NEW YORK—Revenues collected from the Hudson Yards developments fell $113 million short of expectations through 2012, according to a fiscal brief released by the Independent Budget Office (IBO) of New York.
As a result, the city is footing the bill, having paid $374 million through 2012. Of that sum, $156 million are a prepayment for the 2013 and part 2014 fiscal years.
“The developments have not occurred as fast as they originally projected in 2006,” said George Sweeting, deputy director of the IBO.
In 2006, Cushman and Wakefield estimated the revenues to be $283 million through 2012, but the actual revenues collected were $170 million.
In order to spur development in the Hudson Yards area, the Bloomberg administration agreed to finance nearly 100 percent of the cost of the 7 train extension to the Far West Side. The city set up the Hudson Yards Infrastructure Corporation (HYIC) to finance the project. The HYIC issued $3 billion in bonds backed by revenue expected from the developments in the Hudson Yards district.
When revenues from these developments fell short of expectations, the HYIC could not make the interest payments on the bonds it issued, so city funds were used to cover the difference.
The HYIC spent $2 billion on project related expenses through 2012, with $1.6 billion spent on the extension of the 7 subway line. The 7 train extension is expected to cost $2.4 billion when completed.
First Tenants
The Hudson Yards’ developers, Related Companies and Oxford Property, announced the project’s first major tenants on Apr. 10.
Luxury retailer Coach, beauty company L'Oreal USA and the software company SAP will occupy the first tower going up over the railroad storage yard on the Far West Side.
Oxford and Related said they’ve completed the financing for the 47-story tower at the northwest corner of 30th Street and 10th Avenue.
The IBO expects revenues from this tower to begin coming in 2017 or 2018.
The Associated Press contributed to this report.
