Hudson Yards Subdistricts
.New York Daily News, Wednesday, November 19, 2014, 4:53 AM
Dan Doctoroff, former Mayor Bloomberg’s chief economic aide, assured City Council that the taxes generated by Hudson Yards would easily repay the taxpayer investment.
Welcome to Hudson Yards, the 26 acres around the MTA’s West Side railyards that New York’s real estate moguls keep touting as this city’s next great commercial district.
…The city will have paid nearly $650 million in subsidies into Hudson Yards by the end of this fiscal year, according to a review by the city’s Independent Budget Office — and more will be needed in the future.
That’s not exactly how the project was sold when the City Council approved it in January 2005.
Back then, the Council permitted the Bloomberg administration to issue $3 billion in bonds through a new Hudson Yards Infrastructure Corp., mostly to finance an extension of the 7 subway line to 34th St. and Eleventh Ave.
The subway expansion was supposed to spur the building of a slew of office buildings and condos in the area. All that new development would then generate sufficient taxes and fees to easily repay the bonds and even fill the city’s coffers with additional revenue, Bloomberg’s chief economic aide, Dan Doctoroff assured the Council at the time.
…Bloomberg’s numbers crunchers predicted the city would pay as little $7 million in debt service subsidy, though they hedged that with a worst-case scenario as high as $205 million.
Well, revenue from new development has been so much lower that the city has already been forced to pay a whopping $439 million to make up shortfalls in debt service on the bonds. And more subsidies will be needed until at least 2019, city officials acknowledge.
As for cost overruns, according to the budget office, the city will have spent another $210 million on additional subway and Hudson Yards infrastructure costs by the end of this year, none of which was talked about back in 2005.
That includes $75 million the Bloomberg administration unexpectedly earmarked last year for the Culture Shed, a performance and entertainment space to be built within Hudson Yards.
By Douglas Feiden, Nov. 16, 2014 8:36 p.m. ET
The building that helped transform Times Square from a brew of urban maladies to a showcase of big-city rebirth has enjoyed a successful 15-year run thanks to a pair of marquee tenants who kept it fully occupied since the day it opened.
Now, 817,000 square feet of space in 4 Times Square has hit the market as media company Condé Nast completes its move to One World Trade Center. And another 826,000 square feet could come on line if law firm Skadden Arps Slate Meagher & Flom LLP completes tentative plans to decamp to a new tower in Manhattan West.
The possible near-emptying of the building underscores the challenge for landlords as the city’s latest crop of new office buildings takes shape downtown and at Hudson Yards. Big tenants are starting to opt for them over older spaces, leaving behind owners with leasing headaches and the need to invest millions of dollars into such things as upgrades, rent inducements and brokerage commissions.
…Douglas Durst, the company’s head, says he is operating in two very different markets and isn’t competing against himself: “The difference in rents shows that the bulk of tenants still prefer a Midtown location,” he said. “The Midtown tenants might sightsee downtown, but they always end up making deals in Midtown.”
…Renting space in Times Square also could be problematic because some tenants don’t like the hordes of tourists the entertainment district attracts.
“It will take some time to rent,” predicted Joe Harbert, president of the eastern region for Colliers International. “They’ll need to find a creative tenant for whom the lights, glitz and excitement of Broadway are appealing and offset any disadvantage from the crowds, street traffic and touristy feel.
…Skadden’s lease continues until a year later. Mr. Durst said he is “operating under the belief” that Skadden is leaving. “We are very happy to be getting more than Skadden is paying or wants to pay.”
Skadden confirmed only that it had signed a letter of intent to move to Manhattan West, a planned Brookfield Property Partners LP development. Condé didn’t discuss the move out.
Meanwhile, area merchants mourning the loss of Condé’s expense-account patrons fret that replacement tenants wont fill the gap. “We’re losing big firms, not attracting them, and it’s already hurting our business,” said Laura Maioglio, owner of Barbetta Restaurant on West 46th Street, which hosted private parties for the publisher and its clients.
Department stores are thriving in a city where they were once written off, aided by a wave of tourists and a clutch of big new developments.
By Adrianne Pasquarelli on December 7, 2014
First, Nordstrom announced it would open its inaugural New York City store on West 57th Street. Neiman Marcus followed, unveiling plans for its first New York store, a 250,000-square-foot flagship at Hudson Yards, west of Penn Station. Saks Fifth Avenue said it plans to open its second Manhattan outpost, at Brookfield Place downtown, and Nordstrom is already said to be shopping for a second store, in lower Manhattan.
