It’s Official: MTA/Tishman Speyer Talks are Dead

After a last-ditch effort to get their West Side Rail Yards negotiations back on track after Thursday’s announcement, Tishman Speyer was unable to sway the MTA.

The MTA’s statement today was short and sweet. In its entirety:

The MTA met today with Tishman Speyer. Despite the best efforts of both sides, a final agreement could not be reached. The MTA has now re-entered discussions with other interested developers and remains committed to timely development of these unique and valuable parcels of land on Manhattan’s Far West Side.

It’s widely believed that the most likely developer right now is the partnership of the Durst Organization and Vornado Realty Trust.

Hudson Yards Talks Fail Yet Again [Crain's]

From Rinses to Retail, Chelsea Car Wash Makes its Exit

[The Chelsea Car Wash at West 14th Street & 10th Avenue, before the sign was taken down.]

As many Chelsea dwellers, West Side Highway & Hudson River Park commuters, taxi drivers, and car wash enthusiasts may have noticed, the distinctive red Chelsea Car Wash sign has disappeared. It was removed from where it was attached to the High Line about a month ago with little fanfare.

In the coming months, the Car Wash– one of the characteristic staples of the working West Side–will close its garage doors to make way for a new retail location on the corner of West 14th Street and 10th Avenue.

[Design and renderings by Richard Lanka & Associates, for a new retail location, developed by the Milk Group with Robert K. Futterman.]

There’s currently no tenant booked, but in the next year or so, the Milk Group (as in Milk Studios, next door), aims to find a design, fashion, or other retail tenant for this 40,000-square-foot space directly underneath the High Line. Renderings from their sales office show wrap-around windows in Car Wash-like glass. There’s also apparently a subterranean level for more retail.

More design renderings, and facts about the neighborhood– from the sales brochure–after the jump.

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Anchors Away: Morgan Stanley Pulls Out of Tishman’s Bid

The Times reports today that financial giant Morgan Stanley has backed away from its deal with Rail Yards bidder Tishman Speyer (bid here).

Tishman is one of four remaining bidders for the site, (Brookfield Properties dropped out last week) and, until today, was one of three with an anchor tenant.

Related has secured Newscorp and Durst-Vornado is working with Conde Nast on their bid. Extell is the remaining bidder with no major tenant backing going into the bidding process. While Tishman is not out of the race officially, MTA execs have made their preference for bids with anchor tenants known.

Morgan Stanley’s retreat is yet another sign of the increasing trepidation among would-be investors in this mega-site. Given the uncertain future of the real estate market, it’s no surprise that bidders are hesitant about this enormous investment. According to the Times,

The winning bidder will have to put up $20 million immediately and complete a final contract within four months, when it must make a $100 million down payment. The transportation authority expects that it will take 18 months after that to prepare the property for construction, and two to three years and about $1.5 billion to build platforms and foundations over the railyards.

The MTA maintains that a bidder will be chosen by the middle of March.

Morgan Stanley Retreating From Railyards Development  [New York Times]

BREAKING: Brookfield Not Submitting a New Bid

Brookfield Properties has announced they have not submitted a second bid for the Rail Yards site. Supplementary bids were due yesterday.

Back in January, the MTA asked the five developers to submit supplementary materials supporting their ability to lease, not buy, the 26-acre site. None of this financial information was made public.

Brookfield’s decision not to submit new materials knocks them out of the running for lead developer of the site, but according to a source, they still may be considered as partners in the development. Brookfield recently announced another large-scale development on Ninth Avenue, only a few blocks from the Rail Yards.

There was coverage today in the Times and the Observer.

Better Know a Developer: Extell Development Company

Extell_Rail_Yards_Rendering

Welcome to the second in our series of posts running down the track records of the various companies competing for the opportunity to build lots and lots of buildings over the West Side Rail Yards. Today we focus on Extell, whose Steven Holl-designed plan (above, and here) has probably received the most architectural critical praise.

