Hudson Yards is 26 acres of riverside Manhattan property that for years has been the last, best piece of undeveloped property in the city. And after Tishman Speyer’s $1 billion bid to develop the massive site collapsed yesterday, it could remain undeveloped as long as questions about mass transit go unanswered.
It’s still unclear whether concerns over a planned extension of the 7 line helped derail the deal. But uncertainty over the extension, which would take the 7 line from Times Square to Eleventh Avenue, ominously clouds the site, experts say.
Hudson Yards is hard to reach from Midtown (and hard to build, with a $2 billion platform needed over the rails). And without a link to Midtown, it’s hard to picture big companies or residents flocking to the area.
The city has issued $2.1 billion in bonds to pay for the 7 extension. But neither the city nor the MTA had committed to fund cost overruns, though MTA executive director Elliot Sander had suggested in recent months that it had worked out an informal understanding with the city.
Without clarity on whether new bonds or MTA dollars would fund any cost overruns, developers have reason to worry about getting stuck with buildings underway and the 7 extension at a standstill.
To compensate Tishman if the 7 extension didn’t happen on schedule, MTA spokesman Jeremy Soffin told The Real Deal today that the proposed deal included penalizing the MTA for any delays. He said that under the structure the MTA proposed, Tishman would get “rent holidays” — periods during which it would not have to make agreed-upon payments to the MTA, which would still own the land — “depending on the length of delay.”
Assemblyman Richard Brodsky, a critic of the redevelopment plan, told The Times that the 7 train was one reason the deal might have fallen apart, which Soffin denied.
“This was not the cause of the impasse,” Soffin said.
As crucial as extending the 7 line is, eventually developers will have no choice but to develop the area, said Andy Gerringer, who heads new development for Prudential Douglas Elliman.
“In the foreseeable future, the viability of the far West Side hinges on the 7 line,” he said. “As Manhattan runs out of sites, developers will have to go there, with the 7 line or not. You just may not have the value or appeal to commercial guys.”