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The PA & Pataki's Pit
NY Post - Sunday, May 8, 2005
BY GEORGE J. MARLIN
NO one should be surprised that Ground Zero rebuilding plans are in shambles. With a lame-duck governor's office and numerous governmental entities with competing agendas overseeing the project, I wouldn't expect any less.
I can't blame Kevin Rampe for abruptly quitting as president of the Lower Manhattan Development Corp. It had to frustrate and demoralize this very bright guy to be kept in the dark concerning politically motivated policy decisions and to be set up as the fall guy by a bunch of third-rate bureaucratic egoists.
As a former executive director of the Port Authority, I expect that Police Commissioner Ray Kelly must have been pulling out what little hair he has left while dealing with the PA on security matters. My guess is that the PA, believing that its ownership of Ground Zero exempts it from New York City oversight and interference at any level, had contempt for Kelly and that the PA stalled for 16 months hoping the NYPD would just go away.
And then there's Master Lease holder Larry Silverstein. He's well acquainted with PA engineers second-guessing his every move. Back in 1987, he built the original 7 World Trade building and endured delays and cost overruns due to PA interference and inertia.
In this rebuilding process, no doubt Silverstein is experiencing PA déjà vu to the nth power. Hence, it comes as no surprise, that with a stalled project, no potential tenants, and a monthly lease payment of $10 million for an empty pit, he may want to get out of his land-lease deal.
Sadly, all this fumbling and uncertainty plays into the hands of the region's leading civil-service mandarin the Port Authority.
The 84-year-old agency resents scrutiny of "meddling interlopers," which is how its insiders often refer to the people's elected officials and their appointed representatives. PA longtimers actually prefer the murky mazes of its bi-state status because its labyrinths of rules and regulations conceal their waste and inefficiencies and shields them from outsiders.
I learned first-hand that this poster child for New York's "permanent government" consistently resented the privatization of its facilities the Vista Hotel, JFK International Arrivals building, the Yonkers Industrial Park. I attribute it to a deep-rooted faith that only PA bureaucrats possess the esoteric mystical knowledge to run things.
If Silverstein bows out, the PA will move to fill the power void. If it succeeds, it will be a dark day for all New Yorkers.
PA construction oversight will be plagued by delays and huge cost overruns. And the result will be a commercial white elephant, just like the original PA-constructed towers.
People forget that when the Twin Towers were first built, to avoid financial failure, the state government became the primary tenant in 2 World Trade Center. Gov. Pataki finally moved the governor's office out of 2 WTC in 1995, publicly complaining it was a poorly-run building.
And a two-volume, 400-page 1994 Deloitte & Touche "Review of the Functional, Operational, Financial and Administrative Activities of the Port Authority World Trade Department" objectively confirmed Pataki's gut assessment. This scathing report documented the incompetence of the Trade Center's PA managers.
From security costs, to cleaning, repair, maintenance, administration and marketing expenses, the PA-managed Trade Center was far more expensive and less effective than its peers in the private sector.
The Deloitte study reported that the organization of the World Trade Department contained little accountability "for the specific business and processes within the organization." And it concluded that "as part of the Port Authority, the World Trade Department is sometimes placed in a competitive disadvantage when attempting to attract and retain tenants."
No, the Port Authority can't take over the reins of the Ground Zero rebuilding and management. In fact, the entire fiasco has proven that government should never be in the commercial real-estate business.
To salvage the mess, the governor should order the Port Authority to terminate the land lease and put all Ground Zero property less the memorial site up for sale. Let expert private developers with their money at risk determine the market for the best mix of residential and commercial demand.
Under this approach, land values will be maximized, the city will receive full property taxes and the future of lower Manhattan will be out of the hands of arrogant and incompetent government potentates.
George Marlin, is a former executive director of the Port Authority
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