City.
January 23rd, 2016
New grand entrance, hotel, retail and office space part of $3B plan
by David Klepper
The $3 billion vision for Manhattan’s Penn Station includes more light, a new grand entrance, added retail and office space and even a hotel — all part of the plan to transform the cavernous rail hub that Gov. Andrew Cuomo on Friday called “a blight on the greatest city in the world.”
The new details emerged from a request for proposals issued Friday by Cuomo, Amtrak and the Metropolitan Transportation Authority. Submissions from developers interested in taking on the project are due in April.
The plan described by Cuomo calls for reinventing the historic James A. Farley Post Office as an extension of the station across the street, to be named the Daniel Patrick Moynihan Train Hall in honor of the late U.S. senator. The train hall would have a sprawling skylight and a passenger area similar in size to the main concourse at Grand Central Terminal, and would have adjacent space for stores, offices and perhaps a hotel.
Meanwhile, a new grand entrance for the complex would be built along 8th Avenue in front of Madison Square Garden, requiring the demolition of the venue’s smaller theater but leaving the rest of the arena intact.
It’s not the first time ambitious redesigns have been floated for the cramped transit hub, which serves more than 650,000 passengers daily on Amtrak, Long Island Rail Road and New Jersey Transit lines. Developers Related Companies and Vornado Realty Trust were working on plans for the post office for a decade before the project fell apart.
As envisioned by Cuomo, the developer would pay for much of the work in exchange for a long-term lease giving them commercial rights to the complex.
“For too long Penn Station has been outdated and overcrowded, serving as a blight on the greatest city in the world,” Cuomo said in a statement announcing the request for proposals. “We’re changing that, and we begin today.”
Developers interested in the project should have experience in “large-scale commercial and retail development, as well as experience incorporating public transportation facilities into private development projects,” according to the request for proposals.
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