Extell, formerly Intell Management and Investment Co., has been an NYC real estate player since 1994, although their profile has heightened considerably in the last few years, especially since their name change in 2005. They are steered by CEO Gary Barnett, a former diamond merchant.

The company notably attempted to play the spoiler during the bid process for Atlantic Yards redevelopment in Brooklyn, submitting a proposal that — unlike competitor Forest City Ratner’s controversial, ultimately adopted plan — would not have required the usage of eminent domain, or have included a stadium for the NBA’s Nets. The Real Deal offers a pretty good rundown on the company here.

After the jump, we have a summary of some of Extell’s more notable projects and properties, with pretty illustrations to boot.

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News Roundup February 1-7

The January 28 MTA letter to developers generated a bunch of speculation on what the new guidelines will mean for developers, and it’s been a busy week for the various other developments around the Yards.

And in developer news,

Crain’s has more on the MTA’s Strings Attached

Crain’s has the latest on an increasingly complicated set of requirements for developers, as outlined by the MTA in their January 28 letter.

According to the article by Theresa Agovino, the winning developer will be contractually obligated to create a set of seperate funds that will go to the MTA for Rail Yards expenses and earmarks for other MTA projects (including a $9.2 million fund to improve the MTA’s LIRR facility near Shea Stadium).

None of these expenses would be paid back if the deal should fall through. Given the uncertain economic climate and fear of a national recession, it looks like the MTA is raising the bar to safeguard the site against developers pulling out later. Essentially, the agency is transferring risk onto the developers.

The MTA will also require developers to front “transaction payments” to back any condo sale or other transaction on the site once it’s built out. The tricky part is, the MTA doesn’t specify a set amount for these payments– bidders have to come up with their own maximum figure.

Full text after the jump.

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Better Know a Developer: Tishman Speyer

2007_11_tishman21.jpg

Over the next few weeks, we’ll be providing you with some quick-hit style background information on the various developers who have submitted bids for the West Side Yards site. Today, we’re starting with Tishman Speyer, whose bid is pictured above.

Founded in 1978 in New York, Tishman Speyer (“TS”) has managed 77 million square feet of real estate assets since its inception. In the last three years, the company has been involved in three of the largest real-estate deals in American history. TS is traded publicly and has around 1100 employees in 25 offices worldwide. They recently spearheaded (along with Lehman Brothers), a takeover of Archstone, which was at the time the third largest Real Estate Investment Trust (REIT) in the country.

After the jump, check out the details of some of Tishman Speyer’s notable developments and properties.

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MTA Pushing Developers to Lease the Rail Yards

According to Crain’s,  it now looks as if the MTA would prefer to lease the Rail Yards site to developers for 99 years, rather than sell it.   

A source at one developer said the MTA was caving in to public pressure not to sell the property, which includes active MTA rail operations. But the MTA spokesman says that under a 99-year lease agreement the developer would still control the site.

 In this plan, the MTA would also recieve a portion of the profits from individual building leases, but the agency has not made any numbers public.

On Monday, the MTA sent a 60-page financial questionnaire to the five developers, so it could compare the proposals. The document outlined the MTA’s ideal financial structure, and the developers now have three weeks to respond with additional information, or alter their proposals in response. The MTA has acknowledged that it will still consider proposals to buy the site, though its preference is to lease.

The agency hopes to possibly narrow down the field once the questionnaires are returned, and have a developer selected by the end of March.

 MTA Prefers Leasing Hudson Yards (Crain’s)

Crain’s Video: Rail Yards Developers at REBNY Gala

crainsvideo.jpg

Crain’s caught up with four of the five Rail Yards developers at the 112th annual Real Estate Board of New York (REBNY) gala.

Ric Clark from Brookfield, Stephen Ross from Related, Douglas Durst from Durst/Vornado, and Jerry Speyer from Tishman Speyer all make the case for why their development plan was the best.

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