Sunday, April 27, 2014

The Port Authority is a cesspool of incompetence, fraud and self dealing

APRIL 27, 2014    LAST UPDATED: SUNDAY, APRIL 27, 2014, 9:26 AM
THE RECORD
Santiago Calatrava, who designed the World Trade Center transportation hub, was paid for unused designs for the Goethals and Bayonne bridges and retains the copyright to the plans.
ASSOCIATED PRESS
Santiago Calatrava, who designed the World Trade Center transportation hub, was paid for unused designs for the Goethals and Bayonne bridges and retains the copyright to the plans.
The Port Authority quietly paid the world-famous architect Santiago Calatrava $500,000 for bridge designs that the agency didn’t request and can’t use, records show.
The 2012 payment came after two Port Authority commissioners with ties to Calatrava privately pressed agency staff to incorporate the unsolicited designs into construction of two bridges between New Jersey and New York and helped provide the architect with insider access to pitch his plans, according to internal agency documents.
Santiago Calatrava, who designed the World Trade Center transportation hub, was paid for unused designs for the Goethals and Bayonne bridges and retains the copyright to the plans.
MARKO GEORGIEV/STAFF PHOTOGRAPHER
The transportation hub being built at the World Trade Center was designed by architect Santiago Calatrava, who was paid for his unused ideas on the Bayonne and Goethals bridges.
Santiago Calatrava, who designed the World Trade Center transportation hub, was paid for unused designs for the Goethals and Bayonne bridges and retains the copyright to the plans.
Bayonne Bridge roadway project The Port Authority plans to raise the roadway on the Bayonne Bridge by 64 feet to allow bigger ships to pass under the bridge. A design proposed by architect Santiago Calatrava, but rejected by the agency, split the roadway and put the lanes outside the arch on each side. http://www.panynj.gov/bayonnebridge/?tabnum=6
Santiago Calatrava, who designed the World Trade Center transportation hub, was paid for unused designs for the Goethals and Bayonne bridges and retains the copyright to the plans.
Goethals Bridge replacement The Port Authority plans to replace the span with a cable-stayed bridge. Calatrava proposed an arch bridge design. http://www.panynj.gov/goethalsbridge/
But Port Authority engineers and lawyers quickly rejected the designs for the Goethals and Bayonne bridges as unworkable and unneeded. And the two commissioners’ efforts on Calatrava’s behalf in mid-2011 set off alarms inside the agency. There were concerns about a lack of transparency and the prospect of lawsuits, investigations and bad publicity, according to dozens of confidential agency documents obtained by The Record and interviews with several current and former officials.
In July 2012, the Port Authority paid Calatrava for his work on the bridge designs anyway. None of the elements of his plans have been used in the ongoing construction projects — nor can they be used. An agreement the agency signed with Calatrava said the fee was essentially for the right to view the plans and compare them with the Port Authority’s own designs.
The Spanish architect, known for his sleek sculptural designs, conceived the Port Authority’s $4 billion World Trade Center transportation hub, a project beset by cost overruns and delays. The two commissioners — David Steiner and Anthony Sartor, who has since resigned — have been vocal supporters of Calatrava’s hub.
The $500,000 payment to Calatrava for the conceptual bridge designs likely never would have happened if not for the behind-the-scenes advocacy of Steiner and Sartor, despite agency attorneys’ warnings that their involvement was not appropriate.
Over several months in 2011, Steiner and, to a lesser extent, Sartor, acted as Calatrava’s boosters, multiple sources said, first with the Goethals Bridge and later with the Bayonne.
Steiner hand-delivered Calatrava’s plan for the Goethals Bridge to agency staff in March 2011. Steiner and Sartor also attended a private meeting between Calatrava’s team and agency staff to discuss the Bayonne Bridge in July 2011.
“The meetings were basically forced on the staff,” one agency official said, noting that employees also were asked to attend a private presentation at Calatrava’s Park Avenue town house.
Commissioners, who have an oversight role at the bi-state agency, are not supposed to influence decisions on who gets a piece of the billions in agency spending each year. And, whenever possible, the purchasing process is supposed to be public and open to competition.
The Calatrava plans have never been publicly released, and until now, Calatrava has not been linked to the bridge projects — among the largest and costliest in the region.
