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Some of the railroad leases first were entered into as early as 1881. All have had periodic renewals for varying terms. The most recent leases began expiring in 1946. The last to expire ran out in 1950.

Since 1950 all of the railroads have been month-to-month tenants of the city.

During the lapsed period a major cause of concern to the city has been a steady deterioration of some of the pier properties. In many cases the piers have been kept up. But in other instances so-called deferred maintenance has been accumulating.

Recent studies have put the deferred maintenance figure at $3,018,671, with $2,021,054 chargeable to the railroads and $997,617 assessed against the city.

PRELIMINARY TO 6-YEAR PLAN

Controller Gerosa expressed the view that reestablishment of the leases on the railroad piers, with the protection they give the city on maintenance, insurance, and other details, would be an essential preliminary to the $187,053,886 6-year general pier reconstruction and redevelopment program announced last summer by Commissioner O'Connor.

Under the new leases, it is expected that provision will be made for virtually complete restoration of the piers. The railroad companies probably will make all of the repairs and get rental concessions to reimburse them for that part of the rehabilitation cost chargeable to the city.

Some years ago renewal leases for the railroad piers were drafted by the department of marine and aviation and referred by the board of estimate to the controller. On March 11, 1954, Controller Gerosa restored the proposed leases to the board calendar with a request for instructions.

Since that time the board of estimate has put off action from time to time pending the drafting of new leases by Commissioner O'Connor.

TO END MONTH-TO-MONTH DEALS

Last week the board of estimate sent back to Commissioner O'Connor the leases pending before it since March 11, 1954, with instructions that new leases to replace them be returned to the board March 22. On that date the board is expected to take action that will end the month-to-month tenancy of their piers by the five railroads concerned.

The railroads and the piers they useall Hudson River unless otherwise designated follow :

The Erie Railroad : Piers 19, 20, 21, 48, and 87.
The Pennsylvania Railroad : Piers 27, 28, 29, 45, 50, and 77.
The Baltimore & Ohio Railroad : Piers 10, 22, 23, and 66.
The Lehigh Valley Railroad : Piers 38, 66, 67, and 44 (East River).

The Delaware Lackawanna & Western Railroad : Piers 68, 41, and 26 (East River).

While it is expected that most of the renegotiated leases will be for 10 years, with an option to the tenants of 10-year renewals, a few will be for shorter terms.

The short-term leases are expected to include piers 38, 40, and 41, which are scheduled to be demolished eventually to make way for construction of the massive $16,240,000 terminal to be built near West Houston Street by the city for occupancy by the Holland-America Line.

With the ultimate demolition of these 3 piers, the railroad-leased pier properties will be reduced to 15 and the total annual rental to the city to $1,539,680.

The pier rental formula established in 1948 is based on 6 percent of the original construction cost of the piers, plus rental of land under water occupied by the piers and slips, plus 2% percent of the assessed value of the piers in lieu of taxes.

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Housing area, Committee on Slum Clearance, Randall's IslandWashington

Market, boundaries: Franklin St., Greenwich St., Park Pl., and West St.

[blocks in formation]

Area private property, 534,119 square feet equals 12.3 acres :

Land: $17.49 per square foot.
Land and buildings : $21.89 per square foot.
Area streets to be closed : 239,292 square feet.

Total net area: 773,411 square feet equals 17.6 acres.
Assessed valuation per square foot, total net area:

Land, $12.08 per square foot.

Land and buildings, $15.12 per square foot. Acquisition cost: (Assessed valuation plus 50 percent)

$17, 542, 000 Less possible resale price, 773,411 square feet at $10 per square foot

7, 609,000

Write-down
Net project cost--
Federal
City

9, 933, 000 15, 000, 000 10,000,000 5, 000, 000

COUNSELOR AT LAW,

New York, N. Y., October 28, 1957. Hon. VICTOR ANFUSO, House Committee on Agriculture,

New York City. DEAR CONGRESSMAN ANFUSO: I am sending you herewith enclosed a statement on behalf of the Produce Truckmen's Association, Inc., of which I am counsel, setting forth our views in connection with the proposed relocation of the Washington Market.

I trust that your committee will give this statement its most serious consideration. Respectfully yours,

JEROME Y. STURM.

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STATEMENT SUBMITTED BY PRODUCE TRUCKMEN'S ASSOCIATION, INC.

We understand that hearings have recently been conducted by the House Committee on Agriculture in connection with proposed plans for the relocation of the Washington Market. While our views have been set forth in previous hearings, we nevertheless wish to reiterate our position and to set forth the reasons therefor.

