At the last minute, Related Companies goes with plan…C?
Developers understandably do not want to publicly share their alternative plans for a site while trying to get public approvals for their preferred design.
When it comes to plans for one of the three casino licenses up for grabs, some insist there is no alternative. Steve Cohen’s Point 72 Asset Management has maintained that the parking lot next to Citi Field will stay a parking lot if it doesn’t secure a casino license.
On Monday, Related and Wynn Resorts announced that they would no longer apply for one of the casino licenses. They will build a hotel and office tower instead, along with up to 4,000 housing units.
Previously, Related said that a casino was needed to construct a $2 billion platform over train tracks in the Western Yards, that housing alone simply couldn’t pay for it. Early on, the developer did lay out an alternative vision that could be built if it wasn’t granted one of the three state casino licenses, which called for 1,816 housing units, as well as hotel and office space.
But Related maintained that either way, it needed to amend a 2009 rezoning of the yards to be less condo-centric. Without changes to the previous plan, nothing would be built, Related CEO Jeff Blau said at a City Council hearing in April.
“At the moment, the Western Railroad Yards is not financially viable, so nothing would proceed,” he said.
It wasn’t until last month that Related put forward a plan to pay for the platform over the railyard, using surplus payments in lieu of taxes, both current and future. You would think this idea would have been on the table from the beginning, because Related used PILOTs to pay for infrastructure in the Eastern Yards. This was not an idea that came out of nowhere.
But according to Related, it hadn’t seen the need for it. During that April hearing, Blau said the company turned to this arrangement as a way to increase the amount of housing planned for the site, up to 4,000 units, in response to community concerns. The extra housing would replace an office building planned for the platform. The thinking was: without the revenue from that commercial property, another financial mechanism needed to be in place.
The promise of additional housing could have made Related’s casino proposal more appealing to the state board deciding who gets the coveted three licenses, but the developer also needed to first win over at least two-thirds of a six-member community advisory committee. At least three of the committee members indicated that they wouldn’t support a casino, including Council member Erik Bottcher.
Related dropped the casino plan to secure Bottcher’s approval for the rezoning. The Council member said he would not support a casino and that the project needed to include more housing, akin to the 5,800 units (including condos) pitched in the 2009 plan. The developer also agreed to increase the project’s amount of greenspace and downsized the podiums planned to go over the railyards in response to concerns raised by the Friends of the High Line.
Related billed the new plan as an historic agreement with Bottcher, but Wynn was saltier about the situation.
The casino operator blamed the city’s land use process, saying it was a waste of money.
“The recent rezoning process has made it clear to us that there are uses for our capital more accretive to our shareholders,” the company said.
What we’re thinking about: With Related out, who has the best chance of securing the casino licenses? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: ICYMI, the city has finally released its request for proposals seeking to hire five new commercial brokerages to represent it in office leases and acquisitions. Some of the language in the RFP seems to be a response to the controversy over Diana Boutross’ work on Cushman & Wakefield’s account with the city.
Elsewhere in New York…
— On Saturday, a Mexican navy ship struck the Brooklyn Bridge, killing two sailors and injuring at least 22 others. The National Transportation Safety Board told Gothamist that the crash did not cause significant structural damage to the bridge.
— Assembly member and mayoral candidate Zohran Mamdani is urging supporters to donate to City Council Speaker Adrienne Adam’s mayoral campaign to help her qualify for matching funds, amNY reports. In a video posted on social media, Mamdani explained that helping Adams would be in service of supporting and ranking candidates who are not Andrew Cuomo. “Now you might be asking, ‘I’m running for mayor, she’s running for mayor, why would I be asking you to donate to her?’ Because we are all running together to defeat Andrew Cuomo,” he said in the video.
— Speaking of Andrew Cuomo, as of Monday, his super PAC has raised more than $8.7 million. Bruce Ratner, who gave $36,000 this month, is one of the PAC’s latest real estate donors.
Closing Time
Residential: The priciest residential sale Monday was $7.5 million for a condominium unit at 101 Warren Street. The Tribeca condo is 2,900 square feet and last sold as a new construction unit in 2008 for about half the price at $3.8 million.
Commercial: The most expensive commercial closing of the day was $3.3 million for 94-33 Corona Avenue. The low-rise Elmhurst commercial building is 10,200 square feet and has two stories.
New to the Market: The highest price for a residential property hitting the market was $17.5 million for a penthouse unit at 151 East 58th Street. The Midtown East condo in One Beacon Court is 3,800 square feet. Brown Harris Stevens’ Martha Kramer has the listing.
Breaking Ground: The largest new building application filed was for a 71,622-square-foot, 15-story residential building at 23 Mount Hope Place in the Bronx. The applicant of record is Nikolai Katz of Nikolai Katz Architect.
— Joseph Jungermann
