By Michael Musto
By Capt. James Van Thach told to Jonathan Wei
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By Michael Musto
By Michael Musto
The strongest boast that Team Bloomberg brought with it into office three years ago was its business skills. Coach and captain Mike Bloomberg, a multibillionaire, made his own fantastic fortune with a keen eye for financial trends. Deputy Mayor Dan Doctoroff, who has quarterbacked the administration's big plays, also grew rich guiding investment opportunities. Economic Development president Andrew Alper likewise became a millionaire several times over as an investment banker.
All three came into city government in 2002 supremely confident of their skills and so secure about their own well-being that they declined to take salaries.
We're rich because we're smart, the message went, and we'll do for the city what we did for ourselves. And you won't even have to pay us.
Which is why it was so confounding last Thursday, as the board of the Metropolitan Transportation Authority voted to accept the New York Jets' $250 million bid for the West Side rail yards, to reflect that only two months ago the business whizzes at City Hall were declaring themselves in favor of the Jets' original $100 million offer.
The rail yards were worthless without a platform built over them, City Hall said, and only government would be willing to provide one. Critics who thought otherwise just didn't understand real estate, Doctoroff repeatedly insisted.
And then Cablevision, owner of the rival Madison Square Garden, turned things upside down, offering not only to pay a much higher price$300 million, later hiked to $400 millionfor the yards than the Jets, but also offering to pick up the more than $300 million tab for the platforms as well.
Cablevision's bid evoked ridicule from the businessmen at City Hall. "It's just a joke," said the mayor. "It's a PR stunt cooked up by some people who have no interest in this city."
Doctoroff said the MTA should just ignore Cablevision's offer. It had already signed a memorandum of agreement with the Jets, the deputy mayor said, hence it was under no legal obligation to consider it.
MTA chairman Peter Kalikow, of course, wisely opted to reopen the bidding. And even though the new competition was a rushed game played on a vastly uneven playing field, it had the effect of potentially doubling the transit system's earnings in the short run.
The Jets, angry and embarrassed, quickly multiplied their base bid to $250 million. The team later joined up with a half-dozen developers with close ties to City Hall (see related story) who said that they were willing to shell out almost a half-billion dollars for the air rights above the new stadium.
The point about the city's breathless rush to get the stadium deal doneregardless of the pricewas hammered hardest at the MTA hearing last week by City Council Speaker and Democratic mayoral contender Gifford Miller.
"We should remember that when we began this discussion about the Hudson Yards, Mayor Bloomberg was fully prepared to let the Jets pay $100 million for land that we now know is worth at least 10 times that," said Miller. "Of all people, the mayor should have known that this was bad business."
At a press conference following the vote, city budget director Mark Page, the Bloomberg administration's senior appointee to the MTA board, was asked if perhaps the city owed a debt of gratitude to Cablevision for having forced the Jets to more than double their original price?
Page hesitated, scowled, and then muttered in a barely audible voice, "You could say that."
Abetted by tabloid editorials, Bloomberg and the Jets declared the MTA vote a crucial victory. (Doctoroff wasn't around to celebrate because, as WNYC radio's Andrea Bernstein reported, he was in Brisbane, Australia, for an Olympics meeting.) But the lopsided 14-0 vote by the MTA board only guaranteed that a new legal challenge would be mounted.
"This was supposed to be about the money," Cablevision attorney Randy Mastro argued before the board. On that score, he said, Cablevision's offer was clearly superior: The owner of the Garden had offered to pay $400 million at closing; the Jets' $250 million bid, spread over the next four years, was worth just $210 million when inflation was factored in.
The bigger problem, Mastro said, with a nod at the likely substance of a lawsuit his client will file against the board, was that the board had violated its own rules by accepting a bid that hinged on a speculative rezoning scheme under which the board said it will sell a massive 4.4 million square feet of air rights to developers.
"There is no precedent for such a wholesale, massive transfer of air rights," Mastro told the board. The scheme, he said, "smacked of an illegal sale of rezoning."
If so, it wouldn't be the first time the MTA ran into trouble on that account. Twenty years ago, the transportation authority tried to sell one of its most valuable assets, the old Coliseum at Columbus Circle, to real estate developer Mort Zuckerman. With the city splitting the sale proceeds, the Koch administration agreed to boost the zoning, allowing for a colossal project and a bigger acquisition price. Opponents, led by Philip Howard of the Municipal Arts Society, sued, winning a crucial decision voiding the sale.
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