M.T.A. and Developer Agree to Delay $1 Billion Railyard Deal

Last year, the Metropolitan Transportation Authority struck a deal to sell the development rights for a 26-acre complex of office towers and apartment buildings on the West Side of Manhattan for $1 billion, much needed revenue for new trains, track repairs and the expansion of the public transit system. But with a severely ailing economy and a lack of financing for real estate projects, the... [more]

Last year, the Metropolitan Transportation Authority struck a deal to sell the development rights for a 26-acre complex of office towers and apartment buildings on the West Side of Manhattan for $1 billion, much needed revenue for new trains, track repairs and the expansion of the public transit system. But with a severely ailing economy and a lack of financing for real estate projects, the developer, the Related Companies, have reached an agreement with the transportation authority to delay closing on the project for a year. As a result, Related will not have to make a $43.5 million down payment immediately, although the company will have to pay a nonrefundable $10 million for the delay, according to two executives who have been briefed on the agreement. http://www.nytimes.com/2009/02/03/nyregion/03yards.html?ref=nyregion Background: when the first deal fell through after Tishman Speyer dropped out, I said it was an ominous sign for NY real estate. The late, great spunky came back and heralded the Related deal. I said wait to see if it closes.... Search the record. 50% drop in property prices from peak to trough. [less]