The Hudson Yards Project June 18, 2013. HUDSON YARDS DEVELOPMENT CORPORATION Hudson Yards Project...

The Hudson Yards Project

June 18, 2013

HUDSON YARDS DEVELOPMENT CORPORATION

Hudson Yards Project Area

Hudson Yards Area is bounded by West 43rd Street, 7th & 8th Avenues, West 30th Street and 12th Avenue

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The Redevelopment Opportunity

Looking north from West 28th Street Looking east from West 31st Street

Antiquated and restrictive zoning

Poor mass transit access

No public open space

Large tracts of under-developed land devoted to public transportation uses

2


Master Plan: Caemmerer West Side Yard released by the

MTA (1988)

•Plan proposed a mixed-use development of the MTA Rail Yards and the block south of the Javits Convention Center

•Report concluded a rezoning was necessary to permit a floor area ratio of 12 to support the plan

•Success of plan contingent upon extension of rapid transit access to the area

Special Jacob K. Javits Convention Center

District Created (1990)

•Established to facilitate mixed-use development adjacent to the Javits Convention Center

•Permitted FAR as high as 10 for residential, office, hotel, and community facility uses on sites surrounding the Javits plaza

•No development resulted

City Planning Commission Study of

the Hudson Yards Area (1993)

•Shaping the City’s Future report concluded that expanding existing CBDs was essential to accommodate long-term growth

•Hudson Yards was identified as an extension of the Midtown CBD

•Report concluded that the City must ensure “that appropriate as-of-right zoning is in place to accommodate expansion and future office needs.”

•The report suggested extending the No. 7 Subway west through Hudson Yards and on to New Jersey

The HY Idea Takes Shape

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HUDSON YARDS DEVELOPMENT CORPORATION 4

The HY Project Plan Evolves

•Study linked land use and future development with expansion of mass transit

•Existing conditions analysis of HY area focused on land use, transportation infrastructure and services, and the area’s tax base

•Transportation analysis of whether the street network could support additional development

•Identified the need for a “self-financing” model for the subway extension

DCP Study of Extending the No. 7

Subway Line to Hudson Yards (1999)

•Identified the need for a transit-oriented mixed-use extension of the Midtown CBD

•Established three essential components for redeveloping the HY area:•Rezoning to allow for millions of square feet of mixed-use development

•Construction of the No. 7 Subway Extension

•Creation of open space amenities to attract businesses, residents, and visitors

Far West Midtown: A Framework for

Development (2001)

•DCP and NYCEDC engaged a multi-disciplinary urban design team to create a master plan for HY in 2002

Master Plan (2002)

•City of New York hired consultants Economics Research Associates (ERA) and Cushman & Wakefield (C&W) to forecast long-term growth of office-using employment (OUE) and to analyze HY’s ability to capture future demand for Class A office space in Midtown

Demand Study (2002)

•DCP releases Preferred Direction Plan for HY in 2003

•PDP confirmed the need for the three project components outlined in the 2001 Far West Midtown report

Preferred Direction Plan (2003)


The Public Sector Organizes

City creates the administrative structure to execute the HY plan

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HUDSON YARDS INFRASTRUCTURE CORPORATION HUDSON YARDS DEVELOPMENT CORPORATION

Created in 2004 Created in 2005

Oversees project financing and cost containment Responsible for the implementation of City’s HY development program

Board members:

OMB Budget Director

Deputy Mayor for Operations

Deputy Mayor for Economic Development

City Comptroller

Speaker of City Council

Board members:

All five HYIC Board Members, plus: Commissioners of SBS, Parks, HPD and City

Planning President, NYCEDC Manhattan Borough President Council Member for District 3 Community Board 4 Chair

Staffed by City’s Office of Management and Budget 7 full-time employees


HYDC

DOT

DEP

DCP

DPR

NYCEDC

MTA

MVVA (Park Designers)

Developers

Community

City Hall/OMB/HYIC

Managing the HY Project

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Land Use

Predominantly residential

Mixed use

Predominantly Commercial

Open space

Cultural

12/1912/19

6.5(10)/136.5(10)/13

6.5(10)/126.5(10)/12

10/19.510/19.5

10/1810/18

666.5/156.5/15 66

1111

10/3310/33

7.57.5

10/1510/15

10/1210/12

1010

6.5/ 13

6.5/ 13

10/2410/24

10/21.610/21.6

10/2010/20

10/1210/12

10/3310/33

10/2410/24

10/ 21.610/

21.6

34th St.

42nd St.

8th A

ve.

10th

Ave

.

