New York mayor suddenly facing setbacks

By Daniel Trotta and Edith Honan

NEW YORK (Reuters) - Not long ago, New York Mayor Michael Bloomberg was touted as a potential U.S. president. Now the self-made billionaire, who has enjoyed largely unimpeded success in business and politics, is facing setbacks in his own city.

Some of Bloomberg's grandest plans for the city are dead or in disarray. Most notably, his "congestion pricing" plan to charge drivers $8 to enter much of Manhattan was defeated by state legislators. Bloomberg saw it as a way to reduce traffic and pollution while raising money for mass transit but legislators saw it as political poison.

Major development projects for the city, which fall under state authority but which Bloomberg has championed, are facing obstacles including a lack of public and private funding attributed to economic slowdown.

Bloomberg, who is prohibited by law from seeking a third team next year, aspires to transform the warehouses, parking lots and railroad tracks of the west side of midtown Manhattan into a shiny complex of office towers with a tree-lined promenade. His vision also includes a glorious new train station and rebuilt sports arena that are largely under state auspices.

Bloomberg says the city has done its part to develop the rail yards, rezoning land and raising much of the financing the state needs to extend a subway line for the area.

But former Gov. Eliot Spitzer cut plans to expand the nearby convention center due to skyrocketing cost estimates and the train station was delayed when Spitzer resigned last month amid a sex scandal.

The deputy mayor for economic development, Robert Lieber, acknowledged that Bloomberg depends on the state.

"I don't think he's powerless but it's certainly not something that we control unilaterally," Lieber said.