Related Pulls Its Cards on Hudson Yards Casino Bid as Wynn Resorts Backs Out

Related Companies and Oxford Properties Group’s grand plans for a casino complex at Hudson Yards have fallen apart as Wynn Resorts backed out of the project.

The casino operator announced Monday that it has decided not to submit an application for one of New York City’s three coveted gaming licenses, and has withdrawn from Related and Oxford’s $12 billion casino proposal called Hudson Yards West.

Related will move forward with the zoning change it’s seeking to build on the site — which includes office space, a hotel and residential units — but will continue with a “non-casino zoning application,” spokespeople for Related and Oxford said.

Wynn cited complicated rezoning processes and “persistent opposition” to the project as factors for its decision to pull its chips off the table.

“After careful consideration, we have decided not to lodge an application for a gaming license in New York City,” the spokesperson for Wynn said in a statement.

“The recent rezoning process has made it clear to us that there are uses for our capital more accretive to our shareholders, such as investment in our existing and upcoming developments and stock buy backs, than investing in an area in which we, or any casino operator, will face years of persistent opposition despite our willingness to employ 5,000 New Yorkers,” the spokesperson added.

The Wynn spokesperson added the company “continues to believe that their proposed Hudson Yards West development is an outstanding opportunity for New York City.”

News of Wynn’s decision comes as Related and Oxford announced in a joint statement Monday with Erik Bottcher, a New York City Council member from the West Side, that they have made “significant” modifications to the Hudson Yards project, including in regard to housing and a lawn adjacent to the High Line pedestrian park. The project will also now have more than 2 million square feet of office space and a hotel.

The developers last month upped the housing in the project from 1,500 units to 4,000 units (25 percent of which will be designated affordable housing) in order to sweeten the pot and make its proposal more attractive to the New York State Gaming Commission, as CO previously reported. They announced the increase on Monday as part of the updated project. They’ve also increased the park from 5.6 acres to 6.6 acres with the loss of the casino.

Related and Oxford previously made the residential changes as a result of major opposition against their casino bid from local lawmakers, residents and city officials, including Manhattan Borough President Mark Levine and Manhattan Community Board 4.

The critics claimed the project would require drastic zoning changes to the area that would reduce the number of housing units Related committed to build on the site in 2009, as well as block sunlight from reaching the High Line, as Commercial Observer previously reported.

But Related and Oxford’s new plan addresses some of those concerns, saying the expanded green space will more “closely resemble” the original 2009 zoning plan, and the height of the development will be reduced to “better connect the buildings to the surrounding neighborhood,” according to the announcement.

“The totality of these changes means that we can move forward with a plan that will create critically needed housing at all income levels, provide tens of thousands of good-paying union jobs for working men and women, create a now-6.6-acre public park with activated spaces, and still deliver more than $2 billion in revenue for the Metropolitan Transportation Authority and our subway systems,” Related CEO Jeff Blau said in a statement Monday.

However, the expansion of housing units in the project would be made possible through a payment-in-lieu-of-taxes (PILOT) program, which provides property tax breaks ranging from 15 to 40 percent, and would allow Related and Oxford to “leverage incremental property taxes” on the site, the developers said last month.

The developers’ use of the PILOT program previously caused pushback, though, as critics said the program lets wealthy businesses take advantage of government incentives, CO reported.

It’s unclear how the developers’ fate will unfold now that Wynn has dropped out of the bid, but it seems like they still have a lot of ground to cover (literally) if they want their project to become a reality.

And, while Related and Oxford aren’t vying for a casino license anymore, plenty of developers in New York City are still at the table.

That includes New York Mets owner Steve Cohen and Hard Rock International’s bid for a casino near Queens’ Citi Field; Soloviev Group and Mohegan’s Freedom Plaza project near the United Nations; Thor Equities, Saratoga Casino Holdings, the Chickasaw Nation and Legends’ casino project in Coney Island, Brooklyn; SL Green Realty, Caesars Entertainment and Jay-Z’s Roc Nation’s project in Times Square; Resorts World New York City’s bid to redevelop its Queens casino; and Silverstein Properties, Rush Street Gaming and Greenwood Gaming and Entertainment’s goal for a gaming complex on Manhattan’s Far West Side.

Isabelle Durso can be reached at idurso@commercialobserver.com.