Stimulus Bill Brings Windfall to a Troubled Transit Project

The Senate continues to debate the federal stimulus bill in Washington today. If it passes in much the same form as it did in the House last week, the MTA stands to receive about $2 billion for capital projects. WNYC’s Matthew Schuerman looks at one place where the MTA will spend that money, and discovers it won’t create any more jobs, at least in the short term.

McVAY HUGHES: Here, let’s look here.

REPORTER: The corner of Fulton Street and Broadway has been blocked off with a blue wooden fence for months now. It’s the site of the future Fulton Street Transit Center, a nexus of 13 different subway lines, plus access to the PATH train to New Jersey. Catherine McVay Hughes is vice-chairwoman of the lower Manhattan community board.

McVAY HUGHES: There’d be a glass structure here. And inside of it there would be numer-numerous stairs and escalators so people could easily access the points they need to.

REPORTER: The glass box would stretch 50 feet high and be lined with retail shops. A glass cone, or oculus, was going to go on top, and bring sunlight down to commuters below. The project would also straighten out the confusing spaghetti bowl of ramps and platforms underground. The whole thing was supposed to cost 750 million dollars, paid for with money the federal government gave New York after September 11th.

McVAY HUGHES: You’ll be able to stand at street level and clearly see day or night because it will be an illuminated glass structure that this is clearly a transportation station.

REPORTER: But cost overruns have brought the real price to something more like 1-point-four billion dollars. A year ago, the MTA said it could finish the underground work … but needed to make the pavilion a lot cheaper. One official suggested it might just become an open-air public plaza. McVay Hughes says downtown residents wouldn’t necessarily have chosen such a lavish design. But they were offended when they heard it might be taken away from them.

McVAY HUGHES: It’s not fair to offer something to a community and then take it away.

REPORTER: But they really came to you with this pretty—

McVAY HUGHES: They came to the community with this plan, and we liked this plan. And therefore we’ve been willing to tolerate the years of disruption.

REPORTER: By that point, the MTA had already moved out 145 businesses… and demolished several buildings. The stimulus bill came along at just the right time.

SANDER: Fulton Street was funded with federal money, this will also be federal money.

REPORTER: The head of the MTA, Lee Sander, says he plans to devote 497 million dollars, about a QUARTER of the money the MTA expects to receive from the stimulus bill, to finish the Fulton Street Transit Center. The 50-foot-tall pavilion will be built … though the authority has not committed to the glass oculus. That would cost another 40 million dollars.

SANDER: We have to complete it. The reality is we are basically three-quarters of the way through. But I do not think it would be fair to say it is an inappropriate project or a bad project.

REPORTER: But there’s one catch. Work on the pavilion won’t start until the summer of 2-thousand-10. And it won’t finish until late 2-thousand-12 or early 2-thousand-13.

SANDER: We will be able to use the money for the contract that we’re ready to go with now and then flex that money to do the pavilion.

REPORTER: In other words, says Joseph Berechman, chair of the economics department at City College, the 497 million dollars will not create any new jobs, at least in the short run.

BERECHMAN: Basically they are taking one dollar from one coffer and putting it instead of another dollar but that in itself would not stimulate the economy.

REPORTER: Those new jobs won’t really kick in for a year and a half. The MTA says the jobs will still be valuable then. The Fulton Street Transit Center is in Congressman Jerrold Nadler’s district.

NADLER: If anybody thinks that this economy is going to be fully restored by the end of 2010, I’ve got a couple of good bridges to sell them.

REPORTER: It was Congressman Nadler who convinced his colleagues in the House to add $3 billion for transit projects.

NADLER: We’re still going to be needed to stimulate the economy and replace aggregate demand in 2011. I guarantee it.

REPORTER: Transportation advocates see an irony. While the MTA is keeping construction going on the Transit Hub, it’s making plans to cut 28-hundred transit workers. Kate Slevin of the Tri-State Transportation Campaign doesn’t blame the MTA. She blames Congress.

SLEVIN: Why are you going to hire a construction worker if you need to fire a bus driver?

REPORTER: Since the Reagan era, Congress has avoided giving money to fund the day-to-day operating budgets of transit agencies. And the stimulus bill is no different. But otherwise, the stimulus package gives localities a pretty long leash to decide which capital projects to finance. That’s why transportation agencies across the country are free to use federal money to finish projects that have gone wildly over budget, or to fulfill a promise to a community, or to get themselves out of other binds, with the money that is designed to get the country out of a recession.

For WNYC, I’m Matthew Schuerman.