BREAKING NEWS
May 9, 2008
Deal to Build at Railyards on West Side Collapses
Six weeks after the Metropolitan Transportation Authority selected Tishman Speyer Properties to build a vast complex of office towers, apartment buildings and parks over the railyards on the West Side of Manhattan, the deal has fallen apart.
Gary Dellaverson, the authority’s chief financial officer, said the negotiations foundered Thursday afternoon after Tishman Speyer insisted on changing the terms of the $1 billion development, which both parties had agreed to on March 26.
The change would have substantially slowed the flow of millions of dollars in annual rent and fees to the authority and introduced a note of uncertainty about the pace of construction at the 26-acre site, which straddles 11th Avenue between 30th and 33rd Streets, he said.
Tishman Speyer had developed a plan calling for four or five major office towers and seven apartment buildings with a total of 3,053 apartments, as well as 13 acres of open space, a school and a cultural institution. But shortly before the transportation authority selected Tishman Speyer, it lost its financial partner and its anchor tenant, Morgan Stanley.
The developer also jettisoned its designs by the architect Helmut Jahn of Chicago, the executives said.
The New York Times |
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From Rust to Dust: Reversal Lands On 11th Ave. Development
By: Pete Kendall, May 9, 2008 |
The social harmony reflected in the speculative fury and swarming show of flamboyance surrounding [Manhattan] real estate make it the perfect place for a classic New York City unwinding.
Sociotimes, June 13, 2007 |
Here's the key sentence: “Developers who a year ago would have gleefully bid any price for a building or a project are now delaying or abandoning projects in New York and elsewhere as the economy has slowed and many lenders have balked at financing real estate projects in the wake of the credit crisis.” As we said here in April 2001, New York City is a “lighting rod for social mood.” The 180-degree swing in the Big Apple’s real estate market confirms the new south-bound trajectory of social mood.
The article also notes that “the sudden setback in the development of the railyards is a very public embarrassment for everyone involved, including the developer, whose reputation may be at risk; the authority, which was counting on the money for its capital budget; and the Bloomberg administration, which had made the transformation of the once-industrial West Side a centerpiece of its two-term mayoralty.” Another failed bidder for the site said “It would be a real tragedy for the city if the project did not proceed. The M.T.A. must find a way to keep the momentum going.” But the momentum actually stalled months ago as plans for the expansion of the nearby Javits Convention Center had collapsed and a “key element” of the West Side development, the extension of the No. 7 subway line was never resolved.
In fact, one assemblyman, Richard Brodsky claims, “Every single West Side project is in various state of collapse.” Actually, this is just the end of what might have been if the long uptrend remained. The real fun begins when the existing real estate and infrastructure starts to break down. At the rate of the dream-state is crashing, it probably won’t be long. |
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