MTA Is Said To Be Close To Hudson Yards Decision

By PETER KIEFER, Staff Reporter of the Sun
March 24, 2008

The Metropolitan Transportation Authority may select the developer that will get the job of transforming the 26-acre Hudson Rail Yards property on Manhattan's West Side as early as this week.

A development source with knowledge of the negotiations said Tishman Speyer Properties has emerged as the leading candidate among the four remaining bids. Also, the bid offered by a joint venture of the Durst Organization and Vornado Realty Trust was still in play over the weekend, according to the source, who declined to speak for attribution due to the sensitivity of the negotiations.

News that the MTA was close to making a decision and that Tishman Speyer has emerged as the leading candidate was first reported in the New York Times. A spokesman for the MTA told the paper a decision was "scheduled" to be brought to a vote by the MTA's 17-member board of directors at a meeting sometime this week.

The MTA spokesman was unavailable for comment yesterday. A decision this week would meet the deadline that the MTA had set for itself and defy speculation that a decision before the end of March was unrealistic due to the resignation of Governor Spitzer in the wake of a prostitution scandal.

The majority of the MTA's board of directors are nominated by the governor.

The other remaining bidders are Vornado Realty Trust and a joint bid by Extell Development Co. and the Related Companies.

The MTA's original request for proposals was sent out in July 2007 and bids were submitted in October 2007. In January, the MTA requested additional information from the five bidders, seeking a more detailed financial payment plan for the 99-year lease on the property.

Last month, Brookfield Properties withdrew its bid from consideration and said it would focus on another rail yard site between the Hudson Yards and Penn Station. A week later, Tishman Speyer lost its anchor tenant, Morgan Stanley.

Since the original RFP was sent out, New York City's development community has seen a softening credit market and a number of major projects have been scaled back or are facing budget shortfalls.

Tishman Speyer's original plan was designed by architect Helmut Jahn and landscape architect Peter Walker. It included 13 acres of new open public space, more than 10 million square feet of total office space, 3,000 residential units, about 300 permanently affordable apartments and 550,000 square feet of retail space.