March 26, 2008Vibrant Mixed-Use Development Will Fulfill Hudson Yards Vision; $1 Billion Proposal Provides Critical Funding for MTA Capital Plan
Mayor Michael R. Bloomberg, Governor David A. Paterson, Metropolitan Transportation Authority Executive Director and CEO Elliot G. Sander, and Chairman H. Dale Hemmerdinger today announced the conditional selection of Tishman Speyer to develop the air space over the two development sites that compose the MTA’s John D. Caemmerer Rail Yard – the Western Rail Yard (WRY) and the Eastern Rail Yard (ERY). Tishman Speyer competed against four world-class development teams and won with a proposal for a vibrant, mixed-use development with a net present value of approximately $1 billion that will support the MTA’s 2005-2009 Capital Program.
The Tishman Speyer proposal would construct more than 12 million square feet of commercial, residential, retail, cultural and community space while preserving the High Line’s linear open space, including 379 units of affordable housing, and pursuing a LEED Gold standard for sustainability. In addition to these features, Tishman Speyer was chosen because it provided the highest net present value to the MTA and the backing of one of the leading developers of first class real estate in the world.
The MTA-owned Caemmerer Yard stores Long Island Rail Road (LIRR) commuter trains in close proximity to Penn Station, allowing the LIRR to move more than 235,000 commuters through the terminal each day. The construction proposal will provide for safe, continuous and uninterrupted LIRR service.
“Regardless of the current economic slowdown, New York’s long-term prospects are very bright if we make the decisions now to ensure our future. We’ve done that today,” said Mayor Bloomberg. “The vision that Tishman Speyer has put forward will unlock the potential of the MTA rail yards and, in turn, the Hudson Yards neighborhood. The outstanding team that they’ve assembled and their unparalleled track record as one of our city’s pre-eminent developers absolutely merit the vote of confidence that the MTA board has given them.”
“The selection of Tishman Speyer will set the stage for construction of a beautiful, world-class development that will further the transformation of the Far West Side of Manhattan,” said Governor Paterson. “I applaud the MTA for working closely with community groups to ensure that this is an environmentally-conscious project that includes affordable housing and is good forresidents, businesses and visitors. The commitment by Tishman Speyer demonstrates to the world despite uncertain economic times, New York City is still a great investment.”
“We are extremely pleased that despite a tough market we reached a deal that recognizes the full value of these extraordinary development sites and provides vital funding for our capital needs and enormous benefit for the Far West Side,” said Metropolitan Transportation Authority Executive Director and CEO Elliot G. Sander.
“The Board’s top priority was fulfilling our responsibility to fund the capital program, which we achieved beyond our expectations,” said MTA Chairman H. Dale Hemmerdinger. “I am thrilled that we were also able to address community concerns and look forward to a continuing dialogue with West Side residents.”
“Office buildings, housing, open space and new jobs -- these elements are all critical to the development of the West Side and the future of New York City,” said U.S. Senator Charles Schumer. “Today’s agreement on the Hudson Yards will not only bring much needed revenue to the MTA, but will catalyze growth throughout the West Side and ensure that New York stays competitive in the 21st Century.”
“I am very pleased that we are moving ever closer to realizing the full potential of the West Side,” said U.S. Senator Hillary Clinton. “This is a significant commitment to open space, affordable housing and environmental sustainability that will also make a significant financial contribution to our public transportation infrastructure.”
“The Hudson Yards represents one of the last great building opportunities on the West Side of Manhattan,” said City Council Speaker Christine C. Quinn. “Now that an agreement has been reached between the MTA and Tishman Speyer, the Council can work with the community to ensure that permanent affordable housing is appropriately incorporated into the project.”
“This project will create much-needed revenue for our subways and buses, and I am happy to join Governor Paterson, Mayor Bloomberg, the MTA and Tishman Speyer in announcing that it is moving forward,” said Manhattan Borough President Scott M. Stringer. “As a participant in the ULURP process I look forward to continuing to work with the local community, the City Planning Commission and the City Council to help make sure that the new Hudson Yards meets the needs of the neighborhood, the city and entire metropolitan region.”
