Skip to main content

Featured Post

Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

If Hudson Yards faces huge doubts about platform and second phase, well, that spurs questions about smaller platform plan for Atlantic Yards/Pacific Park

From the New York Times yesterday, How the Pandemic Left the $25 Billion Hudson Yards Eerily Deserted:
Even more perilous, the promised second phase of Hudson Yards — eight additional buildings, including a school, more luxury condos and office space — appears on indefinite hold as the developer, the Related Companies, seeks federal financing for a nearly 10-acre platform on which it will be built.

Related, which had said the entire project would be finished in 2024, no longer offers an estimated completion date....

Related cannot construct the second half until it builds a deck over the rail yard. The company, along with Amtrak, has been in discussions with the federal Department of Transportation about a low-interest loan to finance the platform and preserve the right of way for a new rail tunnel under the Hudson that Amtrak is planning to build.
This isn't a direct parallel with the Atlantic Yards/Pacific Park situation: the railyard in Brooklyn awaiting a platform is much smaller, there's no new Amtrak tunnel, and the Brooklyn project involves housing rather than office space.

But it's not irrelevant. Because if Related is having trouble raising money to build that platform--it's seeking more than $2 billion, the Times reported--well, it's likely Greenland Forest City Partners (GFCP) faces challenges in building the already-delayed platform in Brooklyn.

As of 2019, an executive for Greenland USA--which owns nearly all of GFCP--estimated that the platform would cost more than $200 million, Later that year, the developer said the platform would start in 2020, but wouldn't give a timetable.

The platform didn't start last year and, while the developer says they have a contractor, they remain fuzzy about timing. Part of that involves coordinating with the Long Island Rail Road. But surely some of it also involves reassessing the project's prospects.

Unlike Related, which has revised its timetable, Greenland faces the challenge of building 876 (or 877)  more affordable units by May 2025, or face fines of $2,000/month per missing unit. They have not asked for an extension--pandemic!--but I'm sure someone's thinking about it.

The EB-5 angle

From the Times:
Related is also facing pressure from its investors to deliver a fuller accounting of the project’s finances. A group of 35 investors from China — a sliver of the roughly 2,400 who contributed $1.2 billion to Hudson Yards — sued the company last year, accusing it of refusing to open its books or say when it might repay their investments.
And while that was unsuccessful in arbitration, another lawsuit from other investors is contemplated, according to the Times.

No such lawsuit has been filed in Brooklyn--the financial structures of the EB-5 investor deals are different--but it's not impossible that frustrated Chinese investors, faced with delays getting paid back and already encouraged to move their money to a purportedly better investment, might go to court.

Comments