This past November, I blogged about how the $1 billion dollar Hudson Rail Yards deal between the MTA & Related Companies/Goldman Sachs faced a delay. Now a few short months later the delay has become official as both sides agreed to hold off the closing for up to one year (01/31/10). The MTA issued a statement about the extension via e-mail:
The Metropolitan Transportation Authority (MTA) today finalized an agreement with Related Companies/Goldman Sachs to extend the partnership’s period of “conditional designation” as developer of the MTA’s East and West Side Rail Yards for up to an additional year. Due to the economic downturn and collapse of traditional commercial lending, the parties were unable to reach final contractual terms by January 31, the end of the existing designation period.
Nonetheless, the MTA and Related/Goldman remain fully committed both to the Eastern Rail Yard and Western Rail Yard projects and the business terms of the deal. The agreement provides the MTA with a non-refundable payment of $8.6 million in exchange for the extension (up to half of which may be used to offset expenses incurred by MTA, the City and the developer regarding, principally, the continuation of the zoning and ULURP process).
In addition, the MTA and Related/Goldman agreed on a set of revised provisions to guide our contractual negotiations during the extended designation period. While the extension is up to a year, both parties are committed to moving forward as quickly as possible, and the planning process continues to advance.
Elliot G. Sander, Executive Director and CEO of the MTA said, “Today’s agreement acknowledges current economic realities without derailing our partnership on this important site for New York’s future. The development team made their commitment to the project clear and this new understanding keeps us on the path to obtain the funding critically needed for the MTA’s current capital plan.”
Stephen M. Ross, Chairman and CEO of Related Companies said, “The development of Hudson Yards is critical to the future of New York. Today’s agreement creates the flexibility needed in light of current market conditions, while ensuring that we can continue to collectively move forward with the necessary planning approvals and pre-construction logistics. When the markets rebound and with zoning in place, New York City will be poised to build a vibrant new mixed-use community at the rail yards.”
This extension comes as no surprise considering the state of our economy. While the MTA could really use the infusion of cash from this deal being done, getting a penalty payment is better than nothing. Lets hope the two sides can close this deal in the coming months.
xoxo Transit Blogger