Not since the days of Miracle on 34th Street, when the Macy’s Santa famously directed shoppers to archrival Gimbels, has New York City been such a department-store town.
Fueled by more than 50 million tourists pouring into the city annually, record high employment and spending, along with a bumper crop of huge new real estate developments, department-store growth shows no signs of slowing. Their return comes at a time when the rise of omni-channel retailing—in which consumers can buy via the Web, shop at stores and browse by smartphone—has made a brick-and-mortar presence more vital than ever.
A decade ago, when Bloomingdale’s opened a second location, in SoHo, many wondered if there were enough high-end shoppers to go around. These days, stores are doing everything they can to cash in on the growth. Barneys New York will open its second store next year, in Chelsea. Macy’s and Bergdorf Goodman are lavishing millions of dollars on multiyear renovations designed to lure the coveted millennial shopper and stay ahead of the ever-expanding pack.
“Five years ago, they said the department store was dead here,” said Faith Hope Consolo, chairman of retail leasing and sales at Douglas Elliman. “It’s not only alive, it’s thriving.”
…In Hudson Yards, the 1 million-square foot complex where Dallas-based Neiman Marcus will occupy floors five through seven when it opens in 2018, developer Related Cos. will reap higher rents by leasing upper floors to a retailer rather than an office tenant.
Because it will be the first and only Neiman Marcus in the city, the store is expected to become a shopping destination. According to a spokeswoman for Neiman, the chain, which also owns Bergdorf, wasn’t looking to open a store in Manhattan until it was approached by Hudson Yards’ developer with an offer too good to refuse.
The new developments at Hudson Yards and the tower that will rise on West 57th Street give Neiman and Nordstrom the relatively rare opportunity in older urban areas to design their own dream spaces.
By Katherine Clarke on Saturday, December 6, 2014, 10:31 PM
They are a throwback to another era.
The city’s four carriage horse stables have withstood waves of real estate development, recessions, the Great Depression, and, of course, the invention of the automobile.
But now the stable owners are in crisis, caught between a desire to hang on to their horsing tradition — and Mayor de Blasio’s vow to abolish the carriage horse industry.
None of the stable owners, all of whom have been in the horse-carriage business for decades, want to sell their properties, but with their industry under siege from City Hall, they may have no choice but to start answering calls from brokers eager to put the buildings on the market.
So far, owners of the four remaining stables, on the far West Side in Midtown, have resisted offers from real estate investors.
…They’ve pointed fingers at Steve Nislick, a former real estate and parking garage magnate who has financed NYCLASS, the driving force behind the horse ban.
The theory goes that Nislick wants the largest stable, on W. 52nd St., to build a parking garage at the site.
“He just doesn’t want us to own these buildings,” said Cornelius Byrne, the owner of a stable at 547 W. 37th St. “He’s envious. He feels like they should be in someone else’s hands, maybe his or maybe his friend’s.”
Nislick strongly denies the allegation.
“I have no interest in this real estate,” he said in a statement to The News. “Even if someone offered me the chance to buy this real estate, I would say no.”
But there is no shortage of real estate developers who would have interest in the properties.
The largest stable is a 34,823-square-foot building facing DeWitt Clinton Park at 612 W. 52nd St., which houses 79 carriage horses and is owned by a cooperative of 15 carriage drivers, all of whom pooled their money in 2003 to buy the building for $4 million — ironically, with help from City Hall.
…Brokers said selling now would probably get McHugh and his fellow drivers the best deal, but it would also mean risking everything they’ve built on the assumption that de Blasio will succeed in pushing his bill through the City Council.
“I don’t want to sell it out from under myself and then realize it’s not going through,” McHugh said. “Then, I would have put myself out of business.”
Owners of the other two Manhattan stables face a different, and more urgent, dilemma.
Their stables are located in the blazing-hot Hudson Yards district in the far W. 30s, close to where real estate giant the Related Cos. is building a 16-skyscraper megaproject with thousands of condos and brand-new mixed office/retail buildings. The new 7 line subway extension is also slated to open just blocks away, adding value to all the real estate in the area.
IDK how I feel about this. It is ending a centuries old tradition. I hope it doesn’t go through. Does this horse ban have good odds in its favor?
It looks and sounds like those horse stables will be gone for good. The subway extension opening is heating things (real estate) up in the far west side according to this article and another one written earlier this year.
