Atlantic Yards/Pacific Park Report

From the New York Times today,  Penn Station Plan Makes a High-Stakes Bet on the Future of Office Work , regarding Gov. Kathy Hochul and her Empire State Development (ESD, the state authority that also oversees/shepherds Atlantic Yards/Pacific Park) and their backing for ten mostly office towers  around Penn Station, mostly owned by Vornado. There are lots of questions around the demand for office towers, especially in this 33-acre site, as well as the tax breaks and financing, which has prompted skepticism from, among others, former MTA Chairman and "wise man" Richard Ravitch. And at Hudson Yards? Another reason for skepticism is the very mixed results at Hudson Yards, which awaits a deck over the second half of the project. From the article: Underscoring the shifting ambitions of Hudson Yards, Related has tried to renegotiate its existing agreement with the M.T.A. for several years, according to two people familiar with the efforts. The developer had pledged to build si...

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 sma...

New York Post real estate columnist Steve Cuozzo offers a full-throated defense of, and paean to, the new Hudson Yards complex, pushing back on all doubters and detractors, published last night as  Hudson Yards is finally ready to revamp Midtown West . From the column: Attempted parallels with other major urban complexes fall flat as well. Hudson Yards isn’t geographically and atmospherically remote from the historic central city like London’s Canary Wharf — it’s 10 minutes on foot from Penn Station and a three-minute ride from Times Square on the 7 train. It’s no grafted-on appendage to Manhattan like Battery Park City, which is built on Hudson River landfill. It mocks Brooklyn’s Pacific (née Atlantic) Yards where a few, unrelated buildings are widely scattered over still-exposed rail tracks. Note: he called the project Pacific Yards, not Pacific Park. Yes, the buildings are somewhat scattered near "still-exposed rail tracks," with two towers flanking the arena, wh...

Rosy projections should be taken with a grain of salt regarding big development projects, right? From the Wall Street Journal, 4/23/13,  Hudson Yards Woes Leave City on Hook : When the city agreed to pick up the tab for the extension of the No. 7 subway line to ease the creation of a new office and residential district on the far West Side, it expected the project could begin paying for itself as early as 2008. Instead, a single 1.7 million square-foot office tower in the Hudson Yards area has broken ground, while the project envisions 25 million square feet of new office space. And the district generated 40% less revenue from taxes and other development fees than projected between 2006 and 2012, according to a report to be released Wednesday by the New York City Independent Budget Office. Hudson Yards was expected to produce $283 million in revenue through 2012, but it actually created $170 million, according to the report by IBO, an independent city agency that studies the local...

Brookfield's planned deck The news that Brookfield Office Properties held a groundbreaking today for a 2.6-acre deck over the Hudson Rail Yards on Manhattan's Far West Side--an enormous investment for office towers yet without an anchor tenant--brings up inevitable comparisons with Atlantic Yards. After all, last October, Forest City Ratner executive MaryAnne Gilmartin said that the six planned towers over the railyard would not be constructed until seven other towers are built first, including four over the current surface parking lot. The situations are not directly parallel, since there's no office market in Brooklyn, and Brookfield does have financing .  In Brooklyn However, because Forest City has no competition for the site, and the state gave it a long leash, with 15 years to build the platform, the developer can wait. That means deviate from the once-planned schedule to build towers over the railyard--a significant, blight-removing justification ...

The Metropolitan Transportation Authority (MTA) is still at the mercy of developers who (apparently) have the ear of the governor and mayor who control the authority. Now the issue is a revised deal for the Hudson Yards, which gets far more incisive treatment from Michael D.D. White, as described below, than from the New York Times. The "bum's rush" From a Times article today headlined Railyards Deal May Still Be Weeks Away : Members of the authority’s board, who received details of the deal on Sunday, expressed frustration that they had no time to review the plan before being asked to approve it. “I really feel that in these big developer deals we get the bum’s rush,” said Doreen Frasca, a board member. The finance committee issued no recommendation on the plan. And last June? When the revised Vanderbilt Yard deal was revealed last June 22, Frasca said, "This is just an observation, and I know staff has worked very long and hard on this, including into this...

(This is one in an irregular series of articles about issues that a State Senate committee might address when it holds a hearing on Atlantic Yards.) The first part here mostly reprises what I wrote 12/4/06, but the issue shouldn't be ignored. It was one of the least credible statements in the Atlantic Yards Draft Environmental Impact Statement (DEIS) issued in July 2006 by the Empire State Development Corporation (ESDC): The project site is not anticipated to experience substantial change in the future without the proposed project by 2016 due to the existence of the open rail yard and the low-density industrial zoning regulations. The Park Slope Civic Council and Park Slope Neighbors challenged that, commenting that a city rezoning could do just that, though it would "involve professional planners whose job is to advance the public interest, rather than a reliance on private interests to establish de facto zoning." ESDC punts In the Final Environmental Impact Statement, ...

