TRD: Related Companies, which built Hudson Yards, said to be developer interested in Atlantic Yards/Pacific Park railyard sites

Related in talks to take over Pacific Park megaproject, the Real Deal reported last night, noting that The Related Companies, having built (the first half of) Hudson Yards, has experience decking over below-grade railyards. TRD couldn't get any more details.

Related, a privately owned company, as of 2023 was the ninth-largest owner of apartments (75,023) in the country.

It would presumably buy development rights--or, more precisely, the entities, in foreclosure, that can control development rights--to six towers over the Vanderbilt Yard, approved for some 3.5 million square feet of development.

Questions pending

What's unclear, for now, is what concessions Related would request from Empire State Development (ESD), the state authority that oversees/shepherds the project. As I wrote on Twitter/X, it shouldn't be behind closed doors.

ESD said last week it was expecting a proposal from the "lender"--actually the middleman "regional center" that recruited the investors, the U.S. Immigration Fund, allied with the Fortress Investment Group.

The current master developer, Greenland USA, pledged to build 2,250 affordable housing units by May 2025, but faces $2,000/month fines for the 876 unbuilt apartments. Surely Related would want to waive, extend, or renegotiate that agreement, and possibly gain other concessions.

What about Site 5?

It's unclear whether Related would have any role--ally with Greenland? buy out Greenland?--regarding the remaining parcel, known as Site 5, catercorner to the arena.

While approved for a substantial, 250-foot, 439,050 square feet, Greenland has since 2015-16 aimed to transfer the bulk of the unbuilt flagship tower, B1 (aka "Miss Brooklyn"), once slated to loom over the arena, across Flatbush Avenue to create a giant, two-tower project, more than 1.1 million square feet.

But that requires ESD approval, after a public process to revise project documents.

How did this emerge?

The railyard development rights were offered as collateral for $349 million in loans to immigrant investors in the EB-5 investor visa program, with $286 million left to repay. An auction has been postponed four times. 

With Greenland unable to pay the debt, the collateral is controlled by the USIF, with Fortress, both of which declined to comment to TRD.

Someone knew?

From The Closing: Andrew Kimball, a July 2024 Real Deal interview with the head of New York City's Economic Development Corporation, or EDC:

Q: Is EDC involved at Atlantic Yards?

A: No, that’s entirely Empire State Development Corporation. That’s their baby. I will say there was a period of time when I think I was one of the few people in Park Slope that actually supported that whole redevelopment. It has taken a long time for all the housing to get built, but that’s partly because there were 30 different lawsuits and a major recession. But it is happening. I think that final piece, the state is determined to move forward.

Well, the EDC was involved in the early stages, supplying over-optimistic economic predictions as part of the city's direct and indirect support.

Blaming "30 different lawsuits" is, of course, a huge exaggeration, but that echoes the standard line of developer Forest City Ratner and its alumni/allies. There were probably more than 30 judicial decisions, but not lawsuits.

Is Atlantic Yards happening?

Yes, I'd bet that the state, ESD, is "determined to move forward," based on what was revealed at last week's meeting of the Atlantic Yards Community Development Corporation regarding plans for the railyard towers and Site 5.

Surely Kimball has access to more inside information than most people.

What remains to be seen is what kind of concessions and renegotiations would be involved.