From left: renderings of 250 West 55th Street, Manhattan West and 51 Astor Place

The city’s low office vacancy rates and slowly rising rents are overshadowing a disturbing office leasing trend, according to the New York Post. Ground-up office projects have been unable to secure major tenants, which in turn has stifled development.

Yesterday’s news that Silverstein Properties might cap off 3 World Trade Center at seven stories because of its inability to land a tenant, is just the most recent example. [more]

Determined to cut costs at its $4 billion Hudson Yards project, the Related Companies has reached outside the typical pot of New York City contractors and inked a California company. Crain’s said the impact of the unusual selection could reverberate throughout the city’s local construction industry.

Related chose Tutor Perini Corp. for the project because, unlike its New York counterparts, the firm owns subcontractors that can complete all facets of the construction project. [more]

The city has hidden more than $10 million in infrastructure costs for the Hudson Yards development project in the budgets of other agencies, the New York Daily News reported.

The mammoth project on the Far West Side will cost the city far more than projected, the News said. Between cost overruns for the extension of the 7 line to 11th Avenue — whose cost has ballooned by $3 million in the last few months — and the cost of interest on the bonds that are being used to finance the Hudson Yards project, the city will be on the hook for more than $500 million, the News said. [more]

Friends of the High Line, the non-profit group that oversees development of the West Side elevated park, has decided to open the final phase up to the public for input on what should grow on the tracks surrounding the Related Companies’ Hudson Yards development in the future, the New York Observer reported.

Until recently, it had not been clear whether the final section of elevated train track would be preserved for the High Line as the city worked to redevelop the site, but the Bloomberg administration and Related have both thrown their weight behind the project.

Friends of the High Line has issued a Request for Proposals on YouTube, inviting interested parties to a meeting tonight to discuss the last phase of the park (see video above). [NYO] [more]

Mayor Michael Bloomberg’s failed 2012 Olympic bid paved the way for the development of Manhattan’s Far West Side, which has given birth to 15 residential towers and 12 hotels since 2005, when the International Olympic Committee selected London to host the games.

According to the New York Times, the city rezoned and adjusted land use laws for the area to facilitate development for the Olympics and began planning the $2 billion extension of the 7 subway line to 34th Street and 11th Avenue. Though the Olympics didn’t follow, development has. In addition to the Related Companies’ Hudson Yards site, Avalon Bay is planning a 30-story rental development at 11th Avenue and 29th Street, and the Gotham Organization broke ground on a $520 million residential complex 15 blocks to the north. New parks and a boulevard between 10th and 11th avenues are also on the docket. [more]

The Related Companies reimagined the design of the first phase of its Hudson Yards project this past summer, the Wall Street Journal reported, after Chairman Stephen Ross became disenchanted with the original renderings.

“I could tell that Stephen wasn’t in love with it,” Jay Cross, who oversees the West Side project for Related, told the Journal. “He felt he wanted the buildings to be more dramatic. And we found that the marketplace was looking for bigger buildings.”

The initial design, by William Pedersen of Kohn Pedersen Fox Associates architecture firm, featured three strictly rectangular steel office towers, the shortest in the middle. [more]

From left: Culture Shed model and a rendering of the Whitney Museum in the Meatpacking District

If the city has its way, New Yorkers will be able to walk along the High Line from the Whitney Museum, take a few stops at Chelsea galleries, and continue to a Hudson Yards arts center called the Culture Shed.

The Wall Street Journal reported that the arts center, which Mayor Michael Bloomberg said this week would host Fashion Week, would be home to theater performances, traveling exhibitions and community events. The city hopes to have a clear plan for the center by next summer, including funding and a non-profit organization to lead it. [more]

From left: Time Warner Center and a rendering of Hudson Yards

Now that Coach is on the books, Hudson Yards’ next office tenant could be Time Warner, according to the New York Post. The namesake of Related Companies’ Columbus Circle complex has been looking to downsize from the 864,000-square-foot space it owns at the Time Warner Center, and other city office space, in an effort to cut costs.

Related is considering offering the media giant an opportunity to swap its space for a smaller home in Hudson Yards. [more]

Related Companies CEO Stephen Ross and President Jeff Blau were on hand at the official announcement that Coach would occupy about 600,000 square feet at the first building the developer plans to construct in its Hudson Yards project on the West Side. Mayor Michael Bloomberg and City Council Speaker Christine Quinn, as well as executives from bag maker Coach, were present at the event at 30th Street and 11th Avenue this morning. CBRE brokers Mary Ann Tighe and Greg Tosko, represented Coach in the transaction. – Adam Pincus [more]

Canadian pension fund Ontario Municipal Employees Retirement System, or OMERS, is opening its first American office at 320 Park Avenue near 51st Street, the fund announced, in hopes of expanding its presence in private market investments in the U.S.

OMERS manages $53 billion in assets, including $10 billion in the United States. Canadians have been active of late in the New York market, and real estate watchers might recognize OMERS’ investment arm, Oxford Properties Group, which partnered with the Related Companies on the 12 million-square-foot development of Hudson Yards. – Adam Fusfeld [more]