City Raises $2 Billion In Bonds For No. 7 Line Extension
By: NY1 News
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It took the city just one day to raise the funds needed to extend the Number 7 subway line up the West Side of Manhattan. NY1 Transit reporter Bobby Cuza filed the following report.
There is no turning back now for the Number 7 line. Wednesday, the project got all the funding it will need to move forward, when the city sold $2 billion worth of bonds.
"We're now committed,” said Deputy Mayor Dan Doctoroff. “We're committed to bondholders to get this subway built."
About $1.4 billion of the money raised will go toward the 7 line extension, with the rest going to other infrastructures in the so-called Hudson Yards area. Altogether, the project will cost $2 billion, and extend the line from Times Square over to 11th Avenue and down to 34th Street. Tunnel work is expected to begin in late spring, with the extension to open in 2013.
"We're moving forward,” said Doctoroff. “It is irrevocable now. The train literally has left the station."
The 7 line project is unique in that the city, and not the MTA, is financing it. The idea is not for city taxpayers to foot the bill, but for the bonds to be paid off with tax revenue from development in the area, that the 7 line is expected to help generate. Such a financing scheme has never been tried before, and there were doubters. But as it turned out, demand for the bonds was so high, the city issued half a billion dollars more in bonds than it had planned.
Some concerns about the project remain, like the fact that a station planned for Tenth Avenue and 41st Street, partway along the new line, may not be built until later, even though the MTA has said delaying construction could increase the cost by $200 million.
"From my point of view, you should figure out a way to get it funded, and build it today," said MTA Board Member Barry Feinstein.
But the city says that getting it built now does not fit into its financing scheme.
"It's not that there's no need,” explained Doctoroff. “It's that because most of the development around it is likely to be residential, and most residential doesn't pay taxes. The development around it doesn't contribute to paying back the bonds."
How the Tenth Avenue station will eventually get paid for remains to be seen.
- Bobby Cuza