As GlobeSt.com reported on Monday, the deal is essentially the same as the one which had collapsed a week earlier, after MTA and Tishman Speyer reached an impasse over the Western Rail Yard, which still needs to go through the full rezoning process. At a news conference on Monday, Elliot G. Sander, MTA's executive director, noted that the need to rezone the Western Rail Yard was not an issue for Related as it had been for Tishman, "so we were able to proceed at the point where we had left off."
Stephen Ross, chairman of Related, said at Monday's news conference that his company was so enthusiastic about a second chance at the Hudson Yards project that it stepped up to the plate even without an anchor tenant to replace News Corp., which walked away from the project 24 hours before final bids were due. "When we got a second opportunity, we didn't waste any time," Ross said. "We jumped on it."
At the conference, Ross said his company's eagerness to get back into the Hudson Yards project had nothing to do with the uncertain future of the Moynihan Station project, on which it is a partner with Vornado Realty Trust. He noted that Related has "a great track record" with MTA, having bought the parcel of what became the Time Warner Center from the authority.
Before construction of any buildings can begin, Related and Goldman Sachs will first have to construct a platform over the existing rail yards, which are in active use by MTA's Long Island Rail Road. Cost estimates on constructing the platform have ranged up to $1 billion. Jeffrey Blau, president of Related, said at the conference that financing of constructing the initial platform will be done "with equity. Goldman Sachs is really our financial partner here, but we will bring in additional limited partners throughout the process."
Another key component of Far West Side progress is completion of the long-planned extension of MTA's No. 7 subway line, which will now terminate near the Hudson Yards development. Ross at the conference said his company has been assured that the 7 line and other infrastructure will be completed in time, "and we feel comfortable with that."
According to a statement from MTA, the current timetable calls for the authority to enter into a contract with the Related and Goldman Sachs "within the next few months." The environmental and public review for the Western Rail Yard was expected to be completed "by the end of 2009." Construction on the Western Rail Yard component of the project could then begin; the Eastern Rail Yard was rezoned in Jan. 2005.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
