As Related deal nears, REBNY pushes for federal assistance for 7 lineBy
With the city and the MTA at an impasse over the fate of the 7 line station at 41st St. and 10th Ave., real estate lobbyists and politicians are making a last-ditch effort to secure a federal grant for the badly-needed station. As Michael Howard Saul of The Wall Street Journal detailed today, officials from the Real Estate Board of New York and City Council Speaker Christine Quinn are going to meet with Vice President Joe Biden in the hopes of convincing the rail-friendly veep to find some of the $500 million the city needs to build this station.
“I don’t expect we will be leaving the White House with a check in our hands,” Steve Spinola, president of REBNY, said. “But it would be nice if we can identify a structure to move forward that will, in effect, make sure this station actually gets built.”
As we know quite well, the city is ponying up the $2 billion it costs to send the 7 line from its current terminus along 41st St. between 7th and 8th Aves. to 34th St. and 11th Ave. Original plans called for a station at 41st St. and 10th Ave. that would service the crowded Hell’s Kitchen area, but when costs spiked, the city scraped plans for even a shell station. It took REBNY nearly two years to grow interested in this project, but now the real estate board — which announced its support for this second station in February — calls the no-build plan a “terrible, terrible mistake.”
Meanwhile, the city and REBNY are at odds over the project’s timing. Saul has more:
Mr. Spinola said a report commissioned by the board suggests supporters have roughly a year to secure funding before it’s too late. But the city believes the time frame is closer to two weeks.
The administration plans to move forward with the next set of contracts on the project, and turning back to build a second station after these contracts are issued, would result in tens of millions of wasted dollars, an official said. “We’re open to talking about what happens if someone finds additional funding, but we’re certainly not going to hold up the project hoping that happens,” said Andrew Brent, a spokesman for the mayor. “A 10th Avenue station would be nice, but the MTA and state budget problems are well-known, and the city is in no position to step in to pay for that, too.”
If federal funds can be secured, Mr. Spinola said, officials in the Bloomberg administration told him there’s a “strong desire to find another $250 million” in city funds.
Somehow, someway, the $250 million should materialize. In the grand scheme of development in New York City, that’s not a significant amount of money, and both the MTA and the city are making an expensive and nearly uncorrectable mistake by not building this station at 41st St. and 10th Ave. Hopefully, smarter heads will prevail.
I also want to note that REBNY has dropped the ball on this one. The city killed the station in August of 2008, and the powerful real estate board sat on its hands for nearly 18 months. Now, time is of the essence, and it’s unclear if the money will come through. Had the lobbying begun when the station was shelved, the funding would have been easier to secure and could have been in place already.
A Related deal — but no payment — nears
Meanwhile, as REBNY races against the clock, Related and the MTA seem ready to announce a deal for the Hudson Yards development rights. The new deal seems to have a catch though. Michael Grynbaum reports:
Under a deal unveiled Monday, Related would commit to the project with a $21.7 million down payment. But the company would not have to close on the project — and therefore start paying the 99-year lease — until after the city’s real estate market improves…
Under the plan, Related would commit to a 99-year lease on the 26-acre railyards for $1 billion, the original price. But three specific measures of the real estate market, including average prices for Manhattan co-op and condo sales, must be met before the company would be forced to close on its contract; in the earlier plan, Related would have had to close within 150 days of signing…
After signing the contract, Related will still have to post another $21.7 million in the following 12 months. But the new plan allows the developer to post a promissory note in lieu of cash.
The MTA praised the restructured deal because it maintains the price tag negotiated during better times. Yet, I still fear that Related isn’t actually going to build much for a while. The area will benefit from the station at 34th St. and 11th Ave. eventually, and the city should be encouraged to build out transit to underserved areas. But for now, this is still a very expensive project at a time when funds are tight, and the fate of the station that could have an immediate impact on the surrounding area is very much in doubt. Still, misguided subway expansion is better than none at all, and one day, the MTA will get its $1 billion.