Me tr opolitan T r anspor tation Author ity Hudson Yar ds T OD Robe rt Pa le y MT A: Pho to g ra phe r Pa t Ca she n Aug 2014 Dire c tor, T ra nsit- Orie nte d De ve lopme nt, MT A Ma rc h 22, 2018
Hudson Ya rds Ba c kg round: L IRR Stora g e Ya rd Construc te d 1987 in Ma nha tta n’s Industria l We st Side 1989: MT A Ma ste r Pla n propose d 1987: 26 Ac re Ya rd L IRR ope ns. T ra c ks e xte nding midtown de nsitie s we st a re be low 10th a nd 11th Ave nue s a nd to mone tize L IRR Ya rd a ir rig hts. spa c e d to a llow c olumns to support future de ve lopme nt. 2
Hudson Ya rds Distric t: Ne w York City c re a te d c ompre he nsive ne ig hborhood pla n a nd fina nc e d the #7 subwa y line 1990- 2005: T ra nsforma tion of industria l we st side : City br oade ne d pe r spe c tive far • be yond MT A site City highlighte d r e lationship • be twe e n tr anspor tation inve stme nt and e c onomic de ve lopme nt Collabor ation among City and • MT A staff be gan e ar ly in land use planning pr oc e ss Compr e he nsive land use and • tr ansit plan F inanc e str ate gie s base d on • munic ipal powe r s Sourc e : HYDC 3
Hudson Ya rds Distric t: City Goa ls a nd Outc ome s City Goa ls Re zoning to e xpand Manhattan busine ss distr ic t • Pr ovide tr ansit by e xte nding subway • F ast imple me ntation to me e t Olympic bid • de adline Outc ome s NYC c r e ate d financ ing me c hanism in zoning • and thr ough its industr ial de ve lopme nt age nc y E xte nsion City r aise d $3.2 billion for subway and othe r • infr astr uc tur e inc luding par ks Subway e xte nsion ope ne d 2015 • 7 line e xte nsion to 34 th St and11 th Ave 4
Re ve nue sourc e s for 7 line e xte nsion One T ime Re c ur r ing De ve lopme nt Re late d Pr ope r ty T ax Re ve nue s Re ve nue s • T ax : Payme nts in L ie u of • T ax: Payme nts in L ie u of T axe s (PIL OT s) ge ne r ate d Mor tgage Re c or ding T ax by c omme r c ial pr ope r ty (PIL OMRT s) • T ax: E quivale nc y • Zoning : Distr ic t Payme nts (T E Ps) r e lating Impr ove me nt F und Bonus mainly to ne w r e side ntial (DIB) Payme nts de ve lopme nt • Zoning: Sale of E aste r n Rail Yar d T r ansfe r able De ve lopme nt Rights (E RY T DRs) 5
Re ve nue g e ne ra te d throug h zoning Re ve nue Me c ha nisms 42 nd St. Distr ic t Impr ove me nt Bonus (DIB) available on the se site s E RY T DRs E RY T DRs 34 th St. Ge ne r ating Site E RY T DRs Re c e iving Site s 8 th Ave . 10 th Ave . F oc us de ve lopme nt ne a r tra nsit • Cre a te a re ve nue sourc e • 6
Illustra tion of zoning bonus me c ha nisms T r ansfe r o f De ve lo pme nt Rights (“T DRs”) Comme rc ia l Offic e T owe r c a n purc ha se from two zoning funds: Distr ic t Impr o ve me nt 1) Distric t Improve me nt F und F und Bo nus (DIB) Bonus (DIB) 2)T ra nsfe r of De ve lopme nt Rig hts Base (As-Of- (T DR) from MT A e a ste rn ra il ya rds Right) De ve lo pme nt A Sourc e : HYDC 7
Re ve nue g e ne ra te d throug h re a l e sta te ta x pla n with ta xe s ple dg e d to bond re pa yme nt So urc e : HYDC T ax e xe mption polic y pr ovide s e ar ly inve stor s gr e ate r be ne fit 8
Hudson Ya rds Distric t: MT A L IRR De ve lopme nt Site MT A Goa ls a nd Outc ome s 2007 De ve lopme nt RF Ps • balanc e d r e al e state goals with ope r ational ne e ds of safe ty and r e liability 2008 De ve lope r (T he Re late d • Companie s and Oxfor d) jointly se le c te d by MT A and City 2013 Gr ound L e ase e xe c ute d • and c onstr uc tion star te d 2016 $1 billion bond sale • bac ke d by r ail yar d r e al e state r e ve nue s Platfor m c onstr uc tion ove r yar d “thr oat” r e quir e d c lose c oor dination be twe e n de ve lope r and L IRR ope r ating pe r sonne l. 9
T ota l MT A re ve nue s will e xc e e d $1.6 billion Gr ound r e nt payme nts guar ante e d • $720 million str uc tur al platfor m financ e d by de ve lope r • Payme nt in L ie u of c onstr uc tion mate r ials sale s tax • MT A r e c e ive s payme nts for off- site air r ight sale s • 18 million sq ft total de ve lopme nt. E aste r n Yar d pr imar ily c omme r c ial. Major te nants: Coac h, L ’Or e al USA, SAP, T ime War ne r , Boston Consulting will be 2 nd talle st T ime War ne r Gr oup, We lls F ar go Se c ur itie s offic e in NYC at 1,296 fe e t 10
F a c tors for suc c e ss in 7 line fina nc ing Close c oor dination of land use planning and tr anspor tation planning T r ansit was a c e ntr al c onc e r n of City Coor dinate d e nvir onme ntal r e vie w Str ong mar ke t pote ntial Many unde r built site s due to e xisting obsole te industr ial zoning whic h pr e ve nte d de ve lopme nt Pr oximity to CBD and to wate r fr ont c r e ating oppor tunity for both offic e and r e side ntial use s City assume d financ ial r isk Bac kstop antic ipate d for unc e r tain timing of c ash flows Suppor t base d on c le ar r e lationship be twe e n de ve lopme nt and tr ansit impr ove me nts 11
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