NEW YORK CITY—With much of construction under way and in light of the city's hearty embrace of the project, it's easy to think that Hudson Yards came together smoothly. But in fact, there've been numerous compromises along the way between the developer, Related Cos., the Metropolitan Transportation Authority and interested parties.
Officials involved with the project last week revealed some stories from behind the scenes—as well as a regret surrounding development that wasn't done—during a panel discussion Downtown hosted by Stroock & Strook & Lavan.
“There's a symbiotic relationship between transportation and real estate in New York,” said Michael Horodniceanu, engineer in chief at the MTA. “The density is so high and the only way you can prosper is having the transportation. If you bring the transportation, development follows.”
The alliance between transit and Hudson Yards—including the extension of the Number 7 train and the MTA's trust in Related to build a functional platform over active LIRR rail yards—was a major factor in attracting JP Morgan Asset Management to the project, said Hilary Spann, managing director of acquisitions.
“The only building in the complex on terra firma is 10 Hudson Yards so we had to believe the platform would be built and the commitment of the other parties—including the city, state, MTA, Related and Oxford Properties Group—was key.”
The newness factor also was a driver, she noted. “We wanted to own a best-in-class office building in New York but that's tough to do here because the average age of the office stock is over 50-years-old. With Hudson Yards, we got in on the ground floor of what will be one of the most exciting developments in the country.”
In addition to the construction, Hudson Yards has some new factors in its development. “When we moved the air rights from the Eastern Rail Yard to the north, we were the first company to do that when we closed on 55 Hudson Yards last year,” said Andrew Cantor, VP of development, Related. “That was a great collaboration with the city that allowed for the funding of the 7 train extension.”
In spite of all these accomplishments, the MTA could've done more, were it not for funding, admitted Horodniceanu. “I would've liked a station at 41st street and 10th ave. but it didn't happen because of the budget. We looked at the possibility after everything was financed and our stations are the most expensive component of the system, they cost $500 to $750 million each to develop.”
Now, he added, “We're looking for investors. We need robust investment in our infrastructure to grow. It's a must for us to go forward.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
