With property values plummeting, interest rates rising, and daily rumors of yet more Fed bailouts of venerable lending institutions like Fannie Mae and Freddie Mac, the real estate development business is not a very good place to be these days.

Just ask Harry Macklowe, the New York City mogul and former owner of the G.M. building, whose net worth was obliterated earlier this year when he was unable to refinance a $5.8 billion loan.

But there’s at least one man who’s undaunted—Related Companies’ Stephen Ross, who recently raised outside financing of $1.4 billion from investors such as Goldman Sachs and the Abu Dhabi sovereign-wealth fund to finance several huge city developments, including one of the largest projects imaginable—a multibillion dollar transformation of 26 acres in Midtown Manhattan.

“Too many people believe that when things are bad, they don’t know how they can get good and when they’re good, they don’t know how they can get bad,” says the 68-year-old Ross, who founded Related in 1972 with an initial focus on developing affordable housing. “When you’re a real estate developer, you need to have a little more vision, and see where the momentum is going.”  

It’s a bold move that could end up with Ross in Macklowe’s situation, but Ross has a precedent in mind. His uncle, well-known industrialist Max Fisher, cut a deal with Marathon Oil during the Great Depression to guarantee his supply, allowing his gas stations to prosper when supplies ran short and competitors had no gas to sell.

“We’re getting ready to make sure we’re well-positioned for the next growth period,” says Ross. “I’d rather have [the economy] bad today so that when we [finish building], it’s great.” All told, Ross plans to invest $9 billion in the next few years, including a $3 billion mixed-use development designed by Frank Gehry in downtown Los Angeles, a $3 billion ski resort in Snowmass, Colorado, and a 144-acre mixed-use development in Phoenix.

In some ways, the soft-spoken Ross is the anti-Trump. He has no reality shows, doesn’t date supermodels, and has only been married twice. And whereas Trump focuses on luxury housing, Ross tends to look at mixed-use developments that ideally provide shopping and resources that the neighborhoods lack. But Ross’s bets are as huge and as audacious as anything The Donald could conceive.

When Ross paid $348 million to develop the Time Warner Center in 1998, the city was still working its way out of a recession, and his plans for turning the area into a high-end retail space were seen as ludicrous by some (another developer had proposed making Sears the anchor tenant). Today the development is considered a huge success and the average price per square foot in the area has almost doubled from the time construction began in 2000.

Now Ross hopes to do much the same thing with the sprawling, sparsely populated West Side Railyards on the Far West Side of Manhattan, turning it into a mixed-use neighborhood with retail shops, soaring office towers, and a mix of luxury and affordable housing. Originally considered the front-runner to win the development rights from the city’s Metropolitan Transportation Authority, which owns the Railyards, Related was forced to withdraw its proposal when News Corp., its anchor tenant, got cold feet the day before final bids were due in March. But when talks between the M.T.A. and Tishman Speyer fell through over a series of payment contingencies the company wanted in place in case the economy didn’t rebound, Ross jumped right back in.

“Once we had a second opportunity, we didn’t waste any time,” says Ross. “We assembled a board of directors meeting in about one minute and we made a decision in the next 30 seconds.” Their deal with the M.T.A. was completed just a week after Tishman pulled out. Having Goldman Sachs onboard as an investor went a long way toward reassuring the M.T.A. about the viability of the bid.

Ross calls the $1.04 billion price tag an “opportunistic price” given the fact that for all its challenges, the development is still located in midtown Manhattan, home to some of the priciest real estate on the planet (New York State assemblyman Richard Brodsky thinks the M.T.A. should have waited for better economic conditions to sell rights to the Railyards and claims the M.T.A. is “giving away this property”). Ross is hoping that the Railyards can eventually have as much impact as the Time Warner Center had on its surrounding area.

But the West Side Railyards project presents an even greater challenge, being an enormously expensive project that has stymied developers for years and one that’s dependent on a wide range of other players doing their part for it to become a success.

Beyond the $1 billion price tag, Related will have to spend at least $2 billion on infrastructure, primarily to build a platform over the working railyards to support construction above it. This will make it at least two years before Related will even be able to begin construction on its own buildings.

And attracting tenants to the area is dependent on the timely completion of the extension of the 7 subway line into the Far West Side, which began last December. Though Related’s investment in the site was contingent on the M.T.A.’s commitment to the extension, the project is already over budget, and the beleaguered state of the proposed Second Avenue subway line, which has been planned literally for decades, has not exactly inspired confidence in the M.T.A. to get the job done anywhere near on time.

Several other ongoing projects that surround the Railyards are also crucial to the development, and almost all have experienced significant problems despite being a priority by Mayor Mike Bloomberg. Proposed expansions to the nearby Jacob Javits convention center have been cancelled, and efforts to redevelop Penn Station, another project that Ross is working on with fellow mega-developer Steve Roth of Vornado Realty Trust, are currently stalled over financing.

Roth, who’s known Ross for years and has both competed and collaborated with him on a number of projects, says he’s confident that Ross can succeed but acknowledges the challenges he faces. “I hope he lives through it,” Roth laughs.

It won’t be easy. The lack of an anchor tenant for the project thus far adds uncertainty (among others, Related is wooing Condé Nast, the publisher of Portfolio.com, for the space), and all those other stars need to align for the development to take off.
 
Gary Dellaverson, the M.T.A.’s chief financial officer, says he’s pleased at the choice of Related to develop the site, but he’s realistic about the magnitude of the project. “Nobody candidly has lots of expertise in 26 acres of midtown development,” Dellaverson says.