Whither Hudson Yards, again?By
The Hudson Yards area, it seems, is doomed, and the MTA may suffer a financial hit because of this curse.
Last May, after months of public and private wrangling, the MTA saw its first $1-billion bidder pull out of the Hudson Yards project. Shortly after that Tishman Speyer deal for the rail yards died a painful death, Related Companies swooped in and signed a similar deal. The Related deal, it seems, may join the Tishman plan in the great Hudson Yards in the sky.
Erik Engquist of Crain’s first reported on this development earlier this week. He writes:
If the Metropolitan Transportation Authority and the Related Cos. cannot reach a deal on Hudson Yards in 10 days, the $15 billion project could end up being postponed indefinitely or never being built.
The authority and the developer have until Jan. 31 to sign a contract, which would trigger a schedule of payments that could ultimately bring close to $1 billion into MTA coffers. But the sinking economy and a paucity of financing are pressuring both sides.
Given the uncertain market, Related would like to avoid commitments of scope and schedule that threaten the profitability of the project. At the same time, the developer wants to move forward and not forsake the $11 million deposit it put down last May.
Both sides in the Crain’s article are saying the right things. “Hudson Yards continues to move forward,” Joanna Rose, a Related vice president, said to Engquist. “We remain focused on the various governmental and required reviews that continue to progress and are working closely with the MTA, the Department of City Planning and the community.”
But with MTA CEO and Executive Director Elliot Sander calling the negotiations “very sensitive,” it’s easy to see a collapse in the near future. With this deal on the rocks — and the Atlantic Yards deal treading water for another year — the MTA’s capital budget may suffer. These mega-projects were to bring in over $1 billion, and if they both fall through, the MTA will have to scramble to replace the funds.
Meanwhile, as the Related deal teeters on the brink, the city’s commitment to the 7 line extension remains in place. No matter what happens, the city will fund the construction of the 7 line from its current Times Square terminus to 34th and 11th Ave. While there may be no development on the Hudson Yards area for a decade, at least the subway will serve the area. With more pressing projects on tap, that hardly seems like a good use of funds to me. This could turn into quite the boondoggle.