“We are honored to have been chosen to develop this important section of our city. Its location and scale afford an unprecedented opportunity to create a new and special neighborhood for all New Yorkers,” said Rob Speyer, President of Tishman Speyer. “We look forward to working with the MTA as well as the State and City administrations in the coming years to establish a vibrant development that will engage and enliven our city.”
“Friends of the High Line commends the MTA’s, Governor Paterson’s, Mayor Bloomberg’s, and Tishman Speyer’s commitment to preserving the majority of the historic High Line structure at the rail yards, and we look forward to working with all parties to ensure that the remaining sections – the spur over Tenth Avenue and the full section along 30th Street – are preserved as well,” said Robert Hammond, Co-Founder, Friends of the High Line. “The treatment of the High Line in Tishman Speyer’s bid shows considerable progress from the days when it was presumed the site could not be developed without its demolition. We applaud theMTA, Governor Paterson, Mayor Bloomberg, and Tishman Speyer for their recognition of the High Line as an asset. We are encouraged that they now share our vision of a continuous walkway, connecting the new residential, commercial and open space at the rail yards with the gallery district of West Chelsea and south to Gansevoort Street, that will be the next great city public park for New Yorkers and visitors alike.”
In July of 2007, the MTA issued two separate Requests for Proposals (RFP) for the sale of and/or long term leasing of air space and related real property interests for development at the Eastern Rail Yard (ERY) and Western Rail Yard (WRY) sections of the Long Island Rail Road’s John D. Caemmerer West Side Yard. Two of the primary objectives of the RFPs are to maximize revenue for MTA’s capital plan and to assure safe, uninterrupted LIRR service at the WSY. Currently the WSY is a 24/7 active storage, maintenance, and cleaning facility for LIRR. The third goal of the RFPs is to promote excellence in architecture, urban design, and sustainability in keeping with the City’s vision for the economic development and revitalization of the Hudson Yards area.
On October 11, 2007, the MTA received proposals from five qualified real estate development firms for both yards. The proposals were evaluated over several months by a Selection Committee comprising a majority of MTA members and two representatives from the Hudson Yards Development Corporation. After negotiations with several of the proposers, the Selection Committee recommended the Tishman Speyer proposal to the MTA Board today.
The proposal includes the following elements:
The Western Rail Yard:
Located at the heart of the Far West Side, the 13-acre WRY is bordered by West 30th and 33rd streets, between 11th and 12th avenues. The Tishman Speyer proposal adheres to the design guidelines outlined in the RFP, with approximately 6 million square feet. In addition to the affordable housing mandated on the Western Rail Yard, as part of the development process, the MTA is proposing to make available to the City the property on the southeast corner of 54th Street and 9th Avenue at the time of a closing. The City will provide $40 million to create new affordable housing units at this location.
The Eastern Rail Yard:
The 13-acre ERY sits between 10th and 11th avenues from West 30th to 33rd streets. The ERY was re-zoned in January 2005 as part of the City’s Hudson Yards re-zoning, and allows for approximately 6.3 million square feet of mixed-use development including office, residential, hotel, retail, cultural and parking facilities, and public open space. The zoning controls for the site require approximately seven acres of public open space, including a significant public plaza.
The terms of the deal will be a 99-year ground lease, severable, with options to purchase severed fee parcels. The net present value of the proposal is $1.004 billion.
At its monthly meeting today, the MTA Board authorized the MTA CEO to execute a Conditional Designation Letter (CDL) with the developer within the next 14 days. Upon completion of this CDL, the MTA would then enter into a contract with the developer within the next 120 days. The proposal for the WRY would then begin an environmental and public review, which consists of preparation of an environmental impact statement followed by the City's Uniform Land Use Review Procedure (ULURP), a seven-month series of reviews by the community board, Borough President, City Planning Commission and City Council. The ERY was re-zoned in January 2005 and construction could commence upon completion of the contract with the developer.
Tishman Speyer and its affiliates currently own approximately 69 million square feet of commercial properties and approximately 100,000 apartment units worldwide, and controls Rockefeller Center, the Chrysler Building and more than 100 other towers in New York, Washington, London, Paris and São Paulo, Brazil.