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The New York Wheel and Tompkinsville – Wasted Money – Medium

Last September my friend and I decided to take the Staten Island Ferry across New York Harbor and back. It was a cool night, there was a nice view of the Statue of Liberty and, most importantly, it was free.

The “Staten Island Shuffle” has become a more popular activity for New York sightseers in recent years; according to the city’s records more than 23 people ride the ferry a year and nearly half of those weekend riders are now tourists. Various newspapers and businesses estimate that three to four million visitors take the ferry every year. This makes sense because tourists save time and money they might have otherwise spent on the numerous private boat tours in the area.

These subsidized trips should be great for Staten Island businesses because every week the city government is essentially encouraging people to visit the borough. Visitors should be going onto the island to spend money, draw publicity and possibly even consider moving in. But they don’t

If you adventure out of the ferry terminal there is little to entice you further; besides a minor league baseball stadium there are few nearby stores or attractions. The lighting gets dimmer, there is minimal signage and at night the nearby streets are nearly silent. This is where the New York Wheel comes in.

The Wheel is record-high Ferris Wheel being built right outside the ferry terminal and it is meant to be a star attraction to pull tourists onto the island. Designed to stand more than four times as high as Coney Island’s Wonder Wheel, the New York Wheel is being built to a capacity of 1440 people. Riders will rise and see the New York skyline at level of skyscrapers themselves. The problem is that this project was meant to be finished three years ago.

The Wheel’s construction with a nearby shopping complex was promoted back in 2013 to stimulate the waterfront economy of Staten Island. With $230 million of private funding, then-mayor Michael Bloomberg announced the Wheel would be running by 2015. But soon the date was pushed back to 2017. Then it was pushed back to 2018. Now developers aren’t certain about a date and costs have risen to $590 million.

Although this is not a government project, representatives of the shareholders have admitted that many of their clients are eb-5 investors. This is the Green Card fast track for people that invest $500,000 or more in job-creating projects in the US. It’s no coincidence that the developers estimate the Wheel will create 600 permanent jobs. But as construction has dragged, these investments have become riskier and the investors have become worried.

Furthermore, Crains New York estimates that the New York Wheel would have to draw three million people a year (at $35 a ticket) for at least five years to break even. That’s about the same number of visitors that the Empire State building gets and a bit less than the Statue of Liberty. It would also require that almost every tourist on the free ferry pay to ride on the Wheel.

The Wheel may still meet its great expectations, but its constructions has already wasted an extraordinary amount of money. Based on public estimates (adjusted for inflation) the costs of similar Observation Wheels was far below New York’s cost. The London Eye (2000) would have cost about $163 million, the Singapore Flyer (2008) cost about $193 million and the Las Vegas High Roller (2012) cost about $196 million. In these expensive, populated cities the average Mega-Wheel costs less than $200 million.

Although New York City is a notoriously expensive place to build, the costs of construction on Staten Island should not be wildly different from Singapore or London. According to Curbed New York, the costs appear to be from defective materials and disputes between the developers and contractors. These are preventable problems and the difference in what an average Wheel’s cost and New York’s cost is more than $390 million.

If tourism developers wanted to waste nearly half a billion dollars, they could have done so a lot more creatively in nearby Tompkinsville. The neighborhood, made famous by the Eric Garner case, is a residential section of Staten Island that includes various stores, temples and metro stops as well. According the census and private analytics firms like Point2home, the average Tompkinsville home is worth around 250–350 thousand dollars. If a builder includes cars, furniture and other amenities, the average Tompkinsville home may go up to 500 thousand dollars.

So, the cost overruns of the New York Wheel equal the value of about 780 Tompkinsville households. If developers had wanted to waste the money more creatively, they could have purchased nearly 50 blocks of residences, fenced them off and turned the area into a museum.

These developers could have paid every person within this radius to abandon their homes, and then just let the site run fallow. Once they fenced off the perimeter, they could charge admission and demonstrate what New York would be after people left. Visitors could explore homes, stores and public spaces to see how the environment changes. Each visit would be different, and each building would be unique.

Compared to building an Observation Wheel, the extra monetary costs of buying houses are minimal. Based on Salary.com, hiring 40 security guards a year costs just over 100 thousand dollars, hiring 40 customer service representatives is nearly the same, and hiring five curators a year totals less than 300 thousand dollars a year. Paying for a team of real estate agents, curators, security guards, customer service representatives and interns could conceivably cost less than a million dollars a year. Fencing around 50 average Tompkinsville blocks (based on Google maps) with six foot high Ameristar fencing would total around 1.5 million dollars.

This project would certainly involve forcibly removing people of color from their homes, and would be wrong to implement. But since foreign millionaires have already spent $590 million on an Observation Wheel, think about the following question in a vacuum.

Would you rather ride on a half-billion-dollar Ferris Wheel or walk through a totally abandoned neighborhood in Staten Island?


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