Tax conversion plan could help establish rail link for Lower Manhattan

Late last week, President George W. Bush approved a proposal put forth by Mayor Michael Bloomberg and Gov. George Pataki to convert $2 billion in unused tax benefits allocated to Lower Manhattan after 9/11 into funds for other key downtown rebuilding projects. With President Bush backing the proposal, Lower Manhattan could now be closer than ever to the creation of a direct rail link to JFK International Airport and Long Island.

In the months following the attacks on the World Trade Center, President Bush and Congress approved a $20 billion aid package to New York, $5 billion of which was allocated as tax incentives to spur redevelopment in Lower Manhattan. While the tax incentives aided greatly in stabilizing the economy in the immediate aftermath of the attacks, a significant portion remains unused. To stimulate future economic growth downtown, the mayor and governor have asked the federal government to allow New York to "cash in" the unused portion for funds that can be spent instead on improving the downtown transportation infrastructure. 

"By improving regional access to Lower Manhattan, we can continue the area's dramatic rebirth from the attacks of September 11^th, and ensure its future as an economic engine for the entire city," Mayor Bloomberg said in a statement.

Presidential approval for the tax conversion plan came as the result of a concerted effort by the mayor, governor, key rebuilding officials, and downtown business executives to show that the redirection of unused tax benefits toward the creation of the new rail link for Lower Manhattan holds the greatest promise for the dynamic revitalization of an area still struggling to recover from the events of 9/11.

"The establishment of a new rail link will go a long way toward reinvigorating the downtown economy," said Gov. Pataki in a statement. With the president's backing, hopes are high that Congressional approval, too, will soon be won.

In seeking Bush's endorsement, proponents of the proposal set out to make clear just how necessary a direct rail link is to Lower Manhattan's revitalization. Mayor Bloomberg has held, since the presentation of his Vision for Lower Manhattan in December 2002, that better access to area airports would have a significant impact on the downtown economy. Gov. Pataki, in a speech this past May, made a direct appeal to Lower Manhattan business leaders for their help.

Eighteen downtown business leaders signed their name to a letter sent to the president last week

The proposed link -- which would use a new tunnel across the East River to connect Lower Manhattan with the Long Island Rail Road system and portions of Brooklyn and Queens -- would solve both problems. It would reduce commuting time and increase convenience for tens of thousands of Long Island commuters, many of whom must now take one or two trains and then transfer to a subway in order to reach their downtown jobs. And it would create a one-seat ride to JFK, increasing Lower Manhattan's connections to the rest of the world and putting the city on par with global centers like London, Hong Kong, and Berlin.

In so doing, the rail link promises to keep businesses downtown that might otherwise think of leaving while also attracting new businesses to the area. "Employers think very carefully about the commuting time of their employees," says Marc Ricks, senior policy advisory in the New York City Office of the Deputy Mayor for Economic Development & Rebuilding, which helped shape the city's proposal to redirect the unused tax benefits toward the rail link. "Some will rule out Lower Manhattan or give it less consideration if there is a huge population of employees who can't get there easily."

Downtown corporations agree. "This rail link would be a powerful incentive for us to reaffirm our firms' commitment to Lower Manhattan -- so that, with new access to the Long Island labor pool and JFK airport, we not only remain here but also expand our operations here," wrote the group of business executives. These factors, the letter continued, have caused the link option to be rated as "the most important as yet unrealized transportation infrastructure project" in surveys of major downtown employers.

Gov. Pataki, in a June letter to the president, asked for support of the rail link

The Lower Manhattan Development Corporation spearheaded a study with partners the PANYNJ, Metropolitan Transit Authority, and New York City Economic Development Corporation, which was recently completed and confirmed that the new rail line is fully feasible. In conjunction with the series of improvements planned for Lower Manhattan, the rail link will create an incentive for major companies to locate, remain, or expand downtown.  In fact, according to the study, the economic output generated annually will exceed the one-time $6 billion construction cost -- and to help create more than 56,000 permanent jobs in Lower Manhattan and downtown Brooklyn.  

Thanks to combined efforts on the part of the city and state -- with staunch, unified support from the Lower Manhattan business community -- the proposal got the endorsement it needed from President Bush to go on to Congress. Bloomberg praised the teamwork involved, calling it "the latest example of how we have worked with the president and governor to find creative solutions for New York City's most serious challenges."

"Now it is up to Congress and our state's Congressional delegation to ensure this proposal becomes law," said Pataki in a statement. "I look forward to working with them to make the rail link a reality."