The Related Cos. and Vornado Realty Trust are reportedly "straining to make the terms of their five-year-old deal" to expand Pennsylvania Station in to the neighboring Farley Post Office building, according to an article in today's edition of The Wall Street Journal by Eliot Brown.
The two giant real estate firms "originally agreed in 2006 to pay the state more than $310 million for rights to develop retail in the rear of the building, among other benefits, but lately they've told government officials they believe the agreement struck earlier won't work with those uses alone," according to people familiar with the matter, the article said.
The article said that in recent months the developers have tried to the get the City University of New York interested in a land swap plan with the TriBeCa-based Borough of Manhattan Community College, the people said. "The developers would have built a new campus in the back of the post office, and in turn, the developers would have been able to build apartments with unobstructed Hudson River views on the school's valuable land of the five-block campus along the West Side Highway. But those talks appear to have fizzled recently, as CUNY officials showed little interest, people familiar with the discussion said," the article continued.
"The developers have also shown the site to Nordstrom Inc., and Target Corp.," but "neither retailer has committed to the building," the article said.
"The cracks that are beginning to show in the deal raise new questions about the future of the ambitious plan to create a new home for Amtrak in the eastern portion of the Corinthian column-lined post office....The new station would be named after Sen. Daniel Patrick Moynihan who championed it until his death in 2003. The project also has been supported by three mayors and give successive governors, but none have been able to gain traction. It received its first tangible boost last year, when the state moved to begin construction on a first infrastructure-heavy phase of the project that involves an expansion of an underground concourse," the article said.
The commercial deal with Related and Vornado is an important part of the project. "While they agreed on the outlines of a plan five years ago, it never closed. The agreement in 2006 got sidetracked when the developers pushed a $14 billion plan to move Madison Square Garden to the rear of the Farley building and expand and remake the existing Penn Station. That plan, which would have unlocked about 5 million square feet of development rights tied to a redo of the station, fell apart in 2008 when the Garden decided to stay in place," the article said.
The two giant real estate firms "originally agreed in 2006 to pay the state more than $310 million for rights to develop retail in the rear of the building, among other benefits, but lately they've told government officials they believe the agreement struck earlier won't work with those uses alone," according to people familiar with the matter, the article said.
The article said that in recent months the developers have tried to the get the City University of New York interested in a land swap plan with the TriBeCa-based Borough of Manhattan Community College, the people said. "The developers would have built a new campus in the back of the post office, and in turn, the developers would have been able to build apartments with unobstructed Hudson River views on the school's valuable land of the five-block campus along the West Side Highway. But those talks appear to have fizzled recently, as CUNY officials showed little interest, people familiar with the discussion said," the article continued.
"The developers have also shown the site to Nordstrom Inc., and Target Corp.," but "neither retailer has committed to the building," the article said.
"The cracks that are beginning to show in the deal raise new questions about the future of the ambitious plan to create a new home for Amtrak in the eastern portion of the Corinthian column-lined post office....The new station would be named after Sen. Daniel Patrick Moynihan who championed it until his death in 2003. The project also has been supported by three mayors and give successive governors, but none have been able to gain traction. It received its first tangible boost last year, when the state moved to begin construction on a first infrastructure-heavy phase of the project that involves an expansion of an underground concourse," the article said.
The commercial deal with Related and Vornado is an important part of the project. "While they agreed on the outlines of a plan five years ago, it never closed. The agreement in 2006 got sidetracked when the developers pushed a $14 billion plan to move Madison Square Garden to the rear of the Farley building and expand and remake the existing Penn Station. That plan, which would have unlocked about 5 million square feet of development rights tied to a redo of the station, fell apart in 2008 when the Garden decided to stay in place," the article said.
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.
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