If you want a one-stop critique of megadevelopments and major projects in New York City, go to Michael D.D. White's latest Noticing New York post, headlined UN-FUNNY VALENTINES ARRIVING LATE: YOUR COMMUNITY INTERESTS AT HEART . There White takes on stadium projects, Brooklyn Bridge Park, the Columbia University expansion, the Rudin/St. Vincent’s Real Estate Deal, and a whole lot more. Atlantic Yards, not surprisingly, is deemed "Poster Child For Everything Developmentally Bad." Site preparation + stimulus But probably the most resonant observation regarding AY comes in the segment White devotes to the Hudson Yards project, to be built on railyards that require some very expensive platforms. (The Vanderbilt Yard, less than 40% of the AY site, also would require a platform but not one as extensive.) White observes: If the government (as opposed to a private developer) was preparing the site it would not be necessary to postpone the site’s preparation at this time. Site prep...

Nearly two weeks ago, Metropolitan Transportation Authority executive director Lee Sander said that the agency recognized the pressures faced by real estate companies and that it "would not be pleasant" to see the Related Companies walk away from the $1 billion Hudson Yards deal, but "that's not an outcome we're looking forward to." Indeed, yesterday, the MTA announced a one-year extension of the “conditional designation” period, which gives Related another year to commit to the project without having to pay the the $43.5 million it was obligated by the original schedule. It will pay $8.6 million “in exchange for the extension,” up to half of which may be used to offset expenses incurred by MTA, the City and the developer regarding regarding a rezoning. The AY implication Asked whether the MTA would be flexible with Atlantic Yards developer Forest City Ratner, Sander responded two weeks ago that the agency was always "flexible and thoughtful." For...

So, would the Metropolitan Transportation Authority accede to Forest City Ratner's reported request to restructure and thus delay payment of the $100 million it owes for development rights at the MTA's Vanderbilt Yard? And would the MTA accede to the developer's reported effort to build a less-expensive interim railyard as a replacement? The person who might know, MTA executive director Lee Sander, gave no solid answer yesterday, but did acknowledge that the agency is "flexible and thoughtful" in all its negotiations. The Hudson Yards in the balance The big story from Sander's appearance at a breakfast yesterday sponsored by Crain's New York Business was the shaky fate of an even more ambitious deal: the $15 billion Hudson Yards project. The Hudson Yards developer, the Related Cos., according to the Observer , has had trouble getting financing, stopped paying its architects (sounds familiar ?), and even cut its lobbying expenditures in half. As Crain...

Presumably, the Metropolitan Transportation Authority’s (MTA) confirmation Thursday of a second developer, the Related Companies, for the Hudson Yards project , after original bidder Tishman Speyer pulled out, somewhat undermined the rationale for the Assembly Corporations, Authorities and Commissions Committee, chaired by Westchester Assemblyman Richard Brodsky, to assess the status of various projects on Manhattan’s West Side. So it’s understandable that the hearing held Friday attracted modest press coverage. To Reuters, the story was Brodsky’s provocative but somewhat theoretical suggestion that the city consider using eminent domain to condemn Madison Square Garden to effectuate a version of the Moynihan Station project. To the New York Observer, the story was MTA chief Lee Sander’s suggestion that the agency might add bus rapid transit or light rail to the West Side district, on top of the 7 line subway extension. WNYC radio reported a related story about how the Moynihan pro...

A powerful Assemblyman is calling for a "time out" on a major development, but it's not Atlantic Yards, focus of a recent "time out" rally. And that Assemblyman, Richard Brodsky, while calling for a timetable and cost-benefit analysis for megaprojects in the state, said that the focus of an Assembly committee's first hearing next week will be limited to projects on Manhattan's West Side. The New York Times, in an article Wednesday headlined City Revisits Old Bidders After Railyards Deal Fails , reported: Assemblyman Richard L. Brodsky and other critics, however, say that the authority should wait for the economy to improve, while working with a master plan to coordinate all the activity on the West Side. “These deals are breaking down because the governance system for authorities doesn’t work and because the public subsidies are out of control,” said Mr. Brodsky, a Democrat from Westchester. “We need a time out before this disaster repeats itself every...

When it comes to megadevelopments, it may be better for developers to lock in the deal, then declare (and even negotiate) a flexible timetable, as with Atlantic Yards. The negotiations over the Hudson Yards project are a notable counterexample. In an article yesteday headlined Deal to Build at Railyards on West Side Collapses , the New York Times reported: Six weeks after the Metropolitan Transportation Authority selected Tishman Speyer Properties to build a vast complex of office towers, apartment buildings and parks over the railyards on the West Side of Manhattan, the deal has fallen apart. Gary Dellaverson, the authority’s chief financial officer, said the negotiations foundered Thursday afternoon after Tishman Speyer insisted on changing the terms of the $1 billion development, which both parties had agreed to on March 26. The change would have substantially slowed the flow of millions of dollars in annual rent and fees to the authority and introduced a note of uncertainty about t...

From a New York Times editorial yesterday on the Metropolitan Transportation Authority's plan for the Hudson Yards, headlined Finally, a Vision for the West Side : The M.T.A., we are pleased to say, conducted a real bidding process. That was a refreshing change from years past when it looked as though the yards might be given away in a back-room deal. It would take a lot more vigilance and transparency to ensure that the new Hudson Yards work for all New Yorkers. And when did the Times editorialize about the not-so-real bidding process for the MTA's Vanderbilt Yard in Brooklyn, a process that began 18 months after the city and state announced their backing for Forest City Ratner's plan?