Tishman’s Loss is Goldman Sachs, Related’s Gain at $1B Hudson Yards
- May 20, 2008
It’s official. Just one week after news emerged that New York’s Metropolitan Transportation Authority’s deal with Tishman Speyer for a proposed $1 billion redevelopment of Manhattan’s Hudson Yards had collapsed, the MTA has awarded a joint venture consisting of Related Cos. and Goldman Sachs the developments rights for endeavor. The project involves the development of airspace over sites that comprise the Eastern Rail Yard and John Caemmerer Rail Yard–the Western Rail Yard. In a prepared statement, New York City Mayor Michael Bloomberg alluded to the failed negotiations with Tishman Speyer, saying, “Despite the setbacks of the last few weeks, we are certain that Related and Goldman will realize this tremendous opportunity to develop what is really the only large parcel of undeveloped space left in Manhattan.” On March 26, Bloomberg, Governor David Paterson joined with MTA officials to announce the conditional selection of Tishman Speyer for the project. Tishman Speyer’s proposal detailed the construction of over 12 million square feet of office, retail, cultural and community space, and a residential segment to include nearly 380 units of affordable housing–all of which would be designed to meet LEED Gold certification standards. Terms of the deal called for Tishman to enter into a 99-year ground lease with the potential to acquire certain parcels. The Related and Goldman Sachs team was one of five that submitted pitches to the MTA in October 2007 in response to the transit organization’s Request for Proposals for the disposition and/or long-term leasing of the air space. The joint venture’s nearly 6.3 million-square-foot vision for the Eastern Rail Yard of Hudson Yards includes approximately 3.6 million square feet of office space, 565,000 square feet of retail, hotel accommodations totaling 265,000 square feet, a 200,000-square-foot area reserved for community and cultural uses, and 1.7 million square feet of residential. On tap for the Western Rail Yard is the development of nearly 5.8 million square feet encompassing a 1.9 million-square-foot office tower, 192,000 square feet of retail, a 120,000-square-foot school and just over 2.63 million square feet of residential space. For both yards, a minimum of 20 percent of the residential offerings would be reserved as permanent affordable housing, and 55 percent of the site would be designated public open space. While Related and Goldman Sachs are now the anointed ones, all is not set in stone for the partnership. The MTA Board will gather at a meeting this Thursday, May 22, to pursue approval of the deal and if the Conditional Designation Letter is signed, the MTA and the joint venture will enter into a contract within the next few months for its $1 billion redevelopment of the Hudson Yards.