The largest rezoning in recent city history has this town’s real estate players limbering up for a race to some of the last developable plots on Manhattan’s far West Side.
But no one wants to get there too soon, before the future of the property they’ve been eyeballing has been determined. The $3 billion rezoning of the area known as Hudson Yards was approved by the City Council in a vote on Jan. 19, but that’s not the end of the story.
Although the fate of a controversial proposal to build a $1.4 billion football stadium remains uncertain and will be considered separately, rezoning means that 59 blocks of factories, brick warehouses and parking lots between 28th and 43rd streets from the Hudson River east to Seventh and Eighth avenues get redesignated a high-rise business district.
Included in that rezoning are, among other delectables, 24 million square feet of office space and 13,600 residential units. There is also the expansion of the No. 7 subway line, part of the rezoning plan, and the already approved expansion of the Javits Convention Center, where construction could begin this year.
Developers and brokers have been tickled by the possibility for new projects in the area. Much of the recent focus has been on condos, and existing plans for office towers are being modified to include apartments because of the hot residential market.
Vornado Realty Trust, which generally remains close-mouthed about development plans, broke its silence to say it intends to expand west to Hudson Yards from the Penn Station area, where it’s one of the biggest landowners.
With an uneven office market, developers may look past commercial zoning and take a more creative approach to the area’s facelift.
Eric Anton, senior managing partner at Eastern Consolidated Properties, said developers are looking at buying combinations of small plots andécorner lots for condominiums.
“Everything on the drawing boards right now is condominium, because the market is so strong,” Anton said.
He also said big hotel projects could take a back seat to smaller hotel undertakings such as a Motel 6 or a Howard Johnsons.
Asher Alcobi, founder and president of brokerage Peter Ashe, is more bullish on hotels, however.
“The hotel market at the end of 2004 was exceeding the numbers of 2000, which was the best year for the hotel industry,” he said. “My prediction is that we will see something we haven’t seen for a long time in New York, which is construction of hotels. And I predict it will happen there.”
Alex Twining, president of Twining Properties, recently joined forces with The Related Companies and MacFarlane Partners to develop a tower with retail, rental and condos at 440 West 42nd Street.
Twining said he doesn’t believe that full-on development of office space is the way to go.
“If there’s no market to fill the buildings, then you’re taking on risk to go buy a piece of land that you may be sitting on a long, long time,” he said.
Twining said he believes residential development, generally condominiums, but perhaps a blend of office and residential, will move south from 42nd Street and outward from Penn Station, where there are existing critical masses of residential and office space.
Others see the expansion of residential Chelsea northward into the rezoned Hudson Yards, which currently has around 20,000 residents.
“This neighborhood is Chelsea of five or six years ago,” said Alcobi. “Five or six years ago in Chelsea, you could have bought for no money. Today, it’s one of the most desirable areas and most expensive in the city.”
The rezoning includes plans for 3,400 affordable housing units out of the total 13,600, which has community activists pleased.
“The community is really excited that the final rezoning plan apparently involves a really significant plan for affordable housing,” said John Raskin, an organizer for the Hell’s Kitchen/Hudson Yards Alliance.
The massive 75,000-seat Jets stadium remains the big piece of Hudson Yard’s future still up in the air. But Twining believes the sports complex and convention center could do more harm than good.
“One of the missed opportunities is that you also have the river there,” he said. “Yet the premise of the city’s plan is to extend a giant wall or convention corridor so all those blocks that could be incredibly valuable prime residential property overlooking the river will not happen.”
The Real Deal