Hudson Yards rendering
Just yesterday, the city hailed the completion of the platform built over the west side rail yards that will support the Brookfield West development, a major component of Hudson Yards, the 26-acre development rising on the far west side. And while Brookfield will boast a two-acre park plaza, two 60-plus-story high rises and other public commercial space, it’s important to note that $7 million was spent just on designing and producing a special machine called “The Launcher” to lift the 56,000-ton concrete slabs to build the platform.
This is just one of many substantial costs in the mammoth Hudson Yards project, for which the city will have paid nearly $650 million in subsides by the end of this fiscal year, money that, over the past ten years, has come straight from the pockets of taxpayers. And that’s not all; according to a review by the city’s Independent Budget Office, even more will be needed through 2019 to complete the “next great commercial district.”
When the City Council approved the Related Companies’ Hudson Yards project in 2005, they gave Bloomberg the go ahead to issue $3 billion in bonds through the new Hudson Yards Infrastructure Corporation, which was mainly to finance the extension of the 7 subway line. By having the train reach 34th Street and Eleventh Avenue, the city was confident that commercial and residential development in the area would increase, thereby generating enough tax money and fees to repay the bond. But there was a catch. According to the Daily News, “In the unlikely event that development was slower than expected, the city promised to pay any debt service shortfall on the bonds, and if the subway project went over budget, the city would pick up any extra costs.”
The Bloomberg administration predicted that in a worst-case scenario the city would have to pay $205 million in debt service subsidy, but with revenue significantly lower than expected, they’ve already shelled out $439 million for shortfalls in debt service on the bonds. An additional $210 million went to cost overruns for infrastructure that wasn’t addressed when the project commenced, including $75 million earmarked by Bloomberg for the Culture Shed, Hudson Yards’ planned performance and entertainment facility.
But for Mayor de Blasio’s Economic Development Corporation, none of this seems to be an issue. Their response? “Hudson Yards will unlock the potential of an enormous, underutilized area to provide thousands of new jobs and tens of thousands of housing opportunities for New York City’s growing population.”
[Via NY Daily News]