NYC building boom won't peak for 2-3 years: panel

NEW YORK (Reuters) - New York City's building boom will not top out until 2010 or 2011 despite the ailing economy because so many billion-dollar public and private projects are under way, a panel said on Monday.

Wall Street is the sun around which the city's economy revolves, but private developers and public agencies have planned $51 billion of projects over the next four years, according to the blue-ribbon panel's report for New York state's Metropolitan Transportation Authority.

With contractors and skilled workmen in short supply and the prices of steel, concrete, copper and other materials spiraling higher, the state agency convened the panel to find ways to cut costs to avoid having to delay or reduce projects.

"The projects presently in the pipeline ... that are just starting are going to continue for a couple of years. It's not something that's going to end in 2008 or 2009," James Jones, co-chairman of the MTA panel, told reporters.

Still, the freezing real estate market is already costing the biggest U.S. mass transit agency some of the funds it had counted on for its budget. The Metropolitan Transportation Authority gets a share of real estate tax collections. April tax receipts slid $198 million below a year-ago, the agency said in a report.

Agency Chief Executive Officer Elliot Sander said the panel's cost-cutting recommendations, which include getting multiple bids by breaking contracts into smaller amounts, could save tens of millions -- and possibly hundreds of millions -- of dollars.

BUILDERS STILL HIRING

Though Wall Street has announced tens of thousands of layoffs, New York City builders still are hiring construction workers. There were 123,200 building workers in March -- nearly 2,000 more than a year ago, according to James Brown, a labor market analyst, for the state labor department.

Builders usually keep hiring through the summer and last year, employment peaked in September at 131,900, Brown said.

But the average salary this industry paid, including office and sales workers, was only $61,073 in 2006, he added.

That was just over one-fifth of the average earned by the city's financial workers. Their pay averaged $340,312, when salaries and bonuses are counted. Those rich paychecks and the high taxes these individuals and their employers pay mean that the city's finances mirror Wall Street's profits and losses.

TOURIST DELIGHT

Though Mayor Michael Bloomberg on Monday called the latest

economic data "worrisome," he vowed to avoid the mistakes of the mid-1970 financial crisis, when the police force was slashed, crime shot up, and people and businesses fled.

All city agencies have been told to cut spending by 5 percent.

"We're not going to just load that into any one program," he said. "That way we'll get through this together, with everybody sharing the pain," the mayor, who is registered as an independent, told reporters.

One still-bright economic star is tourism: One million more foreign tourists came to New York City in the first quarter than last year, an increase that contrasts with the national drop of 17 percent, Bloomberg said.

So far, Brooklyn's Atlantic Yards development, which includes a new basketball stadium for the Nets, is the only project that has said it probably will take longer to finish than first thought because of the sagging economy.

Work has already started on stadiums for the Mets and the Yankees baseball teams, a Second Avenue subway for Manhattan's East Side and a tunnel under the East River that will link Grand Central Terminal with the Long Island Rail Road.

Though the World Trade Center rebuilding was snarled for more than four years, the Port Authority of New York and New Jersey, the lead agency, now vows to meet all deadlines.

There has been considerable speculation that the next blockbuster project, the midtown rail yards, will now be delayed, but the Metropolitan Transportation Authority's chief financial officer, Gary Dellaverson, said: "We're on track."

The so-called Hudson Yards development should advance on Wednesday with a 200-page document fleshing out the initial deal with developer Tishman Speyer that was announced in March. The agency stands to get $1 billion, on a net present value basis, by leasing the 26-acre rail yards to Tishman Speyer, which will build office and apartment towers.

(Reporting by Joan Gralla; Editing by Jan Paschal)