This is definitely not a done deal--NYC has solicited proposals from many institutions, and it's not certain they will do the project at all. The NYT has a nice overview here: http://www.nytimes.com/2011/04/27/nyregion/bloombergs-big-pu...
http://community.nytimes.com/comments/www.nytimes.com/2011/0...
It's interesting to hear the varied opinions from residents of NYC, some of who are angry about public dollars going toward a private institution while the public schools in NYC struggle. Also interesting are the varied opinions on competition in NYC: some love it, while some wish the money went towards the incumbents such as Columbia, etc. Personally, I think that the competition could help raise everybody's game in Applied Sciences area in NYC - at least that's the hope.