The West Side Rail Yards—It’s Alive!
The Related Companies, the real estate giant that built the Time Warner Center, is nearing an agreement to commit to building over the West Side rail yards, an oft-delayed project that could be Manhattan’s single biggest development.
The firm envisions $15 billion of new office, hotel and apartment towers on a 26-acre site near the Javits Center.
Related, led by billionaire Miami Dolphins owner Stephen Ross, was conditionally designated to develop the site by the yards’ owner, the M.T.A., back in 2008. The firm now faces a Jan. 31 deadline to sign a contract and put down a deposit of more than $40 million, a step it now seems poised to take after earlier delays related to the economy.
Staring at a similar deadline 12 months ago, Related—understandably reticent to commit to payments worth $1 billion amid a lending drought and a global recession—successfully lobbied the M.T.A. to put off the cutoff date for a contract by a year, hoping the economy would improve substantially.
Apparently still keen on the deal, Mr. Ross is now looking to buy himself some more breathing room, effectively setting down a “Related Cos.” placeholder on the property until better times, when he would be committed to return. According to multiple people familiar with the discussions, Related has agreed to sign a contract consenting to the land sale, putting up the deposit needed to do so.
But, according to those indivduals, the firm would be required to close on the deal and commit to its 99-year lease and payments worth $1 billion only once the local economy improves and hits a set of “triggers”—quantifiable measures like improved unemployment and commercial vacancy rates.
There are still other outstanding issues to be hashed out between Related and the M.T.A. before a contract is signed, but people familiar with the discussions expressed optimism that the deal would be made, characterizing the remaining issues as lengthy paperwork.
Should a contract indeed be signed, it would represent an unusual display of forward motion in the sullen economy, which has caused landowners across the city to scrap or pull out of development plans.