5 Reasons Why NYU's Expansion Plan Reeks of 1% Greed
Photo Credit: New York University
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It looks like historic Greenwich Village might be getting a loud, expensive, corporate makeover—and you or your kids may pick up the billion-dollar bill.
Last Wednesday, the New York City Council approved New York University’s controversial Sexton Plan (named after NYU president John Sexton), which calls for a nearly 2-million-square-foot expansion of the Manhattan-based university that will convert Kerouac’s haunts and community gardens into ID-access-only dorms and full-priced bookstores. Many fear that the 20-year construction job, which is projected to cost between $4 and $5 billion and is opposed by residents and university faculty, will be funded by generations of future students and possibly even NYC taxpayers.
Of course, 1% real estate deals are nothing new in New York. The landscape of the Big Apple, especially Manhattan, is already a physical manifestation of power unrivaled by any other city in the United States. Despite strict zoning laws and tenants’ rights, the unchecked gentrification and ever-rising skyscrapers attest to the ability of those with money to shape New York City as deftly as a child playing with a block set. From the bulldozing of thousands of low-income units to make way for Rockefeller Center in 1932 to the building of an entire Goldman Sachs village near Battery Park in 2012, New York City is a real estate mogul’s paradise.
NYU is no Goldman. But for an institution whose mission is “a private university in the public service,” NYU’s expansion plan seems to be just the opposite: the public being bulldozed for private use. Here are the top five reasons why NYU’s proposed expansion plan reeks of 1% greed.
The Board of Trustees and President Sexton’s office have refused to release the financial plan for the expansion, but even a freshman dance major could compute the problematic economics. The $4 to $5 billion projected cost is nearly twice the university’s $2.83 billion endowment, meaning that future NYU students are likely to see a sharp tuition hike.
If the cost of the expansion reaches $6 billion, the interest alone will be about $300 million annually—which is about the same amount NYU currently generates in tuition. This means that tuition all but has to increase if NYU ever hopes to actually pay off the debt. With undergraduate tuition already at $41,000 a year, NYU students average $35,000 of debt upon graduation, making NYU already the largest generator of student debt of any nonprofit college or university in the United States.
And that’s before NYU even breaks ground on the gleaming new facilities.
Too Big To Fail
As student debt surged past $1 trillion this spring, many have speculated that this generation’s ball and chain will be the next big economic bubble. But even if student debt doesn’t collapse, there’s a chance that the financing for the Sexton expansion plan will.
According to Gregg Levine, an investigative journalist and Tisch graduate, the NYU expansion is a classic too-big-to-fail setup. “If NYU cannot service its debt, the city will likely have to bail it out, since NYU employs ten of thousands in the area,” Levine said.
Insider economic experts agree. The economics department at NYU voted unanimously against the plan, and the Stern Business School faculty voted against it 52-3.
Even the University Hates It
Speaking of faculty opposition, 37 NYU departments have already voted against the plan, and an April vote revealed that two-thirds of the entire university faculty opposed the proposed expansion. Professors have organized a protest group, NYU Faculty Against the Sexton Plan (NYUFASP), undergraduate students have organized OWS4NYU, and the Graduate Student Organizing Committee has joined the fight. The coalition has staged a string of noisy demonstrations, including a May Day picket and a “building block” street theater that highlighted how NYU is “building off student debt.”
“I love NYU, and so many others do. But when you look at what the faculty feel, they hate this idea,” said Peter Carey, a Booker Prize-winning author and contributor to the new protest book While We Were Sleeping: NYU and the Destruction of New York, which includes essays from E.L. Doctorow and Philip Glass.
“When you have an institution that you love, care about and know on the inside, it’s a shock to realize that you’re dealing with another entity, a corporation, and that it’s not in their job description to enshrine academic excellence.”
Real Estate not Classrooms
The "other entity" that bills itself as NYU but goes against the wishes of the majority of the university’s faculty is the President’s Office and the Board of Trustees, which includes the chief financial officer of BlackRock, the Vice President of JP Morgan Chase, the President of Paulson & Co., and, of course, New York City real estate moguls like William Rudin, Jay M. Furman and Lisa Silverstein. The Board’s emphasis on economics rather than education explains why only 18 percent of the proposed building would be for learning spaces, while the rest would be stores, offices and dorms. The first incarnation of the plan even included a hotel, which was nixed after community outrage. According to Levine, after 10 years of construction, NYU will have added only 40 classrooms, space that could have been made up by merely holding more Friday classes on today’s campus.
Instead of trying to increase educational capacity, NYU is growing for growth’s sake—embodying a Wall Street mentality that may increase the university’s US News & World Report ranking, but will do so at its own students’ expense.“This fight is entirely about the nature of NYU as an institution,” said Christy Thorton, a graduate student in the history department, and a member of the Graduate Student Organizing Committee.