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Carter's View

The Metropolitan Transportation Authority issued a statement this afternoon that it had met with Tishman Speyer today and "despite the best efforts of both sides, a final agreement could not be reached" on its previously announced designation of the real estate concern as the developer of its West Side rail yards.

The MTA announced Thursday that it had reached an impasse with Tishman Speyer, which owns Rockefeller Center, the Chrysler Building and Stuyvesant Town among many other properties. Tishman Speyer had submitted the highest bid of five submitted for the development of office space, parks and apartments over the 26-acre site near the Hudson River between 31st and 33rd Streets.

On Friday, Jerry Speyer, the head of Tishman Speyer, flew to London to meet with Mayor Michael R. Bloomberg whose administration has long been campaigning to redevelop the West Midtown area. Mayor Bloomberg afterwards issued a statement that he was "optimistic" that negotiations could resume and Tishman Speyer met yesterday and today with the MTA.

The statement today from MTA spokesman Jeremy Soffin said that "The MTA has now re-entered discussions with other interested developers and remains committed to timely development of these unique and valuable parcels of land on Manhattan's Far West Side."

Rob Speyer, the president of Tishman Speyer, issued a statement today that said the company withdrew its bid this morning. "We have negotiated in good faith with the MTA for the last several weeks regarding Hudson Yards," he said, "and could not come to a final agreement that was satisfactory to both of us. This morning we informed the MTA that we are withdrawing from the process immediately so it can proceed in another direction."

"We appreciate the MTA's commitment to develop Hudson Yards into a great place for New York and wish it the best as it pursues other alternatives. We want to express our gratitude to Mayor Bloomberg for his extraordinary efforts and leadership through this negotiation to facilitate a deal," Mr. Speyer's statement continued.

The other ventures that had submitted bids were Extell Development, Brookfield Properties, a venture of the Durst Organization and Vornado Realty Trust, and the Related Companies.

All of the submitted bids called for the erection of a platform to permit the continued use of the yards except for the one submitted by Extell that called for a suspended level over the yards.

In the first round of bids submitted in October, the top bid of $1.049 billion was submitted by Related, followed by $1.015 billion submitted by Durst/Vornado, $908 million submitted by Brookfield, $819 million submitted by Tishman Speyer, and $598 million submitted by Extell.

A second round of bidding was requested in February. Brookfield Properties did not submit a bid but indicated it could be involved as a co-developer, and Related submitted a bid only for the western half of the yards but not the eastern half.

Extell submitted the highest bid in the second round: $1.15 billion. However, it did not agree to pay sales tax and that refusal led to its elimination in the bidding process. Related's second round bid was $943 million, Tishman Speyer's was $897 million and Durst/Vornado's was $842 million.

The MTA then asked for more bids from the two remaining ventures and Tishman Speyer offered $1.004 billion and Durst/Vornado $892 million. Over the last few days, Durst/Vornado upped its bid but it still fell short of Tishman Speyer's.

The Durst/Vornado plan included new headquarters for Cond? Nast Publications and a much higher number of apartments than the Tishman Speyer plan, which attracted little enthusiasm from architectural and community commentators.
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Architecture Critic Carter Horsley Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.