New York City didn’t get the 2012 Summer Olympics, but the bid spurred projects that it needed, anyway.
“Contrary to popular belief, the New York City Olympic plan has largely been implemented,” said Mitchell Moss, director of the Rudin Center for Transportation Policy and Management at New York University and author of the report, “How New York City Won the Olympics.”
New York’s emphasis, according to Moss, was on productive use of infrastructure enhancements throughout the city to meet long-range needs, rather than a one-off, and has spurred projects such as the Hudson Yards development, the extension of the No. 7 subway line to Manhattan’s West Side, and expanded ferry service throughout the city’s five boroughs.
The message resonates beyond the city limits.
“Transportation can link us,” said Bob Boland, a sports business professor at NYU’s Tisch Center for Hospitality, Tourism and Sports Management. “One of the New York area’s problems is that there are so many political divisions.”
Transportation, said Boland and Moss, provides a ray of hope for a struggling town across the Hudson River that overspent on a small, limited-purpose stadium and has a wretched tale of woe to show for it.
Harrison, N.J., just outside Newark, is reeling from cost overruns to its Red Bull Arena stadium, home to the New York Red Bulls of Major League Soccer. Moody’s Investors Service slapped the town with two bond-rating downgrades, in December 2010 and in May, that dropped the credit eight notches to Ba3 from A1 with a negative rating. That put Harrison on a parallel with Detroit, although Moody’s announced late last week it would further review the Motor City.
Harrison Mayor Raymond McDonough and Thomas Neff, director of New Jersey’s division of local government services, met with Moody’s analysts in October, pitching for the agency to improve its rating. The town still awaits a response.
“Moody’s indicated that they would need some time to discuss the meeting further and would then contact us with additional questions. To date we are still awaiting any response or inquiries from Moody’s,” said Gabriela Simoes, the town’s chief financial officer. Moody’s said such meetings are confidential.
“Harrison’s not a lost cause,” said Boland, a lawyer who has negotiated more than 100 player and endorsement contracts in a variety of sports, including the National Football League. “Harrison, with transportation improvements beyond PATH [Port Authority Trans-Hudson commuter trains] and some kind of Newark spur, has great potential.”
Moss added: “Harrison’s future is tied to improved transportation. It’s not fully in place yet.”
Red Bull Arena — the team and stadium are namesakes to the energy drink owned by Austrian businessman and team owner Dietrich Mateschitz — opened in March 2010. The made-for-soccer building cost more than $200 million to build.
According to Moody’s, Hudson County’s issuance of $39.4 million of capital appreciation bonds in 2006 and $14.4 million of New Jersey Infrastructure Trust loans in 2009, combined with $8.5 million of additional school debt, caused a spike in the town’s debt burden to 8.8% by year-end fiscal 2009.
Debt service since has soared to 16% of Harrison’s fiscal 2011 introduced budget, Moody’s said in a May report, which cited the municipality’s “lack of a long-term solution.”
“Harrison had a dramatic increase in stadium costs. And it’s only a 25,000-seat venue. It’s very well-designed for the sport of soccer, but it’s not a multi-use facility. It was very expensive for a single-sport stadium,” said Boland, who contrasted Harrison’s stadium with the Home Depot Center in Carson, Calif., which opened in 2003.
That 27,000-seat stadium, about 15 miles south of downtown Los Angeles, is also a prototypical, European-inspired soccer venue, but in addition it hosts concerts and high-school football championships. Track lanes also surround the stadium’s exterior, enabling track and field meets without pushing inside seats away.
Boland added that Harrison was also a victim of bad timing. New York’s major buildups, sports included, have dwarfed the New Jersey stadium in prominence.
“New York City and the region developed a lot of stadiums at the same time,” he said. “You had the new Meadowlands [MetLife Stadium], Yankee Stadium and Citi Field. If Harrison had been the one new stadium of its time, it would have enjoyed a bigger status. To some degree, it got lost in the clutter.”
The Port Authority of New York and New Jersey has earmarked up to $3.5 million for improvements around the Harrison PATH station, one stop across the Passaic River from Newark and a 15-minute ride from lower Manhattan. “Intermodal improvements,” as the Port Authority called them, would include developing a park and plaza with enhanced lighting and signage.
It follows a waterfront redevelopment plan that the town adopted in 2003 to transform 250 acres of rundown industrial facilities near the station, which sits along the river.
Moss said the mere specter of the Olympics forced New York to act on long-stalled projects it was considering anyway. Daniel Doctoroff, an investment banker and later the deputy mayor under Michael Bloomberg, ran point for the far-reaching projects. London, which won the 2012 bid, is also emphasizing the long term.
Moss pointed to Tokyo in 1964 and Barcelona in 1992 as other cities that have derived long-term benefits from hosting the Olympics. “Others — such as Montreal in 1976 and Athens in 2004 — have been left with little more than underutilized facilities and inflated debts,” he wrote.
“The most important element is that these are projects that the city should have been doing with or without the Olympics. These are projects worth doing. They have been discussed and debated — rezoning the East Side and West Side, the new Shea [Citi Field] for the Mets and the new Yankee Stadium, and the deal to extend the No. 7 train to the West Side,” Moss said.
He also pointed to waterfront revitalization, especially along the East River in Queens and Brooklyn, and redevelopment along the Harlem River, notably on the Bronx waterfront.
Cost overruns to city projects, though, have generated controversy as well. Last week the New York Daily News, citing bond documents, reported that the city could be on the hook for more than $500 million in 2015 merely to pay interest on $3 billion in Hudson Yards bonds.
And, at Thursday’s Port Authority board meeting, Patrick Foye, the agency’s new executive director, warned about aging infrastructure.
“It’s clear to many that the region’s infrastructure, including the Port Authority infrastructure, is now an impediment to growth and is becoming a greater impediment to growth,” Foye said, citing delays commuters experience at bridge and tunnel crossings, and on public transportation.