You know the old saying, “when it rains it pours”. The saying definitely applies to MTA CFO Gary Dellaverson who has made press but for the wrong reasons. The initial story from the New York Times focused on the risky investments into C.D.O. bonds (Collateralized Debt Obligations) by many agencies including the MTA. Now the New York Observer talks about how the MTA failed to meet the deadline it outlined in the contract to sell the rights to develop the Hudson Rail Yards site as part of a $1 billion dollar deal with Related Companies. Eliot Brown has the details in this report:
The deal to put $15 billion in residential and commercial development atop the M.T.A.’s West Side rail yards has hit a delay, as the agency will not sign a contract with developer Related Companies this week, as was originally scheduled. The state authority says it has reached an agreement with Related (which is in a joint venture with Goldman Sachs) to push back the deadline for signing a contract for the property by another 90 days, as the M.T.A. has been slower than expected in producing the needed paperwork.
“We have together agreed on an extension of the designation period,” said Gary Dellaverson, the CFO of the M.T.A. (who has to have one of the least enviable jobs in government these days). “Our expectation was that the documents would have been turned a month and a half ago.
“This is my fault—the fault of the M.T.A.,” he said. “This is not a product of either Related or Goldman or their lawyers.”
The M.T.A. named Related the conditionally designated developer back in May, when Related beat out other developers, offering to pay over $1 billion for the rights to develop the 26-acre West Side site. At the time, the agency gave itself and Related 165 days to sign a contract, according to details of the agreement provided to the M.T.A. board at the time, a window that would have expired today. But the agency has been slow to create the contract, a fact it says is due in part to the collapse of the credit markets.
The M.T.A.’s attorneys for the deal, Paul, Weiss, have had much work related to the financial crisis and have been slower than expected in finishing their work, Mr. Dellaverson said. As a result, the first draft of the contract and other documents have not yet been provided to Related.
Click here for the complete report.
How on earth can the MTA justify causing a delay in a deal that would bring them $1 billion dollars. The official closing of this deal should have been one of the top priorities handled by the agency. This deal was in place way before the economic crisis hit so that can’t be an excuse for such poor execution. Lets just hope for their sake that they are right & that the downturn in the economy does not curb the overall value of this deal. With the financial hole the agency is in, what more motivation do they need to close this deal? I mean they didn’t need an economic crisis to occur to know that this deal needed to be finalized. Get with the program Dellaverson!
xoxo Transit Blogger