Public Infrastructure Dividends

Case Studies

Below is a brief analysis of the benefits of two capital projects. Both involve commuting into Manhattan, a daily event for more than a 1.5 million people. The first project is complete. Plans for the second are in flux.

1. North Access For Grand Central Terminal

In 1999, the Metropolitan Transportation Authority (MTA) added, at an estimated cost of about $120 million, two underground passages (Northeast and Northwest) to allow easier access to and from midtown offices north of Grand Central Terminal (GCT). This offered new exits/entrances to commuters who work north of 47th Street and east of Madison Avenue. The passages – hallways more than 1,000 feet long – run parallel to the tracks on the upper level. Entrances are at the northeast corner of 47th & Madison, northeast corner of 48th & Park, and on the east and west sides of 230 Park (Helmsley Building) between 45th and 46th Streets. These are used daily as a shortcut to and from midtown offices by thousands of commuters.

At a minimum, transportation improvements save time for commuters. For employers, the time-saving justifies the Park Avenue location. Multiplied by the thousands of workers and hundreds of employers that benefit, the improved productivity and economic stimulus of this one project are enormous. It contributes to higher rents, property values and more spin-off business in the surrounding area, all to the benefit of the State's and City's tax bases. In addition, other GCT commuters benefit from less congestion– not insignificant as Metro North has grown into the nation's fourth largest commuter railroad; in a metropolitan region with three of America's top four commuter railways.

The success of the North Access can be directly linked to the push for the $6.3 billion East Side Access project, which will bring the Long Island Railroad (LIRR) into GCT. In addition to providing two train platforms to accommodate the LIRR under GCT, there will be a new entrance/exit to the north. Currently, as part of East Side Access, the MTA is building a fifth, north entrance, which will allow street-level access at 245 Park, on the side street between Lexington and Park Avenues. The entrance costs $14 million and is due to open in the fall of 2011.

When East Side Access is completed in 2016, the benefits from the 1999 investment in the North passages -- and this year's fifth entrance -- will spread to even more commuters and their employers, supporting more midtown businesses, and adding further to State and City tax revenue. Connecting LIRR's main and Port Washington lines to GCT will increase LIRR's capacity into Manhattan and significantly relieve congestion at Penn Station and on connecting subways. And it will save an estimated 160,000 passengers 30-40 minutes on their daily commute.

Visit www.mta.info/capconstr/esas for more information on East Side Access.

2. New Trans-Hudson Passenger Rail Tunnel

The existing, 100-year-old, trans-Hudson tunnels are at or near capacity. They are shared by Amtrak and New Jersey Transit, resulting in significant congestion on the tracks and at Penn Station. There now seems to be greater consensus on the need for a new tunnel for passenger rail from New Jersey into Manhattan, despite recent controversy over the rising cost and subsequent cancellation of the Access to the Region's Core (ARC) project.

There are three publicly announced plans for a new trans-Hudson passenger train tunnel that will address capacity and congestion issues.

First, the now canceled ARC project, proposed in 2006 by New Jersey Governor Jon Corzine, New Jersey Transit (NJT), and the Port Authority of New York & New Jersey (PA), was estimated to cost about $9 billion. Second, Amtrak, with the support of New Jersey's US Senators Lautenberg and Menendez, proposed in early 2011, a Gateway tunnel project to accommodate its trains, as well as those of NJT, at an estimated cost of $13.5 billion. Third, the administration of New York City Mayor Michael R. Bloomberg has proposed a #7 subway line extension into New Jersey for about $5 billion. The significant expense of any one of these projects comes at a difficult time, and the politics of parceling them out among the various governments and agencies in the region is daunting.

A report advocating construction of ARC released in 2006 by the Building Congress and the New Jersey Alliance for Action stated, "The Tunnel is vital to the economic competitiveness of New York City and the entire region." The report added that the Tunnel would help generate an additional $10 billion in gross regional product and $4 billion in real personal income. In a study to forecast the likely impact of ARC released in October, 2010, by the Regional Plan Association (RPA), using NJT's ridership data as well as local New Jersey property values, concluded that such a project would, "significantly cut train commute times to Manhattan, increase the reliability of NJ Transit trains, reduce traffic and greenhouse gas emissions, create jobs, drive economic growth in the right places and boost home values." About 275,000 New Jersey residents now commute into Manhattan, where, on average, pay is 60% higher than in New Jersey. The ARC project would provide capacity for an additional 70,000 commuters and double the number of New Jersey residents within a fifty-minute train ride to Manhattan.

Amtrak says its alternative Gateway proposal would accommodate 10 more of its trains and 20 more commuter trains hourly during peak periods. According to the plan, during off-peak times the tunnel would allow 13 additional NJ Transit trains, an increase to 33, and eight more Amtrak trains per hour. This also offers New Yorkers quicker access to points west.

Mayor Bloomberg's plan envisions the #7 subway stretching from 34th Street on the Far West Side of Manhattan to Secaucus, N.J. to connect with NJT trains. It would extend the New York City subway outside the City for the first time, giving New Jersey commuters direct access to Times Square, Grand Central Terminal and Queens, and to almost every line in the subway system.

While it is essential that funding continue for police, fire, education and other vital services, budget choices must be made with a full understanding of the short and long term benefits. Cutting capital funds that support public infrastructure projects will almost certainly cost more – in direct costs for materials and labor and indirect costs for lost economic activity – in the long run. But preserving such projects yields significant dividends for New York City residents, visitors and commuters, both now and in the future.