MTA Reaches $1B Deal with Related, Goldman Sachs

NEW YORK CITY-The Metropolitan Transportation Authority has confirmed that they have conditionally selected Related Cos. and Goldman Sachs to develop the air space over the two development sites at the Hudson Rail Yards here, as GlobeSt.com reported . A special meeting of the MTA Board has been called for this Thursday to seek authorization for the $1 billion deal.

Marc Francis, president and CEO of the Great Neck, Long Island-based Delphine Real Estate Advisory Group Ltd., a boutique real estate investment bank, wasn’t surprised of the news. Last week, he told GlobeSt.com that Related would be the one to “get it done.” He explains to GlobeSt.com that he has watched the firm close for years and even performed a lot of legal work for them during the late 1980s. “They are a big company, with all of the relevant development and management components, but they are sharp and aggressive like a small company,” he explains to GlobeSt.com. “They are also very well connected.”

Hudson Yards

According to the MTA, the Related/Goldman Sachs plan will transform the Western Rail Yards into a dynamic mixed-use neighborhood. The community will feature sustainability and extensive affordable housing, centered around an expansive public space.

Gov. David Paterson said in a press conference Monday that “the decision by a joint venture of Related Cos. and Goldman Sachs to invest in the redevelopment of the Hudson Yards demonstrates a renewed commitment to the future of the City and region. This agreement highlights the resilience of public-private partnerships in the face of the national economic downturn that we are experiencing. An alliance between Related Cos.–one of the country’s premier real estate firms–and Goldman Sachs–a global financial leader–will lay the foundation for a reimagined Far West Side that will expand the Midtown business corridor and further strengthen the City and State economies.”

In Oct. 2007 the MTA received proposals from five real estate development firms for both yards. The proposals were evaluated over several months and after negotiations with several of the proposers, the Selection Committee recommended the Tishman Speyer proposal to the MTA Board in March. Less than a week after negotiations reached an impasse with Tishman, the MTA reached an agreement with Related/Goldman.