Part of the reason for this is that the amount the Port Authority paid Calatrava — $500,000 — is the maximum the agency can spend without a public vote by its governor-appointed commissioners.
The revelations come at a time when the agency’s commissioners are under intense scrutiny — from prosecutors in Manhattan and the U.S. attorney in New Jersey — for possible conflicts of interest.
The Manhattan district attorney has issued subpoenas related to votes on the transportation hub, a project Sartor was deeply involved in before he recently resigned. Former Chairman David Samson also has resigned amid the controversy, set off by lane closures at the George Washington Bridge, the agency’s signature span.
Neither Steiner nor Sartor responded to questions about their involvement with the Calatrava conceptual designs.
One Port Authority official defended the $500,000 payment on Friday, saying the alternative proposed by Calatrava forced the agency to reexamine, and affirm, plans it already had in place.
“It gave us a chance to think about our own designs and decide, ‘We don’t agree with you and we’re moving forward with our program,’Ÿ” said Peter Zipf, the Port Authority’s chief engineer, who requested authorization to make the payment. Executive Director Pat Foye signed off on the payment.
Closed-door process
Steiner, a wealthy real estate developer and generous political donor, held his 80th birthday party in 2009. In attendance when he blew out the candles on his cake — made to look like a Monopoly game board featuring his real estate holdings — were politicians and luminaries, including then-New Jersey Gov. Jon Corzine. Sartor was there. So were Calatrava and his wife, Robertina.
The extent of the relationship between Steiner and Calatrava is unclear.
But about two years later, on March 29, 2011, Steiner hand-delivered Calatrava’s designs for a new Goethals Bridge to the Port Authority. That day, Steiner, a commissioner since 2003 and an engineer, boasted that “he had obtained the design free of charge,” according to the official account of a closed-door meeting of commissioners obtained by The Record.
At that point, planning for the Goethals project was already years in the making.
The bridge between Elizabeth and Staten Island, with its undersized traffic lanes and 1928 design, was failing, both structurally and functionally. So the agency decided to replace the truss-style bridge with a design that uses cables strung from towers to support the road deck. The cable-stayed design had already received a key federal environmental approval.
Ultimately chosen, that design will cost $1.5 billion and includes three lanes in each direction, plus a center section between the roadways that can be used for future rail service.
What Calatrava proposed, however, was a modern arch bridge that would have forced the Port Authority to reverse course. It also was similar to a design the Port Authority had considered and dismissed in 2008.
But the agency’s commissioners entertained the idea.
Samson, then the Port Authority chairman, asked agency attorneys if it was possible to revisit the bridge’s design, records show. The attorneys advised against it. They also told Samson that the way the Calatrava proposal was submitted — privately, through a commissioner, and without a formal request from the agency — was a problem.
The proposal “was transmitted outside of any established Port Authority procurement process in an arguably non-transparent manner,” the agency’s top attorney, Darrell Buchbinder, wrote to Samson in an April 22, 2011, memo marked “confidential.”
Port Authority engineers also concluded Calatrava’s design was flawed and would delay the project and increase its estimated cost by $235 million, records show.
“Those plans have played no role in the project,” said a Port Authority official, one of seven current and former officials interviewed who would only speak on the condition of anonymity.
The Port Authority approved a $1.5 billion public-private partnership last April with a firm that will design, build, finance and maintain the new cable-stayed Goethals span.
Plan for the Bayonne
In the months after the Calatrava design for the Goethals was dropped, Steiner began to push for the architect’s concepts on a second bridge, the Bayonne, which spans the Kill Van Kull between Bayonne and Staten Island. Like the Goethals, planning for the project — which is intended to raise the roadway under the 83-year-old arch bridge by 64 feet to allow bigger ships to pass under it — had been plodding along for years. But it has taken on new urgency recently as a rebuilt Panama Canal with a greater capacity will soon be sending larger cargo ships to ports on the East Coast.
As the Port Authority stepped up plans to rebuild the span, Steiner and Sartor attended a private meeting on July 7, 2011, between Calatrava’s team and agency staff, according to records and a source familiar with the meeting. It was held in a conference room on the 15th floor of the Port Authority’s lower Manhattan headquarters.
