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UPDATE 1-Gov to review if NYC building projects too costly

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ALBANY, April 30 (Reuters) - New York City’s long list of billion-dollar building projects, from a planned new train station to the rebuilding of the World Trade Center, must be reviewed to see if they are still affordable amid a weakening economy, Gov. David Paterson said on Wednesday.

“What I want to determine is whether we can accommodate all these projects in the fiscal hardships we’re in right now,” Paterson told reporters in Albany.

The state has a role in approving the projects under review, both because of funding they would receive from the state, city or federal government and the state’s role in agencies like the Port Authority of New York and New Jersey, which owns sites including the World Trade Center.

“These projects were planned at a time when the revenues and the bonding authority would have been there and I want to be sure it still exists,” Paterson said.

The state will have to close $20 billion of deficits in the next three years, said Paterson, who wants to cut $800 million from the current budget, which is only a few weeks old.

Other projects on Paterson’s review list include the Hudson Yards development of commercial and residential towers in west midtown Manhattan, to be built over the state’s mass transit agency’s rail yards, and the expansion of the nearby Jacob K. Javits Convention Center.

Although former Gov. Eliot Spitzer had axed the Javits expansion, saying the improvements fell short and were too costly, Paterson’s inclusion of the center on his review list indicated that it could be revived.

The city still is in a historic construction boom but economists for months have been questioning how long it can withstand the national housing-led downturn and Wall Street’s losses from investments in the subprime mortgage market that have made it much harder for developers to get loans. In previous downturns, New York City saw many ambitious projects stall for years or get scaled back.

On Wednesday morning, the state’s Metropolitan Transportation Authority said it expected the city and developer Tishman Speyer to resolve their clash over $3 billion of improvements for the Hudson Yards rail yards within seven days, as required by an escrow agreement.

On the rebuilding of the World Trade Center site, both developer Larry Silverstein and the Port Authority of New York and New Jersey have promised to meet all the deadlines for rebuilding.

Meanwhile, the long-stalled plan for a new train station serving both Amtrak and commuter trains, which involves the relocation of Pennsylvania Station one block west from its current midtown site to the Beaux Arts-style former post office, is one of the toughest projects Paterson inherited when he took office in mid-March after Spitzer’s resignation.

Paterson said it might take a couple of months for him to determine the best approach for the station.

The original plan grew to include millions of square feet of offices and shops and the relocation of the Madison Square Garden sports arena, which sits on top of the train tracks. Madison Square Garden, however, early this month said it would not move, but instead modernize the arena built in 1968. (Reporting by Elizabeth Flood Morrow in Albany and Joan Gralla in New York; Editing by Leslie Adler)