Developers in New York Try to Ease Prickly Relations

The subway escalators that run under the brick high-rise at the corner of East 15th Street in Union Square have long been in a near-constant state of disrepair. The developer of the building, a condominium named Zeckendorf Towers, built the escalators in the 1980s as a public benefit in exchange for approvals to develop the site. As part of the deal, the condominium association was responsible for the machinery’s maintenance.

Librado Romero/The New York Times

A staircase connects a Grand Central subway platform with the Chanin Building.

Librado Romero/The New York Times

A nonworking middle escalator in the Union Square station under Zeckendorf Towers.

But the escalator agreement did not provide for any enforcement of that upkeep, and the machinery spent years in various stages of idleness. Not until last year, following several news articles and pressure by the Metropolitan Transportation Authority did the owners replace them with modern, industrial-strength versions. Maxwell-Kates Inc., which manages the building, declined to comment.

There are more than 600 miles of subway track and hundreds of stations in New York City, and zoning requires that developers in high-density areas like Midtown Manhattan, Union Square and Downtown Brooklyn move nearby subway entrances into their property lines and renovate them. As a result, private entities may be responsible for public services, a situation that some experts say is not always ideal.

“The M.T.A. has learned the hard way that it is one thing to ask a developer to make an upfront capital investment, and quite another one to maintain something on a day-to-day basis over the years,” said Juliette Michaelson , the director of strategic initiatives at the Regional Plan Association, a policy, research and advocacy group. “In 10 years, when that escalator fails, who fixes it? These details must be worked out in advance.”

To improve its dealings with private developers, two years ago the transit authority quietly opened a three-person Office of Transit-Oriented Development. It hired Robert Paley, a real estate expert who spent time in the private sector — as an executive at AvalonBay Communities he helped develop Avalon Chrystie Place on East Houston Street — and also worked previously at the M.T.A. on projects like the Atlantic Terminal Mall in Brooklyn.

Mr. Paley and his team were given the task of spurring development around transit centers, mostly in suburban areas, and to coordinate the many public agencies and other stakeholders that are often involved in large, privately financed transit improvements. With the real estate market now beginning to thaw, his role may become more critical.

“It was very quiet when I first came onboard, but in the past several months, the phone in our office has begun ringing, indicating to me that developers are warming to the idea of building again,” Mr. Paley said.

Mr. Paley’s first big deal in New York City has been an agreement with Vornado Realty Trust to develop 15 Penn Plaza, a proposed office tower that would replace the Hotel Pennsylvania on Seventh Avenue between 32nd and 33rd streets. Vornado is hoping to construct a 2.05 million-square-foot office building, exceeding what is allowed under the current zoning.

In exchange, Vornado agreed to build and maintain transit improvements, including reopening the Gimbels Passageway that connects Herald Square and Penn Station. Under the proposed plans, it would transform the passageway, which was closed in the 1980s, into an 800-foot pedestrian concourse to rival Rockefeller Center.

Vornado has said it would not begin construction on the project until it secured an anchor tenant. Still, it wants to have all of its approvals in place in expectation of finding that tenant, and so last summer it negotiated a deal with the transit authority and the city. Known as a restrictive declaration, the agreement, which is recorded against the property and enforceable by the city, includes several clauses meant to prevent a repeat of the problems with the escalators at Zeckendorf Towers.

Among the requirements is that the transit improvements must be designed and agreed upon before the city will grant Vornado building permits. “Otherwise, if the construction starts, and the building moves quickly, there is a risk that the public improvements that were promised will get left behind,” Mr. Paley said.

To ensure that Vornado maintains the improvements, and in the event that 15 Penn Plaza changes ownership, Vornado must provide financing security, possibly in the form of a letter of credit. The developer also will be unable to get a temporary certificate of occupancy until the transit improvements are substantially completed, Mr. Paley said.

While 15 Penn Plaza may be the latest development to involve the M.T.A., the relationship between the agency and builders goes back nearly a century. One of the first buildings to have direct subway access was the Municipal Building at One Centre Street, designed by McKim, Mead & White. Completed in 1913, the building features subway lines that are directly connected to its base, with riders exiting through a covered entranceway featuring white Guastavino tiles.

“The building was one of the first to be totally intermodal, with a big archway that allowed for vehicular traffic as well,” said Fredric Bell, the executive director of the American Institute of Architects New York Chapter.

With its internal marble staircase, the Art Deco Chanin Building on East 42nd Street and Lexington Avenue “is one of the best examples” of a building with direct subway access, Mr. Bell said. “If you work in the building you don’t have to get wet, and if you are just passing through you can catch your breath before having to go out into the elements.”

Given the high rates of street crime in the 1970s and 1980s, developers began shunning direct access to the subway, and many passages, including the Gimbels Passageway, were closed. More recently, fears of terrorism have compounded these concerns. Other difficulties for landlords of buildings with direct subway access include insurance concerns related to slip-and-fall accidents among riders.

Subways are also highly trafficked areas, so the construction materials used are often more functional than attractive, like industrial light fixtures and simple ceramic tile. “Very rarely, if ever, does a subway station make your building look better — even if you upgrade it, it will never be equal to the finishes you are putting in elsewhere in the lobby,” said John Krush, an executive managing director at Newmark Knight Frank Project & Development Management, who advises tenants and developers.

“Most developers feel that the ideal option is for the subway entrance to be directly outside the building,” Mr. Krush said. “This makes brokers happy because they can market the building as ‘adjacent’ to subway transit.”

Still, many experts in the real estate industry say that dealing with the M.T.A. can be a headache. There are strict engineering requirements for building around the subway system, and the approval process can be slow. Now, with the advent of Mr. Paley’s office and the effort to increase transparency, the hope is that this process will improve.

“Any time a public agency decides to have an advocate, a person that can help developers make their way through the complexities of the process, the better it will be,” Mr. Krush said.