NEW YORK – President Bush’s approval of a request to redirect up to $2 billion in Liberty Zone tax benefits toward other key components of the rebuilding effort in Lower Manhattan likely paves the way for a rail link between Lower Manhattan JFK Airport, New York City Mayor Michael R. Bloomberg and Gov. George E. Pataki say.
“By improving regional access to Lower Manhattan, we can continue the area’s dramatic rebirth from the attacks of September 11th, and ensure its future as an economic engine for the entire City,” Bloomberg said. “This is just the latest example of how we have worked with the President and the Governor to find creative solutions for New York City’s most serious challenges.”
The $2 billion possibly generated by this reallocation, in addition to $560 million put forward by the Port Authority of New York and New Jersey and an expected $400 million contribution from the Metropolitan Transportation Authority, would represent a significant down payment towards the project’s completion, which is expected to cost a total of $6 billion.
In a recent letter to the President, a number of senior business executives representing 18 downtown firms noted that this rail link will create 56,000 jobs in lower Manhattan and downtown Brooklyn and produce more than $6 billion in economic output annually.
Easier access to the continually growing Long Island labor pool will make lower Manhattan a more attractive business location for years to come, and a one-seat ride to JFK will encourage the national and international business transactions that have made Wall Street the financial capital of the world, city officials say. This rail link will also provide an invaluable service to the millions of tourists expected to visit the World Trade Center memorial upon its completion.
“Together, we will work to redirect these federal resources toward the establishment of a new rail link between Lower Manhattan and Long Island and JFK, which will go a long way toward reinvigorating the downtown economy,” Pataki said. “By creating this new rail link, we will provide dramatically improved access to Lower Manhattan and re-attract the tens of thousands of jobs that were lost after September 11th.”
In the months following Sept. 11, 2001, President Bush and Congress approved a $20 billion aid package to New York, including over $5 billion in tax incentives to spur redevelopment in Lower Manhattan. The City devised this proposal in late 2003 to find alternative ways that the unused tax credits could be spent and won support from the private sector.
Following a June 28 letter from Pataki and after discussions between the Bush Administration, state and city officials and key business leaders, the President agreed to refine the initial estimates of these tax incentives’ benefits and will allow New York to “cash in” any under- utilized portions of the aid package, which amount to about $2 billion. The Federal Office of Management and Budget is expected to announce in its Mid Session Review the Administration’s support of the reallocation.
The Governor stated in his June letter that any re-allocated benefits from the tax package should be dedicated to the building of a rail link to Long Island and JFK Airport from Lower Manhattan. The new rail line would provide downtown with dramatically improved access to one of the region’s most important labor pools and the region’s premier international gateway.
In February, Bush endorsed an extension to the Liberty Bonds program, which is set to expire this year. This program provides $8 billion in tax-free bonds to finance both commercial and residential projects in New York City, with the priority being Lower Manhattan.
The extension of the Liberty Bonds program, which is now pending in Congress, is critical for the reconstruction of the World Trade Center site, officials contend.