In late March, the MTA, who owns the 26 acres of rail yards here on either side of 11 Avenue between 30th and 33rd streets along the Hudson River, selected Tishman Speyer's $1-billion bid to build up to 10 million sf of office space, 550,000 sf of retail, 3,000 residential units and 13 acres of open space. As GlobeSt.com previously reported, according to an MTA statement on Thursday afternoon, "the cause of the impasse was Tishman Speyer's attempt to change a central deal term in an effort to postpone the closing on the Eastern Yard until the Western Yard was satisfactorily rezoned."
The statement further noted that "this demand changed the economics of the proposed deals and the certainty of payments to the MTA." The statement also said that the MTA "remains committed to developing these unique and very valuable parcels of land."
As GlobeSt.com also recently reported, a spokesperson for Tishman Speyer told GlobeSt.com that this is a highly complicated deal and that "we have been negotiating in good faith with the MTA for several weeks. We share the same goal as the MTA and the City to transform Hudson Yards into a successful and vibrant community."
Despite the grim sounds, there is still a ray of hope due to planned talks between the MTA and Tishman. The Tishman spokesperson explains to GlobeSt.com that both Jerry and Rob Speyer spoke with the Mayor in London on Friday. "We look forward to meeting with the MTA on Monday. We still hope to be able to complete this deal and reach an agreement that satisfies the needs of everyone."
Marc Francis, founder and CEO of the Delphine Real Estate Advisory Group, a boutique real estate investment bank, tells GlobeSt.com that "every large deal in the current economic environment is somewhat tricky and expensive to get done, especially in a politically and procedurally complex city like New York." However, he adds, "if anyone can get it done, it would be someone like Tishman or the Related Cos."
He further explains that "in the long run, the West Side area has an incredible amount of upside, and given the land shortage in Manhattan, it is sure to get built." Francis also points out that the confluence of a weak dollar, high energy costs, and nervous lenders may dissuade the MTA from changing horses since the tendency to reprice downward is almost irresistible."
Hugh Finnegan, an attorney with law firm Sullivan & Worcester LLP, tells GlobeSt.com that "obviously, the 'impasse' will have a chilling effect on the development of the West Side in the short term." However he notes that in the long term, "given that the West Side yards and the adjoining area are really the only part of midtown, loosely defined, that is susceptible of being developed, the West Side's development is inevitable. Consider the changes in and around Penn Station and in and around the Port Authority."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
