The 7 line brings development to Hudson YardsBy
As Mayor Bloomberg’s time in office nears an end, his tenure is racing against the clock for the 7 line extension. For better or worse, this project, less one key station, is his baby, and earlier this year, he vowed to push trains through the tunnel before his term ends if it means an opportunity for a ribbon-cutting. It may not be ready for revenue service until mid-June of 2014, but some sort of ceremony will take place before the end of the year just to Bloomberg can pat himself on the back for delivering the dollars.
At a certain point, the conversation surrounding the 7 line changed. I used to call it the Line To Nowhere, and while it’s sort of the line to nowhere, in a few years, it’ll be the Line That Turned Nowhere Into Somewhere. It shouldn’t surprise us because most of New York City developed on the backs of the various subway lines, but development of Manhattan’s last frontier is following the subway and at a very rapid pace.
In a big piece in this week’s Crain’s New York, Dan Geiger explores that development. The dollars are starting to roll in, and soon the buildings will start to rise. Geiger reports:
With the long-talked-about transit link almost ready, the area’s real estate interests are betting vast sums that more tenants will follow in the footsteps of the major companies that have already booked huge blocks of space, including Coach, Time Warner and L’Oréal. Indeed, as Crain’s first reported last week, Citigroup is considering relocating its global corporate headquarters from Park Avenue to Hudson Yards.
In response to those bullish signals from tenants, developers are snapping up major development sites at a prodigious pace, making the area the most active in the city this year for such deals, according to real estate experts. The 7 train’s looming arrival has only hastened that frenzy. Bob Knakal, chairman of sales brokerage Massey Knakal, said small fortunes are being created, as the activity has pushed up land prices by double or more.
“A lot of the development sites that only a short time ago were considered speculative are now tangible,” Mr. Knakal said. “You’ll see a lot more happen in the neighborhood coming up. There are at least four very significant sites that I know of that will be in play within the next month or two right smack in the Hudson Yards.”
The Related Cos., already in the process of developing the 26-acre, $15 billion Hudson Yards complex, has been the most voracious buyer of adjacent sites in a doubling down of its holdings in the area. The company has entered into a contract to acquire a parcel between West 35th and 36th streets—for $75 million or more—that will border a new “Hudson Boulevard” being constructed by the city to run between 10th and 11th avenues.
The actual arrival of the train to the area was a key moment psychologically for developers. As Geiger notes, those investing in the area believe that 70 percent of residents will use the 7 train on a daily basis, and the level of interest has increased as it’s become clear that the subway is a reality and not just a promise. Meanwhile, Related, the company with the largest stake in the area, plans to start work on the platform that will cover the Hudson Yards early next year.
“If there were no No. 7 subway, I’m not sure we would be starting the platform then,” Jay Cross, the head of the Hudson Yards project for Related, said to Crain’s. “But knowing that it is going to be there means we have to get going and that we will also have enough tenant interest for the space there.”
Is there a lesson here — besides, that is, the one Dan Doctoroff was espousing a few weeks ago when he praised the 7 line at the expense of the Second Ave. Subway? We see that subway construction can still feed development and can still dictate where people want to live, work and build in New York City. The same doesn’t happen around Select Bus Service lines, and our politicians would be wise to pay attention the Hudson Yards. There are other areas of the city that could use subway lines and the subway lines can lead to more density and a better use of scarce space.