commits Related to a firm closing
date on the Eastern Rail Yard.
NEW YORK CITY-Shovels will begin moving dirt soon at the Hudson Yards redevelopment on Manhattan’s Far West Side under a modified contract approved Wednesday by the Metropolitan Transportation Authority’s board of directors. The revised contract allows Related Cos. to begin foundation work on the headquarters for Coach Inc. before closing on its deal with the MTA for the 26-acre site.
In exchange, though, Related is committing for the first time to a firm closing date: June 1, 2013. Previously, the developer had the right to hold off signing on the dotted line for the Eastern Rail Yard portion of the site, and begin paying rent on its 99-year lease, until three triggers in the city’s real estate market were met: Midtown’s office availability rate declining to 11%, apartment sale prices reaching an average $1,200 per square foot and the AIA Architectural Billings Index hitting 50. The three markers have not yet been met.
An MTA staff summary outlined the reason that Related sought to modify its contract: “deadlines from Coach and other prospective occupants to commence construction” on the 1.7-million-square-foot tower, at which Coach will be the anchor tenant, in order to have it ready for occupancy by mid-2015.
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Accordingly, Related was prepared to commit to a firm closing date; the staff summary noted that it may happen as late as next June or as early as the end of next month. The company is not obligated to close on the Western Rail Yard deal until the one-year anniversary of the ERY deal closing.
The modified agreement allows Related to perform approximately $50 million worth of site preparation work, “to consist of excavation, dewatering and the installation of caissons, piles, foundations and site utilities.” The prep work needs to be completed before construction on the 47-story Coach tower can commence; however, unlike other Hudson Yards towers planned by Related and its partner Oxford Properties Group, the Coach HQ will be “terra firma.” That is, it can be built on solid ground at the corner of Tenth Avenue and West 30th Street, the site’s southeast corner, whereas other towers will need to wait until the developers put up platforms over the rail yards, which are in active daily use by the MTA.
A related spokeswoman tells GlobeSt.com that her company is “pleased to begin construction on the Hudson Yards imminently. The 26-acre development project will write New York City’s next chapter by transforming the railyards into a vibrant new neighborhood. The development will be a dynamic hub of creativity and innovation and create tens of thousands of jobs while serving as the commercial home to world-class global brands, diverse retailers and a new residential community.” The New York Post reported on Tuesday that the MTA’s finance committee had approved the modified contract, with the full board expected to give its blessing at Wednesday’s meeting.