Hudson Yards groundbreaking set for November, but…By
It’s been a while since our last Hudson Yards update. Two and a half years ago, amidst a slow economy, Related Companies hammered out a deal for the Hudson Yards space with some string attached, and in May of 2010, they and the MTA signed the contract. With closing dependent upon some various economic benchmarks, it seemed that construction at the site would be slow to move forward.
Now, amidst vague rumors that Related wants to restructure its deal with the MTA, the company is planning a November ground-breaking for the project. Still, as Eliot Brown reports in The Wall Street Journal, the portions over the railyards are a long way off:
New York developer Related Cos. has assembled a new group of financial backers and said it plans to break ground in November on the initial 46-story office tower of the 26-acre Hudson Yards project, a sign that the dormant market for U.S. commercial development is showing early signs of life. “This will be the Rockefeller Center—the heart of the city—for the 21st century,” said Stephen Ross, Related’s chairman. “We are going to build a truly world-class site.”
Commercial construction has been slowed by a lack of financing but that market gradually is returning. McGraw-Hill Construction, which analyzes construction data, estimates that building will commence on 272 million square feet of office, retail, hotel and warehouse space in the U.S. this year, more than in any year since 2008. Still, new construction remains slow by historic standards and tends to be limited to a few major cities…Related is trying to finalize deals with its partners by year-end. The talks are far enough advanced, according to Related and others involved in the project, that the company feels comfortable starting on the first building, which it hopes to finish by 2015.
For future phases, the costs grow and the schedule may again be thrown off by the economy. Related needs to build an $800 million platform over half the rail yards for the second phase, and another platform for the third phase. Related would start the second phase if it secures a large tenant.
Meanwhile, a small item in today’s Post drew a raised eyebrow. Steve Cuozzo reported that Related has asked the MTA to revise its deal. Cuozzo’s report is short on details, but apparently, Joe Lhota had this to say: “Related has approached the MTA to amend the existing deal. I am willing to entertain it so long as the MTA’s interests are fully protected.” Related denied the report, but where’s there smoke, there’s often fire.