Tishman Speyer to build skyscrapers, apartments on NYC waterfront

March 27, 2008 at 7:05 pm Leave a comment

Politicians say it could rival Rockefeller Center. The skyscrapers, apartments, cultural center and parkland planned for a desolate neighborhood along the Hudson River will turn the area into Manhattan’s next big business district, they say.
“Just think how (Rockefeller Center) transformed midtown Manhattan,” Mayor Michael Bloomberg said as the developer that owns that famed complex won a billion-dollar deal Wednesday to build over government-owned rail yards on the riverfront.

“This is going to do the same thing for the Far West Side,” Bloomberg said.

Tishman Speyer Properties, which also owns the Chrysler Building, offered the highest bid _ just over $1 billion _ to the Metropolitan Transportation Authority for the air rights above the Hudson rail yards.

The firm raised its initial offer by more than $100 million to outbid four other developers. Tishman’s plan includes 3,000 apartments and a version of Rome’s Spanish Steps, but all the others offered more residential development and most boasted more open space.

Tishman Speyer also agreed to pay more than $2 billion to build a platform over the yards, where Long Island Rail Road trains are parked near Penn Station.

The MTA approved the choice of Tishman Speyer at its board meeting, but the deal is far from complete. The section of the rail yards closest to the Hudson still needs to be rezoned for the development; the process will likely take two years and could change the way land is used.

The developers wouldn’t discuss how they would pay to build the platforms, and they have no anchor tenant after Morgan Stanley dropped out. And the MTA will still have to guarantee the extension of the No. 7 subway line over the next decade. Tishman Speyer is allowed to walk away from the deal if the agency doesn’t extend the line toward the Hudson River. The 7 connects Manhattan and Queens.

The MTA, which runs the nation’s largest mass-transit system, said the rail yard development deal would help plug holes in its budget over the next three years.

Tishman Speyer secured a 99-year lease to the land but hopes to buy the buildings. Its president said the first building could be completed and occupied by 2014. No other timetables were offered for the rest of the project.

Tishman outbid a joint venture of The Durst Organization and Vornado Realty Trust for rights to the 26 acres of rail yards on either side of 11th Avenue between 30th and 33rd Streets, near the Jacob K. Javits Convention Center. The Related Cos., once a front-runner for the project, dropped its bid for the rail yards after its anchor tenant, News Corp., dropped out. Brookfield Properties also abandoned its bid last month.

The MTA’s chief financial officer and negotiator on the deal, Garry Dellaverson, said Durst/Vornado continued to make counteroffers until Tuesday evening, but the firms still bid about $40 million less than Tishman Speyer.

Tishman Speyer had proposed more office space than any of the other developers _ more than 10 million square feet, as much as is being rebuilt at the World Trade Center site downtown.

Firm president Rob Speyer said “there’s some inspiration that we can take” from the other developers’ bids, but he wouldn’t specify how the development would change.

Durst/Vornado had proposed about half as much office space and twice as many apartments, a ratio favored by community leaders who sought a neighborhood geared more toward residents than offices.

“This is just a commercial fortress, and not very well connected to its surroundings, and not an appealing place to think about being,” said Anna Levin, who heads an advisory committee of community groups interested in the development.

She said it was the least appealing of the five proposals presented months ago to the public.

Speyer said the amount of planned office space wouldn’t change.

“There’s a dramatic shortage of quality office space in Manhattan,” he said. “That is truly what is driving the Hudson yards concept.”



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