New York City officials bet on the success of Hudson Yards. Taxpayers may soon benefit from that risk.
The Hudson Yards Infrastructure Corporation, a city subsidiary used to finance the district’s redevelopment, has transferred about $663 million to the city since 2017, Bloomberg reports. Those funds were generated by surplus property tax and other revenue streams.
The infrastructure corporation sold $2.7 billion in debt to finance an extension of the No. 7 subway line to access the district, as well as a park. It cost $360 million to subsidize the interest payments on the debt and $230 million to cover cost overruns and future planned spending, both of which could be covered by the transfer.
The city estimates Hudson Yards will generate a total of $27.1 billion from this fiscal year through 2047, Bloomberg reports, amid other promising indicators like an average office asking rent of $118.54 per square foot and an estimated decline this year of only 6 percent in property tax revenue backed by bonds, despite commercial real estate struggles amid the pandemic.
A spokesman for Mayor Bill de Blasio referred to the development as “a financial win for the city.”
Additionally, Fitch Ratings, S&P Global Ratings and Moody’s Investors Service all upgraded the corporation’s bonds ahead of a $452 million issue this week, which is largely backed by property tax revenue and will refinance 2011-issued bonds. Fitch raised its rating to A+, S&P to AA- (one step above A+) and Moody’s to Aa2 (one step above AA-).
The New School puts taxpayer spending on Hudson Yards at $2.2 billion so far, per Bloomberg. That includes revenue from tax breaks received by developers and spending towards a local public school and performing arts venue. Critics claim that money could’ve been directed towards other initiatives.
The area could bring more good news in the future, depending on the recovery of its local residential and hotel markets. Nearly 10,000 rental and condo units and 8,500 hotel rooms have already been built in the district, which includes Related Companies’ Hudson Yards and Brookfield’s Manhattan West.
[Bloomberg] — Holden Walter-Warner