NEW YORK CITY — Related Cos. and the Metropolitan Transit Authority (MTA) have reached an agreement to delay the closing for New York City’s Hudson Yards mixed-use project for up to an additional year. The original deadline for the two parties to come to terms for the project was January 31. The agreement provides the MTA with a non-refundable, $8.6 million payment in exchange for the extension, of which up to half may be used to offset expenses incurred by the MTA, the city of New York and the developer regarding, principally, the continuation of the zoning and ULURP process. In a statement, Related cites the economic downturn and the collapse of the traditional commercial lending market as reasons the extension was needed.
“Today’s agreement acknowledges current economic realities without derailing our partnership on this important site for New York’s future. The development team made their commitment to the project clear and this new understanding keeps us on the path to obtain the funding critically needed for the MTA’s current capital plan,” said Elliot Sander, executive director and CEO of the MTA, in a prepared statement.
Hudson Yards will be located on 26 acres above the current site of the John D. Caemmerer Rail Yard, located north of 30th Street and west of 10th Street in Midtown Manhattan. Plans released last fall for the project included approximately 5,000 housing units, 5 million square feet of commercial space, 1 million square feet of retail and hotel space, a cultural facility, a school and a 9-acre park. The platform that would need to be built above the train station, which would remain open during and after construction, was estimated to cost $1 billion on its own, with additional costs being incurred from the development of buildings and other spaces. The project is being developed by a joint venture between Related and Goldman Sachs, which is acting as financial partner.
“The development of Hudson Yards is critical to the future of New York,” said Stephen Ross, chairman and CEO of Related Cos., in a statement. “Today’s agreement creates the flexibility needed in light of current market conditions, while ensuring that we can continue to collectively move forward with the necessary planning approvals and pre-construction logistics. When the markets rebound and with zoning in place, New York City will be poised to build a vibrant new mixed-use community at the rail yards.”