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October 9, 2007

About those Hudson Yards bids, and the Vanderbilt Yard flashback

Atlantic Yards Report

Anticipation over the deadline to submit bids for the development rights for the Metropolitan Transportation Authority's (MTA) Hudson Railyards in Manhattan has sparked a moment of reflection amongst Atlantic Yards watchdogs.

From Crain's New York Business:

About the only certainty as developers put the finishing touches on bids for the Hudson Rail Yards is that the offer, due Oct. 11, will top the $500 million that the city was willing to pay when it wanted to put a football stadium there. ...An appraisal commissioned last year by the MTA valued the yards at $2.74 billion. The agency plans another appraisal to account for current market conditions, but hasn't scheduled it yet.

Remember, the MTA's appraiser valued the Vanderbilt Yard in Brooklyn at $214.5 million. Some 18 months after Forest City Ratner was endorsed by the city and state political establishment to get the site, the MTA put it out for bids. Forest City bid $50 million in cash; the only other bidder, Extell Development Co., bid $150 million.

The MTA decided to negotiate exclusively with Forest City Ratner, which upped the cash component to $100 million. FCR argues that the total package should be analyzed; it valued the bid at $329.4 million dollars outside of the cash component.

(In the lawsuit challenging eminent domain, the complaint states that the MTA refused to answer technical questions from Extell; it's unclear whether that developer was able to present a complete package regarding railyard improvements. Perhaps we'll hear about that in the oral argument today.)

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NoLandGrab: The record clearly illustrates that the MTA knows how to safeguard the public interest by maximizing the value of its real estate assets. The contrast between the disposition of the Hudson Yards and the Vanderbilt Yards in Brooklyn speaks for itself.

It would be interesting to find out how much developer Bruce Ratner paid for the development rights for the Atlantic Terminal Mall.

Posted by lumi at October 9, 2007 8:10 AM