As you know, this association represents the vast majority of the truckmen who transport fruit and produce from the piers, docks, and railroad yards to various parts of the metropolitan area. Obviously this facility is an integral part of the operation of this industry, and we are of course vitally concerned with whatever plans may be formulated by the Federal Government and other agencies in connection with the distribution of fruit and produce in this area. We have over the past years given a great deal of thought and study to the problems of the Washington Market and we have reached certain basic conclusions which arise from our long experience with the industry. Our position, for reasons which we shall set forth herein, is that the most productive procedure which can be followed for the rehabilitation of the handling of fruit and produce in the city of New York and its environs, is to remodel and refurbish Washington Market at its present location. We have reached this conclusion for the following reasons:

1. The statistics which have been submitted to you demonstrate that the tonnage presently received in the Washington Market (and the tonnage which would be received in the market wherever it may be located) has diminished substantially over the past 10 years. This has resulted principally from the increased purchasing power of the chainstores which receive their merchandise directly from the shipper and bypass the market, and the constant growth of the frozen food industry. In view of the decline in the volume of business which would be handled by any market in whatever location, it is foolhardy to expend substantial sums of public money for a project which is unnecessary. A more feasible plan which could be formulated and put into effect for comparatively modest sums, would be to rehabilitate the present market at the present location. The present tonnage and the projected future tonnage has reached the point where only 50 percent of the present market area is needed for the direct handling of fruit and produce. Under these circumstances at least half of the present Washington Market area could be utilized for parking facilities, refrigeration, over-the-road trucks, public housing developments, etc. The remaining 50 percent of the present area, particularly the locations nearest the waterfront, could be remodeled, modern equipment could be installed, and a more efficient market put into operation at a small fraction of the cost of relocation.

2. The fact is that the pier facilities are so extensive that they could be used to much better effect than at present. If modest expenditures were made for the modernization of existing piers they could handle all or a substantial part of the total merchandise received at these locations. The center of activity then would shift to the piers where it rightly belongs. This rehabilitation also would requre a small fraction of the cost of relocating the market elsewhere.

3. The proposal to establish a market in the Bronx would result in a split market which would seriously impair the utilization of such a center. The cost of transportation to outlying areas in the city, such as Brooklyn, would be prohibitive and it is to be anticipated that the result of such a project would be to establish a market in Brooklyn and perhaps a third market in Manhattan. The most centrally located area is of course the present location of the market since it is nearest to the piers, steamships, and New Jersey railroads.

4. The proposal to relocate the Washington Market in the Bronx would result in a substantial delay in the handling of fruit and produce since cars would reach the market approximately 1 day later than they do at present. This would result in higher railroad rates, unnecessary handling of merchandise, since merchandise would have to be shipped back to Manhattan and Brooklyn from the Bronx. This unnecessary movement of merchandise would of course increase the final selling price to the consumer.

5. The removal of the market from the present area would affect real-estate values and taxes in that area, and in addition it would seriously affect maritime interests since the Washington Market area is adjacent to the steamship company facilities. Foreign imports of fruit and produce constitute a substantial portion of the carload lots which enter our market area and any removal of the market facilities away from their present location would create additional transportation costs for fresh fruit and produce which is received at the steamship unloading piers.

6. The cost of fruit and produce to the consumer would be increased in the event of the relocation of the market inasmuch as necessary facilities which aid the industry have grown up around the Washington Market area. In addition to the piers referred to above, there are also cold storage warehouses, sanitation facilities, etc., which could not easily be moved to locations in the Bronx. Under these circumstances additional transportation costs would be mandatory-all of which could be avoided by the proposal we urge.

7. No one has thus far demonstrated that the operating cost to the receivers, buyers, etc., in a relocated market in the Bronx would not be substantially higher than the present costs in the Washington Market area. It is common knowledge that the present state of the industry is such that additional costs from whatever source, cannot be added to the current overhead of the industry if it is to survive in anything like its present form. We are of the opinion that the most feasible way of reducing operating costs in the industry is not to run to a less desirable location but rather to make whatever improvements are necessary in the best location. This can be done, as we have suggested, without uprooting the industry and without adversely affecting any segments of it.

8. It is significant that the engineering studies heretofore made by MadiganHyland and the plan of the Port of New York Authority did not provide for a relocation of the Washington Market but rather suggested that facilities be constructed at the present situs. While these proposals are much more elaborate than our association believes are necessary in the light of the present and prospective tonnage and current construction costs, nevertheless they do buttress our contention that the best location for the produce market is the present location.

For these and other reasons which we are certain have been brought to your attention, we strongly urge that your recommendations provide for the allocation of public funds which will be utilized to remodel the present Washington Market at its present location. This may require condemnation of existing buildings, the widening of streets, the increased use of piers, the modernization of the piers, and any steps which will bring about a more efficient handling of fruit and produce coming into the area. The present state of the industry does not require the expenditure of the staggering sums which have been mentioned as necessary for the construction of a new market in the Bronx. Nor is the industry in a position to support such an establishment in view of the diversions which have taken place in the industry. We believe that the expenditure of a comparatively modest sum will provide the efficient and modern facilities at the present location which are necessary if the cost of the fruit and produce to the consumer is to be maintained and perhaps diminished. Respectfully submitted.

PRODUCE TRUCKMEN'S ASSOCIATION, INC.,

By JOSEPH MILLER, President. (Whereupon, at 12:55 p. m., the above hearing was adjourned.)

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