Tishman Takes NYC Train Yards Deal

The bidding battle for the right to develop Manhattan’s vast Hudson Yards project is won—by Tishman Speyer Properties. At a press conference yesterday the Metropolitan Transit Authority gave the firm the nod after it upped its initial bid by $100 million to over $1 billion for the air rights over the yards. Tishman must now spend $2 billion to cover the train yards, which are near Penn Station. Tishman beat out the Durst Organization, Vornado Realty, The Related Cos. and Brookfield Properties for the deal.”Just think how (Rockefeller Center) transformed midtown Manhattan,” Mayor Michael Bloomberg noted Wednesday. This is going to do the same thing for the Far West Side.” Tishman plans call for the development of 3,000 apartments and a version of Rome’s Spanish Steps, a school and open space–as well as four towers holding 10 million square feet of office space–in a vast development that will cover 26 acres of rail yards spanning 11th Avenue from 30th to 33rd Streets.Winning isn’t everything, however. Rezoning, which could take several years, still needs to be done for parts of the rail yards. Other challenges also loom. Morgan Stanley was supposed to be Tishman’s anchor tenant—but quit the project earlier when it became clear it could not move in by 2013. In addition, there are other vast office projects, notably the Moynihan Station project nearby and the rebuilt World Trade Center that will compete for tenants. And in today’s tight credit market, finding financing for such a long-term, expensive project is far from easy–although the MTA did suggest that tax-free bonds could be used to finance the $2 billion roof over the yards.