Thursday, May 27, 2010

MTA deal secures $1 billion in capital funds

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New York’s Metropolitan Transportation Authority Wednesday locked in roughly $1 billion in capital funding by signing an oft-delayed contract with Related Companies, joined by Oxford Properties Group, to develop the MTA’s Hudson Yards on Manhattan’s West Side.

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Related and Oxford are making a $21.75 million deposit in conjunction with the signing of the contract, and are expected to make additional deposits of roughly $11 million each, subject to specified fluctuations in economic conditions. Critics of the deal have said MTA should be more stringent in its expectations for payment.

The site, west of Pennsylvania Station, is among the lastremaining underdeveloped parcels of land in Manhattan, would be developed to include 12 million square feet of commercial and residential space. MTA will lease the site to the developers for 99 years, with purchase options. Construction will occur over ongoing rail operations, which include MTA Long Island Rail Road’s West Side Yard and Amtrak’s Northeast Corridor.

“This is a tremendously exciting development project that together with the extension of the 7 line [subway] will turn this area into a vibrant residential and commercial neighborhood,” said MTA Chairman and CEO Jay H. Walder. “We were also able to maximize value for the MTA and provide a new revenue stream to support many of our vital capital projects.”

Jay Cross, president of Related Hudson Yards, said, “Related and our new partner Oxford Properties Group look forward to continuing the excellent working relationship we have developed with the MTA and LIRR over the last two years as we all work to transform the Yards into New York’s new 21st century neighborhood.”