Goldman Sachs Real Estate Principal Investments has been given another year to finalise a $1 billion joint venture deal to develop 26-acres of prime New York real estate – because of the economic downturn.
The real estate arm of Goldman Sachs and New York developer, The Related Companies, had been expected to sign final contracts committing themselves to the project at the end of January.
However New York’s Metropolitan Transportation Authority (MTA) said the deadline to finalise contracts for the redevelopment of the Hudson Yards rail site had been extended for up to a year, due to “the economic downturn and collapse of traditional commercial lending”.
Goldman and Related were still committed to the project for apartments and office space, the MTA said in a statement.
Stephen Ross, chairman and chief executive officer of Related Companies, said: “The agreement creates the flexibility needed in light of current market conditions, while ensuring that we can continue to collectively move forward with the necessary planning approvals and pre-construction logistics.”
Hudson Yards is considered the largest undeveloped plot of land in Manhattan. It sits on top of an active rail yard on New York City’s west side bounded by West 42nd and 43rd Streets, 7th and 8th Avenues, West 28th and 30th Streets, and Hudson River Park.
Goldman and Related agreed to pay the MTA, which owns the rail site, $1 billion for a 99-year lease for the air rights to the land. There are plans to construct 13 buildings on the site, including offices, apartments, hotels, shops, parking space and public spaces. The building space would total 12 million square feet – one million more than for the planned World Trade Center replacement.
Goldman and Related stepped in to take over the planned project after Tishman Speyer withdrew in May 2008.