1010

The 2005/2009 Rezonings

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Hudson Park & Boulevard

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Hudson Park and Boulevard → Clockwise: Block #1 (West 33rd/34th Streets); Block #2 (West

34th/35th Streets); and schematic design of park

and boulevard;

33RD ST

35TH ST

36TH ST

34TH ST

HUDSON YARDS DEVELOPMENT CORPORATION10

34th S

treet33rd S

treet

11th Avenue

Future 34th

Station

Entrance

Vent

Building

Hudson Park & Boulevard

Construction Status – Site J (June 2013)


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Construction Status – Escalators to Mezzanine

HUDSON YARDS DEVELOPMENT CORPORATION12

Construction Status – Tunnel (June 2013)


Project Costs and Financing Structure

Total Cost ($mm)

No. 7 Subway extension:

Construction 2,260

Contingency 107

Acquisition of a portion of ERY TDRs from MTA 200

Parks, Streets and Property Acquisition 433

Total 3,000

Project financing plan operates by capturing the incremental revenues from new developments, made possible by the HY rezonings, to cover debt service on HY Project bonds issued by HYIC

$3.0bn of Hudson Yards Project bonds have been sold, making the project fully funded

$1.0bn of Hudson Yards bonds were sold in October 2011. The bonds were rated “A” by S&P and Fitch, and “A2” by Moody’s

$2.0bn of Hudson Yards bonds were sold in December 2006, with similar ratings

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Property Tax Equivalency Payments

Hudson Yards IDA PILOT Payments

DIB and ERY TDR Payments

HYIC

• No. 7 Subway Extension

• Parks and Streets

• $200 mm to MTA re: ERY

• HYDC Operating Expenses

Interest Payments by City if HYIC

Revenues Insufficient

Debt Service

Bond Proceeds

Bondholders

The HY Financing Structure

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COMMERCIAL DEVELOPMENT RESIDENTIAL DEVELOPMENT

INCLUSIONARYHOUSING BONUSDISTRICT IMPROVEMENT

FUND BONUS (DIB)

BASE (AS-OF-RIGHT)

DEVELOPMENT

EASTERN RAILYARDTRANSFER (ERY TDRs)

DIB

BASE (AS-OF-RIGHT)

DEVELOPMENT

A

B

West 36th S

treet

DIB (Pari Passu)

Mid-Block Blvd. &

Park

Increasing Density and Creating Non-Recurring Revenue Sources:

DIB and ERY TDRs

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ERY TDRs Generating Site

ERY TDRs Receiving Sites

DIB Available

34th Street

Eig

hth

Ave

nu

e

Ten

th A

ven

ue

42nd Street

ERY TDRs

ERY

Increasing Density and Creating Non-Recurring Revenue Sources: ERY TDRs

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34th St.

42nd St.

8th

Ave.

10th

Ave.

Zone 3

HY UTEP AreaZone 2

Zone 1No Discount*

25% Discount for 15 years,

or the benefit available in Zone 3, whichever is less,

then 4 year phase-out

Illustration of Percentage Discount to Actual Taxes Available for Office Buildings in Hudson Yards UTEP Area

1st 5 million sf 40% Discount,

2nd 5 million sf 25% Discount,

3rd 5 million sf 20% Discount,

4th 5 million sf 15% Discount,

all for 15 years, then 4 year phase-out

* Program provides fixed 3 percent annual payment increase for 15 years

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Incentivizing Development

New office development will receive property tax abatements according to Uniform Tax Exemption Policy adopted by NYC IDA


Forecasting Future Development

As a result of the 2005/2009 rezonings, Hudson Yards district can now accommodate:

25 msf of new office development

20,000 units of new housing

2 msf of new retail

3 msf of new hotel

Developers have invested approximately $7.0B to build 9.1 msf of new office, residential and hotel development in Hudson Yards since the 2005 rezoning

More than 6,000 apartments, including 1,600 affordable units, and more than 3,200 hotel rooms have been built

Market rate residential rents are reportedly in the mid-$60s to mid-$80s

$90M of DIB has been sold since 2005

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MiMA, 440 West 42nd Street (Related Companies)

Yotel, 570 Tenth Avenue

Silver Towers, 600 West 42nd Street(Silverstein Properties)


Brookfield’s “Manhattan West”

January 2013 groundbreaking for Brookfield’s “Manhattan West” was held on the Ninth Avenue site (between West 31st and West 33rd Streets)

Mixed-use development will include more than 5.0 msf of office, commercial, and residential uses

$680M platform under construction using bridge technology (see image below)

450 West 33rd Street (pictured lower right) will be retrofitted as part of the project

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Related/Oxford’s “Hudson Yards”

The Related Companies and Oxford Properties have partnered to develop the 26-acre MTA Rail Yard sites (aka “Hudson Yards”)

Mixed-use development will include more than 13.0 msf of office, hotel, retail, and residential uses and 10+ acres of public open space

Two phases of development Phase I – Eastern Rail Yard: From 10th to 11th Avenue between West 30th and West

33rd Streets Phase II – Western Rail Yard: From 11th to 12th Avenue between West 30th and West

33rd Streets

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Residential Projects in the 2013 Pipeline

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Address Developer # of Units

605 West 42nd Street Moinian Group 1,194

West 31st Street (between Ninth and 10th Avenues)

Brookfield Office Properties 850

10th Avenue at West 41st Street Extell Development Company 600

509 West 38th Street Iliad Realty 250

West 36th Street (between 10th and 11th Avenues)

Lalezarian Developers 200

West 37th Street (between 10th and 11th Avenues)

Chetrit Group TBD (also includes a hotel)

Total 3,094


Hudson Yards: 2013/2014

The new 34th Street and 11th Avenue Station will accommodate up to 30,000 peak-hour riders when Hudson Yards is fully developed

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Hudson Yards: 2013/2014

Hudson Park and Boulevard – Looking north from West 34th Street

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The Hudson Yards Project June 18, 2013. HUDSON YARDS DEVELOPMENT CORPORATION Hudson Yards Project...

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