MTA, Related Agree on Extension

NEW YORK CITY-Related Cos. and the Metropolitan Transportation Authority have reached an agreement to keep negotiating on a Hudson Yards development deal for up to a year. Under terms of the agreement, Related will pay MTA an $8.6-million non-refundable fee in exchange for the extension of Related’s “conditional designation” as the developer on the project, which was valued last year at $1.1 billion. The two sides were unable to reach final terms on a deal by the deadline of Jan. 31.

In a joint statement from MTA and Related, which is partnering with Goldman Sachs on the project, “the economic downturn and collapse of traditional commercial lending” were blamed for the inability to finalize a contract on the 26-acre development site. “Nonetheless, the MTA and Related/Goldman remain fully committed both to the Eastern Rail Yard and Western Rail Yard projects and the business terms of the deal,” according to the statement.

Up to half of the $8.6 million payment may be used to offset expenses incurred by MTA, the city and Related as they move forward on the project. Primarily these expenses would stem from the rezoning process for the 13-acre Western Rail Yard, which must still go through the Uniform Land Use Review Procedure. The Eastern Rail Yard was rezoned in 2005.