An Abundance of Billionaires Stalls Hudson Yards West

Westside rail yards in Manhattan. Photo by Gary Hershorn/Getty Images.

Hudson Yards West almost feels as if it was designed as a test case for the thesis of Abundance, the recent book by Ezra Klein of the New York Times and Derek Thompson of The Atlantic. The long-awaited development project, slated for 13 screws of abandoned rail yard on the west side of Manhattan, would bring thousands of new apartments, hundreds of them designated as affordable, plus expansive new parks and thousands of union jobs. Yet the project keeps stalling.

Klein and Thompson have faced no opposition to their accurate claim that the U.S. ability to build large projects has deteriorated, even and particularly in blue states where hostile Republicans can’t be blamed. The question is whether the obstacle to that growth is well-intentioned regulations that give too much power to environmentalists, busybody neighbors known as NIMBYs, and labor unions, or whether it stems from concentrated financial power—in the form of billionaires, monopolies, or both—who benefit from stalled projects.

In the argument over Hudson Yards West, which has been going on since at least 2009, most of those players are on the field. The question is what should go there and, crucially, who should get to decide. The proposed project included a major casino, but that was successfully beaten back, with Wynn Resorts withdrawing the application amid opposition. The loss of the casino led to a rejiggering of the project, which added new housing, such that it now includes 4,000 housing units, a quarter of them to be designated as affordable. The project would include a new public school and 6.6 acres of public parkland.

The environmentalists, in this case, are less of a factor given that nobody is desperately trying to conserve a rusty, abandoned rail yard. The NIMBYs, though, are in full force: the nonprofit group “Friends of the High Line” has raised concerns about obstructed views among its many high-minded objections, and was instrumental in blocking the casino.

Then, last week, the city council punted a hearing on the project to June. Textbook NIMBYs appeared to have struck again.

Yet a closer look at Friends of the High line suggests more is at play than mere neighborly affinity for the status quo and discomfort with gambling. In fact, a rival casino owner played a leading role in stopping it.

The organization was founded in the 1990s with the goal of preserving the elevated tracks running through the industrial areas of Manhattan’s west side. Barry Diller and Diane von Furstenberg have since given the organization some $35 million to boost its efforts, and the group succeeded in turning the tracks into an unconventional elevated park snaking its way through the city. The group is now the leading opponent of the Hudson Yards West project.

Diller, of course, has no moral qualms about gambling, sitting on the board of MGM Resorts and holding a billion-dollar stake in the company through his firm IAC. MGM is competing for a casino license in Yonkers and got a boon when the gambling den gave up the effort in Manhattan. That means much of the delay can be chalked up not to meddlesome environmentalists but rather casino owners competing for scarce licenses.

Robert Hammond, meanwhile, is executive director of Friends of the High Line, and was a co-founder of the organization. He’s now president of Therme Group US, which develops wellness destinations and is presumed to be interested in the railyard as a future site. Hammond remains connected to Dillon as an employee of the billionaire’s Pier55 Inc., which built the undulating park and performance space that sits in the Hudson River, known as “Little Island.”

Councilmember Erik Bottcher, who represents the neighborhood where the Western Rail Yards project would be built, endorsed it in May of last year after the casino pitch was withdrawn. Friends of the High Line celebrated the departure of the casino and has spoken in vaguely favorable terms publicly about the latest iteration of the project, but behind the scenes, according to sources involved in the process, have been working to jam it up. Neither FHL nor Bottcher responded to a request for comment.

So is abundance being denied to New Yorkers by do-gooders or by billionaires? In this case, and there are many such cases, it appears to be do-gooders who are funded by billionaires. And while we could indeed attack the nonprofit groups slowing the project down, or identify and repeal the procedural obstacles they’ve exploited, the true power lies behind the NIMBY throne and they’ll always find another way to exert themselves. Pouring money into a typical city council election or spending lobby a local government is a rounding error for a billionaire. And some level of permitting and community involvement is unavoidable in a republic like the United States.

What is comforting about the argument behind Abundance is that it points an easy path forward: If liberals would just get out of their own way, their dreams can be realized. The case of Hudson Yards West shows that the real enemy of getting stuff built is not the culprits that Klein and Thompson point to. Our problem is that we have too many billionaires with too much power and too many interests at cross purposes with our own or with each other. Though daunting, the influence of billionaires is not impossible to overcome, however. The last Gilded Age filled out political economy with too many plutocrats—we still know their names: Rockefeller, Carnegie, Mellon—yet the combination of a labor movement coupled with an antitrust push saw them cut down to size and a semblance of balance restored to democracy and to the economy. Both world wars, as economist Thomas Piketty argued in his book Capital in the 21st Century, also played a significant role in reducing wealth inequality in the least desirable way possible, by simply destroying a sizable amount of the accumulated global wealth. Fingers crossed, that won’t be needed to accomplish the task again this time around.

In the meantime, the American public does seem to analyze the situation with sophistication. In new polling commissioned by the anti-monopoly organization Demand Progress, an overwhelming number of voters said that they believe that regulations preventing the government from improving their lives are put there "because big corporations have influenced the government to protect their own interests." A full 75% of respondents agreed with that statement, with 39% agreeing “strongly”—an unusually high level of agreement among voters in a divided country. When voters were given the Abundance argument, they were less convinced, with 52% agreeing that “organized interest groups and community groups” were exploiting regulations to stand in the way.

In the American system, whoever can get government sign-off, licenses, and, generally, government subsidies gets to decide. In the Chinese model, to which the U.S. is compared unfavorably in the Abundance book when it comes to its ability to complete projects, the government there takes more of a leading role in setting economic strategy and driving projects forward. In Hudson Yards, and in the country at large, we’ve left it to casino moguls to fight over, while wondering why we never win.