For the Metropolitan Transportation Authority, the sale of the Hudson Yards space basically represents free money. All they have to do is sign the contract for the rights to develop the 26 acres on the far West Side above the train tracks, and $1 billion will be theirs.
But for months, the MTA has sat on this deal they have worked out with Related, and now the transit agency is blaming no one but themselves. Via Eliot Brown at The New York Observer’s The Real Estate blog comes the odd news:
The deal to put $15 billion in residential and commercial development atop the M.T.A.’s West Side rail yards has hit a delay, as the agency will not sign a contract with developer Related Companies this week, as was originally scheduled. The state authority says it has reached an agreement with Related (which is in a joint venture with Goldman Sachs) to push back the deadline for signing a contract for the property by another 90 days, as the M.T.A. has been slower than expected in producing the needed paperwork.
“We have together agreed on an extension of the designation period,” said Gary Dellaverson, the CFO of the M.T.A. (who has to have one of the least enviable jobs in government these days). “Our expectation was that the documents would have been turned a month and a half ago.
“This is my fault—the fault of the M.T.A.,” he said. “This is not a product of either Related or Goldman or their lawyers.”
For his part, Dellaverson doesn’t believe the economic slowdown will force Related’s hand. “I don’t have any indication, and they haven’t brought anything to me that would indicate slowness or desire to delay on their part,” he said to Brown. “Everything that I’ve seen, is they’re continuing to operate in good faith and pursuant to a desire to consummate the transaction.”
Now, this confidence is all well and good, but this news — coupled with yesterday’s examination into Dellaverson’s risky investment strategy — makes for a rough week for the MTA’s CFO.
It’s not a good time to be in charge of money, but so far this week, as the MTA heads into an emergency budget meeting next week, we’ve learned that Dellaverson OK’d some risky investment strategies and hasn’t yet seen fit to push forward on a $1 billion windfall deal for the MTA. What other motivation could the MTA’s money man need?