Monday, March 28, 2011

Behind the Bloomberg administration's CityTime scandal: budget director Mark Page (who helped steer the revision of Forest City Ratner's MTA deal)

Also see Michael D. D. White's Noticing New York coverage.

In Behind Troubled City Payroll Project, Lax Oversight and One Powerful Insider, the New York Times digs into a black mark on the Bloomberg administration:
But the payroll automation project, known as CityTime, has instead become a major embarrassment for the Bloomberg administration, first ballooning to $700 million and then resulting in federal criminal charges and multiple investigations that could dog the mayor for years.

Last week, Deputy Mayor Stephen Goldsmith declared what had become obvious: the city cannot rely on outside consultants to monitor multimillion-dollar technology contracts, which it had done with CityTime. He added that the city would create a new office inside City Hall to do so.

An examination of the events that led to the CityTime scandal reveals lax oversight, mismanagement and a basic failure to control costs.

It also showed that much of the fervent drive to install the system could be traced to the determination of one powerful administration insider: the budget director, Mark Page.

...Mr. Page, a lawyer, had little familiarity with technology, but he believed CityTime would curb timekeeping abuses and save the city tens of millions annually. So, wielding his power over agency budgets, he persuaded reluctant commissioners to adopt CityTime. And, brushing aside criticism, he insisted year after year that the project was inching closer to completion.

...While Mr. Page pushed, few others inside City Hall paid attention.
Page and the Vanderbilt Yard deal

Page, it should be remembered, was one of the two Bloomberg appointees on the board of the Metropolitan Transportation Authority who pushed hard against any skepticism toward Forest City Ratner's requested June 2009 revision of the September 2005 deal for Vanderbilt Yard development rights, allowing the developer to save on upfront cash and a smaller replacement railyard.

As I wrote 6/25/09, as for the last-minute character of the deal, which had been aired only two days earlier, Page claimed unrealistically that, because MTA staff had been busy working on the deal, “it’s not as though it’s something that’s been dropped in our laps suddenly to consider.”

“I think that realizing value from railyard property that we own is something that we have learned over the last number of years, much of which has been in a boom real estate cycle, is extraordinarily difficult,” Page said. “Because we require the railyard function... we’re selling the space above it. To have an opportunity to actually realize value for the space above our land requires a tremendous upfront investment by the buyer to actually build the platform, an upfront, major investment before the buyer can then move on.”

However, I pointed out, there's no obligation that Forest City Ratner build the platform on the majority of the Vanderbilt Yard site.

“The other aspect of these yards is that they’re large, and you need a buyer who’s going to somehow incorporate what you’re offering into a large and elaborate development project. Large and elaborate development projects in New York City are extraordinarily difficult to pull off, in terms of the levels of government and public particpation, legal issues to be dealt with,” Page said.

“To get all the elements lined up so that you can get a transaction of this kind to move forward is extraordinarily difficult and time-consuming. We have arrived at a point where there’s not perfect assurance that this project will in fact take place,” he concluded. “But I think, as outlined before us, with the benefits that are available here to the MTA, assuming it goes forward as currently described.... I think that this is as good a deal as is going to be available to us for this property in the foreseeable future.”

What Page missed

As I pointed out, a rebuttal could be cited from the New York Times, which in 1994 editorialized regarding the Coliseum site at Columbus Circle:
The most sensible course now is for the city to find out anew the market value of this property, and that cannot be accomplished through negotiations with one bidder.
Also Page's phrasing, "assuming it goes forward as currently described," leaves a lot of wiggle room. The project at that time was still supposed to be completed in a decade. Even the Empire State Development Corporation agrees that won't happen.

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