The Real Deal New York

Hudson Yards to cost city another $368M: IBO

Overruns and delayed revenues have bumped total cost higher than expected

July 23, 2015 08:00AM

Rendering of Hudson Yards (credit: Kohn Pedersen Fox)

Rendering of Hudson Yards (credit: Kohn Pedersen Fox)

New York City will have to pay another $368 million by 2019 to cover the cost of building Hudson Yards, according to projections from the Independent Budget Office, bringing the total expense for the city to a whopping $947 million.

The city has been covering the costs by issuing $3 billion in bonds through the Hudson Yards Infrastructure Corporation, DNAinfo reported.

However, because revenue from residential and commercial tenants is taking longer to come in than expected, the city has been left on the hook with hundreds of millions more in debt than it was prepared for.

A potential shortfall in revenue was a concern as early as 2013 at the Related Companies-led $20 billion megadevelopment. A report titled “City’s Spending on Hudson Yards Project Has Exceeded Initial Estimates” stated that while the HYIC thought it would collect $283 million in taxes by 2012, it only collected $170 million.

The IBO predicts the city may have to contribute $66 million in 2018 and $97.8 million in 2019 to pay off the bondholders. It will also hand over $51 million in tax revenue from the project to HYIC.

The city is also covering cost overruns for the 7 train extension, which has now cost $2.4 billion total.

This week the Related Cos. said is considering selling a stake in its office tower 10 Hudson Yards, which is now almost fully leased. [DNAinfo] — Tess Hofmann