The Metropolitan Transportation Authority agreed today to let the Related Companies and Goldman Sachs extend their partnership's period of "conditional designation" as developer of the MTA's East and West Side Rail Yards for an additional year.
The agreement provides the MTA with a non-refundable payment of $8.6 million in exchange for the extension (up to half of which may be used to offset expenses incurred by MTA, the City and the developer regarding, principally, the continuation of the zoning and ULURP process).
Due to the fiscal crisis and tightenting of the credit markets, the parties did not reach an agreement by January 31, the end of the existing designation period.
A statement released by the MTA said that it "and Related/Goldman remain fully committed both to the Eastern Rail Yard and Western Rail Yard projects and the business terms of the deal."
Elliot G. Sander, Executive Director and CEO of the MTA said, "Today's agreement acknowledges current economic realities without derailing our partnership on this important site for New York's future. The development team made their commitment to the project clear and this new understanding keeps us on the path to obtain the funding critically needed for the MTA's current capital plan."
Stephen M. Ross, Chairman and CEO of Related Companies said, "The development of Hudson Yards is critical to the future of New York. Today's agreement creates the flexibility needed in light of current market conditions, while ensuring that we can continue to collectively move forward with the necessary planning approvals and pre-construction logistics. When the markets rebound and with zoning in place, New York City will be poised to build a vibrant new mixed-use community at the rail yards."
The MTA held a competition for the development of the 26-acre yards last year and Tishman Speyer Properties was named the winner, but subsequently withdrew and the MTA last May named the Related team as the designated developer.
Under the terms of the previously announced deal, the Related team would pay the MTA $1 billion for the development rights over a period of 99 years and spend about $2 billion building a platform over the yard on which new development could be erected. It was supposed to give the MTA a $43.5 million down-payment by the end of last month, but that deadline was mutually postponed.
Last month, Mr. Ross closed on his $1.1 billion purchase of the Miami Dolphins football team.
An article by Charles V. Bagli's in today's edition of The New York Times reported that "Related has told city and state officials that it has spent about $30 million on architects, engineers and fees so far" on its plans to build 5.5 million square feet of commercial space and 5,500 residential units on the site that is between 30th and 33rd Streets on both sides of 11th Avenue.
The agreement provides the MTA with a non-refundable payment of $8.6 million in exchange for the extension (up to half of which may be used to offset expenses incurred by MTA, the City and the developer regarding, principally, the continuation of the zoning and ULURP process).
Due to the fiscal crisis and tightenting of the credit markets, the parties did not reach an agreement by January 31, the end of the existing designation period.
A statement released by the MTA said that it "and Related/Goldman remain fully committed both to the Eastern Rail Yard and Western Rail Yard projects and the business terms of the deal."
Elliot G. Sander, Executive Director and CEO of the MTA said, "Today's agreement acknowledges current economic realities without derailing our partnership on this important site for New York's future. The development team made their commitment to the project clear and this new understanding keeps us on the path to obtain the funding critically needed for the MTA's current capital plan."
Stephen M. Ross, Chairman and CEO of Related Companies said, "The development of Hudson Yards is critical to the future of New York. Today's agreement creates the flexibility needed in light of current market conditions, while ensuring that we can continue to collectively move forward with the necessary planning approvals and pre-construction logistics. When the markets rebound and with zoning in place, New York City will be poised to build a vibrant new mixed-use community at the rail yards."
The MTA held a competition for the development of the 26-acre yards last year and Tishman Speyer Properties was named the winner, but subsequently withdrew and the MTA last May named the Related team as the designated developer.
Under the terms of the previously announced deal, the Related team would pay the MTA $1 billion for the development rights over a period of 99 years and spend about $2 billion building a platform over the yard on which new development could be erected. It was supposed to give the MTA a $43.5 million down-payment by the end of last month, but that deadline was mutually postponed.
Last month, Mr. Ross closed on his $1.1 billion purchase of the Miami Dolphins football team.
An article by Charles V. Bagli's in today's edition of The New York Times reported that "Related has told city and state officials that it has spent about $30 million on architects, engineers and fees so far" on its plans to build 5.5 million square feet of commercial space and 5,500 residential units on the site that is between 30th and 33rd Streets on both sides of 11th Avenue.
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.
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