Calatrava presented his plans for the Bayonne Bridge, a design significantly different from the one envisioned by the Port Authority. At least one engineer was wowed. “We saw this product that was quite amazing,” said Zipf, the chief engineer.
Instead of keeping the span’s roadway under the arch of the bridge, as Port Authority engineers had decided to do, Calatrava’s design would have placed them outside the arch, like wings.
Calatrava also criticized the Port Authority’s design — an exchange that Zipf called “a healthy debate.”
After the meeting, Steiner instructed senior staff to provide Calatrava with internal documents and information — normally not provided to firms trying to get Port Authority contracts — so he could further revise his plans.
Instead, on July 18, 2011, agency attorneys sent a second confidential memo to Samson. The memo stated that Calatrava’s Bayonne Bridge design was “not a viable option” and that it would add about $100 million to the $792 million project cost. The staff attorneys wrote that the design would “generate risks that seriously threaten to undermine the viability” of the project and warned that “there should be no further communications or review of submissions by Calatrava from this point forward.”
That same confidential internal memo, however, was sent to Calatrava by Steiner. The architect wrote a blistering response, which was forwarded by Steiner to Port Authority staff.
It is “quite troublesome that such a critical review has been made of our work without the courtesy of allowing us to either see the scheme against which we are being measured nor be granted access to even the most basic of information,” Calatrava wrote.
Three days after Calatrava sent the memo, on July 25, Sartor, who owns an engineering firm, informed a senior staff member he “would really like to explore a way to add Calatrava to our team,” according to sources.
That didn’t happen.
Before he recently stepped down, Sartor was deeply involved in the World Trade Center project, including the Calatrava-designed transportation hub, originally estimated to cost $2 billion. In 2005, before construction began on the transportation hub, Sartor traveled to Europe with a delegation of other Port Authority officials to look at Calatrava projects. He met Calatrava in Liege, Belgium and Valencia, Spain, to tour the architect’s completed works.
A spokesman for Sartor said the commissioner paid for the trip himself. He did not respond to additional questions about Sartor and Calatrava.
Sartor has faced conflict of interest questions regarding the transportation hub before.
Sartor is president of an engineering firm, PS&S, that regularly works with some of the same companies that are collaborating with Calatrava on the hub in lower Manhattan. One of those firms, STV, was in talks to purchase Sartor’s firm in 2008, at the same time Sartor was overseeing World Trade Center construction.
Payment not enough
At the end of 2011, in a meeting behind closed doors, commissioners took up the issue of whether to pay Calatrava for the designs.
They decided, according to one Port Authority official familiar with the matter, to make the $500,000 payment. It was, in part, to protect the Port Authority against any lawsuit or claim Calatrava might make about the agency’s use of his designs, the official said.
Zipf also wrote in a Dec. 13, 2011, memo to Foye, the executive director, that Calatrava’s efforts on the Bayonne Bridge design — which included six conceptual design reports, several staff presentations, an animated video, renderings and a scaled model — “were quite extensive.”
Zipf sent an agreement to Calatrava that proposed the $500,000 payment for the rights to the designs.
Calatrava, according to records, wasn’t satisfied. He demanded close to $3 million and would not agree to give the Port Authority the rights to use the plans without more money. For the next six months, the agency negotiated with Calatrava, who in July 2012 agreed to the $500,000 price but retained all the copyright and other intellectual property rights to the plans, according to an agreement.
“Santiago Calatrava was asked by the Port Authority to prepare and deliver a design feasibility study on two bridges … which included conceptual designs for illustrative purposes,” a spokesman for Calatrava said Saturday. “Santiago Calatrava did not submit proposals to build either of the two bridges, which was never in the scope of this project. He presented his study at the Port Authority and his firm was compensated for its time.”
Zipf, the engineer, said that although his department did not ask for the designs, they added value to the process. It is common, he said, for engineers to invite, and pay for alternative designs, as part of a vetting process — what he called an “independent design excellence review.”
“I think it’s a good and a healthy thing” to consider alternatives, he said. “The more you can challenge and verify your projects early in the process, the more expedient and beneficial to the public.”
- See more at: http://www.northjersey.com/news/unsolicited-proposal-earns-architect-500-000-from-port-authority-1.1003825?page=all#sthash.gaFBVbkK.dpuf

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