The Real Deal New York

Vornado, Related land $271M Deutsche loan for Moynihan Train Hall

Acquisition loan is backed by the building’s ground lease
By Konrad Putzier | July 03, 2017 04:36PM

From left: Rendering of the Moynihan train hall, Steve Roth and Deutsche’s Matt Borstein

Vornado Realty Trust and the Related Companies landed a $271 million loan package from Deutsche Bank to fund the first steps of the Moynihan Train Hall project, according to property records filed with the city Monday.

The financing, which consists of a $202.3 million acquisition loan, a $29 million building loan and a $39.7 million project loan, is secured by the property’s ground lease. Vornado and Related TRData LogoTINY leased the James E. Farley post office building from the Empire State Development Corporation and last month finalized a deal to convert the building into a new train hall in partnership with Skanska.

Under the deal, the developers will invest $630 million into the $1.6 billion project; the state will contribute $550 million; and MTA, Amtrak and other federal sources will chip in $420 million.

The federal funding is noteworthy because both Vornado and Deutsche have direct business ties to President Trump. Vornado owns the office towers 1290 Sixth Avenue in Midtown and 555 California Street in San Francisco in partnership with Trump, while Deutsche Bank lent him around $300 million in recent years for various development projects.

Meanwhile the fate of around 1.5 million square feet in air rights tied to the building remains unclear. “There will be private dollars. The air rights are going to bring in a whole lot of money,” Senate Minority Leader Chuck Schumer said recently.

The project will include 700,000 square feet of office and retail space and is expected to be completed in 2022.