scrapped plans cost far more relocate Tishman Speyer bog down
Less than a week after the Hudson Yards deal collapsed, MTA revealed a new one on essentially the same terms. The winning bidder this time was the Related Cos., which had pulled out of the previous round after its anchor tenant, News Corp., walked away. The May 19 agreement includes assurances that MTA will complete the extension of the No. 7 line by the time Hudson Yards is built out. It also gives the developer an option of suspending annual rent payments for up to two years if a lack of office tenants puts construction on hold.
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Yet experts see Hudson Yards as a long-term project. "Related isn't planning for this real estate market; they're planning for the next one and the one after that," says Bob Yaro, executive director of the Regional Plan Association, which has long advocated mixed-use development on the Far West Side.
However, Yaro and others point out that the 26-acre Hudson Yards project is only one component of transforming the largely industrial district. It may not even be the most important piece of the puzzle: some influential voices say the real catalyst for redeveloping the Far West Side is Moynihan Station.
Among those voices is that of Sen. Charles Schumer (D-NY), who points out that there's six million sf of class A office space in the Penn Station area compared to 36 million sf near Grand Central Terminal, even though more than twice as many commuters use Penn Station. Last month, Schumer reiterated his call for jump-starting the Moynihan Station project and putting the Port Authority of New York and New Jersey in charge.
Kent Barwick, president of the Municipal Arts Society, which advocates a redeveloped Penn Station, says he "couldn't agree more. This is one of the most important projects for the future of this city, for a couple of reasons. One is that it's a transportation project; it's essential to strengthen our connections to the rest of the country. Secondly, of all the things that one might do, this is the most important in terms of creating access to the West Side. We're aspiring to build a new city over there, one that's roughly the size of downtown Seattle. It's just not going to happen unless it's convenient and easy to get to."
As a gateway not only to the Far West Side but also to the city itself, a redeveloped Penn Station could energize the commercial office market the way Grand Central did for its own district. "The site almost demands that the public sector give it the highest priority going forward," says Richard Anderson, president of the New York Building Congress. "That's where you should put development." He cites Penn Station's accessibility and capacity: with 550,000 daily users, it's the busiest transportation facility in the US.
And that daily traffic may only increase. "As the price of gas goes up and flying becomes more inconvenient because of security, we think there's going to be more and more rail travel," says Barwick.
Advocacy groups such as RPA and MAS argue that the station's levels of convenience and aesthetic appeal need to be elevated along with its capacity, especially if it's going to serve as the centerpiece of a mixed-use project that could include as much as one million sf of retail space. The original Pennsylvania Station, built in 1910 and demolished half a century later, was conceived as just such a centerpiece for large-scale development that never took place.
"We would love to see the broader concept—the one that involves moving the Garden—fall into place, but we're enthusiastic about doing the Farley building whether that happens or not," says Barwick. "We think the late Sen. Daniel Patrick Moynihan had a great idea to create this additional capacity and in the bargain a grand space like Grand Central. If we can get the broader idea back together, terrific—provided it's on reasonable terms. We don't want to spend all this money to preserve and restore the building and then see it trashed by poorly thought-out commercial decisions. We're optimistic that New York will not miss this chance."
For past GlobeSt.com coverage of the West Side, click on the stories below.
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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.
