Negotiations between the MTA and Tishman Speyer have collapsed, according to the MTA, following a request from the developer to change the terms under which the project would be financed, as well as the project schedule. An agreement on the 26-acre site could not be reached.
Tishman Speyer was selected to develop the rail yards last month, after an eight-month bid process. Theirs was the high bid, at $1.004 billion, beating out the only other major contender, a joint partnership between Durst and Vornado.
Tishman Speyer was reportedly apprehensive about closing on the Eastern Rail Yards before the Western Rail Yards were rezoned, a process requiring public review and City approval on several levels. A rezoning is necessary for the developer to complete its massive high-density residential and commercial plan, and adds another variable to a project already troubled with the recent loss of an anchor tenant and an exceedingly complex financing plan.
A spokesman for Tishman Speyer insisted that the developer would continue to negotiate with the MTA to see if the differences could be worked out. A meeting is set for Monday, but the MTA is reportedly considering reopening negotiations with at least one of the four other developers who originally submitted bids.