The Real Deal New York

Moinian needs to reapply for Hudson Yards tax benefits

Developer missed deadline to secure full financing to construct 1.8M sf 3 Hudson Boulevard tower

May 12, 2016 02:50PM
By Rich Bockmann

From left: Joseph Moinian and 3 Hudson Boulevard

From left: Joseph Moinian and 3 Hudson Boulevard

The Moinian Group will have to reapply for some $65 million worth of tax benefits approved last year for its 1.8 million-square-foot office tower in the Hudson Yards neighborhood after failing to lock down an anchor tenant and full construction financing.

In February of 2015, the New York City Industrial Development Agency approved a property-tax exemption for Moinian’s 3 Hudson Boulevard at the corner of 11th Avenue and 34th Street designed to encourage commercial development in the Hudson Yards area.

The developer agreed to make certain payments in lieu of property taxes, the net benefit of which was calculated to be $64.8 million in property taxes. (The IDA estimated the project’s development and operations would result in an economic benefit of $691 million in city taxes and other revenues.)

But under the terms of the agreement, Moinian had one year from the Feb. 10 approval date to secure full construction financing for the building. And while the firm is already working on the building’s foundation, it is still waiting to sign an anchor tenant and lock down construction financing for the full tower.

A spokesperson for Moinian wrote in an email that the company “will need to go back to the IDA for a new filing once they have the financing package ready.” A source told The Real Deal that reapplying could affect the value of the benefits Moinian receives.

Avison Young’s Arthur Mirante, who is leading the leasing effort for the proposed 66-story tower, told Bloomberg News earlier this week that he’s in talks with potential tenants for the building: one that would take 1 million square feet and two that would take more than 500,000 square feet each.

The project does face stiff competition from developers like the Related Companies, Brookfield Property Partners and Tishman Speyer, all of which are developing competing towers nearby.

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