More info. on Hudson Yards
By Sarina Trangle on March 24th, 2015
…But just like the affordable housing plans for the site, which Gov. Andrew Cuomo was quick to shoot down, the funding scheme is a big question mark. While VCF can open up revenue streams for municipalities otherwise limited by capital plans and debt ceilings, it can be risky if forecasted revenues don’t materialize and the government is saddled with larger interest payments and debt.
Some point to Manhattan’s Hudson Yards development as evidence of the risks. The project, located on the far West Side, was VCF’s major debut in New York City. To help fund it, the city backed bonds for a No. 7 subway line extension with projected increases in property taxes and fees.
“Hudson Yards has not been successful,” said David King, assistant professor of architecture, planning and preservation at Columbia University. “That’s a lot of investment that went into expanding the system for land development that’s not showing up … and that’s money that the city cannot or will not spend elsewhere on the transit system.”
Nonetheless, the city’s recent request for proposal (RFP) to study the feasibility of decking over all or part of Sunnyside Yards called for research on the success VCF at Hudson Yards and other sites as well as for a recommendation on its viability in Queens. The RFP does not explicitly state whether the value would come from an upscale development with affordable units, new transit or other infrastructure improvements. But local politicians have made it clear de Blasio’s vision is a non-starter without linking transit investment—and said that the administration is aware of this.
…Specific infrastructure investments aside, Nicole Gelinas, a fellow at the right-leaning policy Manhattan Institute policy research group, said that Hudson Yards is an example of how not to proceed in Queens. The anticipated revenues did not materialize, she said, so the city wound up paying more in interest than it would have with bonds backed by traditional sources. The Bloomberg administration secured $3 billion in bonds to finance building the No. 7 train line out from Times Square to 11th Avenue, but the project proved costlier than expected, even after scrapping plans for a second subway stop. Since the project’s inception, the city has made $152 in capital commitments and $334 million in interest payments, according to the Independent Budget Office.
VCF in most New York City settings is “a gimmick,” Gelinas said. “If you’re going to use [VCF], it’s not really afford-able housing anymore. … It would be high, six-figure costs per apartment.”
VCF also poses political questions. Gelinas and King said it involves selecting investments based on the potential to generate value, not on need. That can divert funds to a single area instead of letting all constituents and legislators compete for them.
“Value capture is ripe for shenanigans,” King said.
From MTA’s Flickr page…
I wonder when Related will start the platform for Phase 2. One would think that they want everything in place so that they can be the first out of the gate for the next real estate cycle.
I think their plan was to commence phase 2 when phase 1 starts to wrap up around 2018.
Hopefully 2016 will provide us with new info and renderings on the residential component aka phase II. At least I believe that it will be residential. The urbanist in me would like to see more commercial towers like 30 Hudson rise, but idk if phase II will be as grandiose as the first.
There’s a 2m SF commercial tower in Phase 2. I hope they use the design they’ve been showing
Not sure where to put this, so i’ll put it here.
volleystudio At the New York Center for Architecture’s opening last night of New York Design. Congrats to VOA Architecture exhibiting their Hudson Yards tower proposal.
Stephen M. Ross Discusses His vision for Hudson Yards
Read Entire Article in link
The centerpiece of the project will be a monumental sculpture by Thomas Heatherwick that anchors the outdoor public space.
“It will be to New York what the Eiffel Tower is to Paris,” claims Ross. “We are keeping it under wraps. We will introduce it in July. I don’t think anybody in the past 50 years or more has spent $150 million privately to develop a public art piece that will really be the icon to the city. The last time something like this happened, we got the Statue of Liberty from France. I realize that’s a bold statement. But everybody we have shown it to has agreed.”
“The key is going to be this sculptural piece,” he adds. “The beauty of the Eiffel Tower is that it is participatory. You ride up it. This is going to be participatory as well. It’s not as tall. It will be more civic. It can contain more people. It will be symbolic of community, of people enjoying a place. It will allow the other buildings to rally together, creating an ensemble of buildings.
Re: Observation Deck
At the 90-story, 30 Hudson Yards, “the drama is going to reside in the observation deck,” Pedersen says. “You come out 80 feet into the air, just a little bit higher than the Empire State Building. The real excitement is getting out on the prow. We put a circular opening through it, so you can stand and look straight down through a glass opening.”
Myself and a few other members have been waiting for the reveal of the monument for a few years now! I really do hope it’s worth the hype, however I somehow dont think anything will really top the ESB and Statue of Liberty as being icons for NY.
I’m sceptical due to some of his other work as his art can resemble Marmite - You either love it or you hate it.
Only 4 months left! It’s almost as bad as waiting for the official final design of Nordstrom, except we barely have any idea whatsoever as to what this will look like.