search

The Real Deal Logo

Trending

“Multifamily is in the crosshairs”: Execs talk distress, opportunities at Milken conference“Multifamily is in the crosshairs”: Execs talk distress, opportunities at Milken conferenceWill developers try to game 485x to avoid wage, affordability rules?Will developers try to game 485x to avoid wage, affordability rules?“It is a reckoning”: NYC luxury brokers on staying at the top“It is a reckoning”: NYC luxury brokers on staying at the topMetLife looks to offload mostly vacant West Loop office building MetLife looks to offload mostly vacant West Loop office building 
New York

Hudson Yards deal declared dead

The MTA has declared a $1 billion deal with Tishman Speyer to develop Hudson Yards dead, despite a last-ditch effort today to revive it.

“The MTA met today with Tishman Speyer. Despite the best efforts of both sides, a final agreement could not be reached,” the agency said in a statement. “The MTA has now re-entered discussions with other interested developers and remains committed to timely development of these unique and valuable parcels of land on Manhattan’s Far West Side.”  

Tishman Speyer, which requested a final meeting with the agency yesterday, said in a statement attributed to Rob Speyer, president, that it “negotiated in good faith with the MTA for the last several weeks regarding Hudson Yards and could not come to a final agreement that was satisfactory to both of us. This morning we informed the MTA that we are withdrawing from the process immediately so it can proceed in another direction.

“We appreciate the MTA’s commitment to develop Hudson Yards into a great place for New York and wish it the best as it pursues other alternatives. We want to express our gratitude to Mayor Bloomberg for his extraordinary efforts and leadership through this negotiation to facilitate a deal.”

The Durst Organization and Vornado Realty Trust, whose joint bid finished second to Tishman’s, said today that they remain interested in pursuing the massive rail yards.

Jordan Barowitz, a Durst spokesman, said, “Hudson Yards is an interesting and exciting project for New York City, and we’d be interested in resuming discussions on the project’s development. The MTA has called us. They called us this morning.”

Sign Up for the undefined Newsletter

Extell Development, another bidder, has also expressed interest in bidding again for the project.

Mayor Michael Bloomberg, in a statement, said, “I am disappointed a deal could not be made with Tishman Speyer to develop the Hudson Yards. This site represents one of New York City’s best opportunities, and we will work with the MTA to move forward with another developer and ensure the potential of the area is realized.”

Jerry Speyer, Tishman’s chairman and CEO, and his son Rob flew from Milan to London to meet with Bloomberg on Friday.

Last Thursday the MTA’s chief financial officer, Gary Dellaverson, said the negotiations broke off after Tishman insisted on changing the terms of their March 26 agreement. The change Tishman requested would have slowed payments in annual rent and fees to the cash-strapped MTA for the 26-acre site, the Times reported last week.

The city tried to allay concerns about funding for the extension of the No. 7 to Hudson Yards by assuring Tishman that it would pay for any cost overruns, Crain’s reported. MTA spokesman Jeremy Soffin told The Real Deal last week that the proposed deal included penalizing the MTA for any delays to compensate Tishman if the 7 extension didn’t happen on schedule. 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.”

The deal’s collapse will likely lead to the MTA getting less money for the property, which stretches across 11th Avenue between 30th and 33rd Streets.