A Big Project Above NYC's Tracks

A vast track of space on Manhattan’s far west side got one step closer today to becoming a sprawling, high-tech, city-within-a-city. The area, known as Hudson Yards, covers a 26-acre site between 10^th and 12^th avenue and 30^th and 33^rd streets.

What’s there now are train parking lots for Metropolitan Transit Authority and Long Island Railroad trains. Those would stay, but they would be covered to make way for new buildings and public space to be built on top. Today, the MTA’s full board voted to approve a renegotiated development deal with commercial real estate conglomerate Related Companies. Plans call for $15 billion in hotel, apartment, office, and retrial projects to rise.

Developers have had their eye on the space for years and Mayor Michael Bloomberg saw it as crucial piece to the city’s failed bid to attract the 2012 Summer Olympics. The current vision for Hudson Yards came about in October 2008, when the MTA accepted a proposal from a joint venture between Related and Goldman Sachs.

On terms set before Wall Street collapsed and the nation was thrown into the Great Recession, Related/Goldman agreed to pay $1 billion. But in January of this year, Goldman Sachs disclosed it would no longer play an active role in the project. Related, however, showed no sign of backing out, as long as a few sticking points got ironed out.

The MTA agreed to take $21.7 million as a down payment, while Related agreed to close on the contract after conditions improve in the Manhattan rental market. New stipulations, first reported in the New York Observer, include provisions that dictate that Midtown office vacancy needs to be lower than 11 percent and that co-op and condo prices reach an average of $1,200 a square foot.

“We remain optimistic about the future of New York and fully expect the construction of the Hudson Yards will be an integral part of the city’s resurgence,” said Jay Cross, president of Related Hudson Yards.

To bolster the redevelopment area, the MTA would extended a subway line (the east-west running 7) to 34^th Street and 11^th Avenue at a cost of $2.1 billion.

At the Regional Planning Association, senior planner Juliete Michaelson said it’s important that the development of the far west side of Manhattan remain a priority, even if it takes a little longer than expected.

“Renegotiations happen, but, it’s also important that the MTA be made whole again,” she said.

Reportedly, the MTA had been were counting on the money from the Related purchase towards West Side development to help fund its current capital plan. The beleaguered transit agency is $378 million in the hole for 2010 despite service cuts and layoffs.