Wednesday, December 14

Massive Hudson Yards Project Faces Ballooning Finances

The West Side Rail Yard, by 2020, will be hidden under billion dollar platforms, residential and commercial skyscrapers, and a strip park. The total cost for this massive Hudson Yards project amounts, in a recently challenged estimate, to $3 billion. The MTA has chosen Related Co., whose work includes the Time Warner Center, as the developer.

“Creating a whole new neighborhood that will be the Rockefeller Center of the 21st Century and beyond is truly humbling,” said Stephen Ross, founder and Chairman of Related Co., to the Times, “The development will be an honor, a privilege and a work of love.”
‘Hudson Yards’ is the name of the proposed plaza of commercial skyscrapers, residential buildings, and park areas which will sit on top of the West Side Rail Yard between 30th Street and 33rd Street, 10th and 12th Ave. Currently, the rail yard holds the commuter trains operated by the Long Island Railroad.

The plan is expected to be complete in 2020. A number of new structures will , such as a new school for the zone, a city-mandated cultural center (or “Culture Shed”, as developers and designers of the site have it named), and a 51-story skyscraper with 1.7 million square feet. The structure’s main tenant, occupying 600,000 square feet, will be American luxury leather-goods manufacturer Coach. Estimations of the development are at expansions of 12 million square feet, or two times the size of Downtown Seattle.
Credited to New York Daily News
Coach became the first anchor tenant when the company agreed to occupy a building, originally  expected to be completed by 2015. The tower, to be built on 30th and 7th, can be built without decking over the train tracks. The 70-year-old company has been a player in the Hudson area for years, and many consider it to be a perfect fit for the new building.The building, according to Wall Street Journal writer Robbie Whelan, has a special elegant touch befitting of its new partner: “The southern building, which would house Coach, is, sensibly, the female of the pair —slightly shorter, with the atrium manifested as a slit in the dancer’s ball gown, giving a glimpse of a flash of leg underneath.”  

“Finally, we’re going to give you a building as nice as your pocketbooks,” stated City Council Speaker Christine Quinn in a press conference.
However, Related will need several new tenants before beginning work on the new ‘Rockfeller Center’. Crains New York estimates that the decision by Related to move ahead with the platform without other tenants is an indicator of the company’s faith in the future of the Yards.
One major reason for Related’s confidence is the linkage in which its new properties will be joined to the rest of Manhattan. The extension of the 7 train to 11th Avenue will end stop at a station located on 34th and 11th near the Javits Convention Center. There has also been consideration to extending it even farther to the Secaucus Junction Train Station in New Jersey, all set to be completed in the wintertime of 2013.
This November,  MTA workers were adding some finishing touches: tracks, station fixtures, and signals.
"If you ever did a kitchen, they bring the cabinets, but the finishes count," said MTA Capital Construction President Michael Horodiceanu, in a commment to NY1,"Here is the same thing. The concrete, the walls are in place, but to get the finishes right takes time." The MTA estimates that by 2025, it will be the busiest subway system in New York City.
Credited to Jake Schabas for Untapped Cities

The cost and timeliness of the train is a contested issue. In a recent article, NY Daily News reporter Juan Gonzalez reported that the city has hidden more than $10 million in infrastructure costs for the Hudson Yards project. It stated that in an effort to maintain the appearance that the project is still under its $3 billion budget, costs for certain infrastructure improvements have been classified as belonging to other budgets. Gonzalez reports that “An Independent Budget Office analysis done at the Daily News’ request has found more than $160 million spent or earmarked for Hudson Yards infrastructure improvements.”

Adding to the mix is a report done by Jake Schabas, a journalist from Untapped New York,  that none of the subway extensions are being paid for by the MTA. He reports that, “All funds are coming through the City via the future property tax revenues that the Hudson Yards Redevelopment projects are expected to generate, a financing method known as tax increment financing.”

However, construction is eleven months ahead of schedule, and is expected to meet its 2013 opening date.

Due to the scale of the project, potential issues with tenants and construction, and the extension of the 7 line, the Independent Budge Office estimates that the city could ultimately inherit a $500 million debt from the Hudson Yards project.

Despite rising costs, Mayor Bloomberg sees the Coach tenant deal as an indicator of future economic activity the West Side can bring.

''This deal means that the market has spoken, the mayor said in an announcement, flanked on both sides by city officials, developers, and real estate executives, “The Far West Side's economic potential has now become an economic reality.”

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