New Push May Hinder Far West Side Development

Just as the city and state are setting their sights on creating an entirely new business district on the far West Side of Manhattan, local residents — with the support of the City Council speaker, Christine Quinn — are aiming to create a historic district just south of the Hudson Rail Yards.The proposal is already eliciting concerns from the development community, which is questioning the rationale of adding obstacles to the growth of a long-neglected corner of the city.Last week, Ms. Quinn’s district office held a meeting for residents and business owners to kick-start the landmarking process for the area bound by 28th and 25th streets and Tenth and Twelfth avenues, which lies just one block south of the Hudson Rail Yards. A total of 55 buildings — including the Baltimore and Ohio Railroad Company Freight Warehouse, the Starrett-Lehigh Building, and the New York Terminal Warehouse Company’s Central Stores — would be protected under the landmarks law, which could hinder any further development of the area.“One has to question why you would create a district on the perimeter of a major upzoning and a development possibility that the city of New York has been the leading proponent of,” the president of the Real Estate Board of New York, Steven Spinola, said. “I am questioning the common sense of doing something there unless it is exceptionally worthy of landmark consideration.”“This has nothing to do with the development,” Ms. Quinn’s staff member and liaison to the West Side development, Danielle DeCerbo, said. “This is an area of Manhattan that has merited landmarking for a very long time.” Ms. DeCerbo said the historic site was identified in June 2005, when the Chelsea rezoning occurred, and noted that other warehouses designated as landmarks — such as the Domino Sugar refinery and the Austin, Nichols & Co. Warehouse in Williamsburg — prove that their integration into new development projects is possible.“I think it’s foolish to say that this in any way hinders a new residential and commercial district,” she said.A spokeswoman for the Landmark Commission said a hearing would likely be scheduled in spring.A number of warehouses in the proposed district, including the New York Terminal Warehouse Co.’s Central Stores, were originally built to offer access to the once busy Hudson River waterfront, and there are still traces of the twin railroad lines running through the block-long building. The building used to house a popular nightclub, Tunnel, but in recent years has been dedicated to small office space, galleries, and a high-end event space. The Starrett-Lehigh Building, which occupies an entire city block, contains the offices of Martha Stewart, Club Monaco, and Hugo Boss, among others.The creation of a historic district just south of Hudson Yards could further complicate the bidding process for the right to develop Manhattan’s largest undeveloped parcel. Just recently, bidders have expressed pessimism about the economic downturn and an updated request for proposals from the site’s owner — the Metropolitan Transportation Authority. In its newest proposal issued last week, the MTA said it prefers to lease the property for 99 years rather than sell it, and is seeking an “equity-type interest” in any project built on the land.It is unclear how the changes in the bid proposal and the creation of a landmarked neighbor just to the south could alter the bids.None of the companies involved in the five bids, including the Durst Organization and Vornado Realty Trust, Tishman Speyer, Related Companies, Brookfield Properties, and Extell Development, responded to requests for comment.A real estate analyst who declined to be identified because the proposals are outstanding estimated that the upfront bids could drop by as much as 15% when accounting for a back-end equity deal struck between the developer and the MTA.The president of the Gotham Organization, David Pickett, said that any equity sharing deal between a developer and the MTA could add unnecessary complications given the current market environment. “Depending on the terms of the payout of the land that may be a little bit of a red herring because you are talking about things that will not be brought to market for years and could change three times before then. The appetite for banks it is way off and I don’t think it is a time to be adding complexity,” Mr. Pickett said.The Real Estate Board’s Mr. Spinola said he doubted any of the recent complications would decrease interest among the five bidders. “I don’t think anyone is running way from this request,” he said.

New Push May Hinder Far West Side Development

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