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Q&A
Financial viability of the 2009 Western Rail Yards plan
0:42:34
·
174 sec
Council Member Bottcher questions Jeff Blau about when and why Related Companies determined that the 2009 Western Rail Yards plan was no longer financially viable. Blau explains that over the last five years, due to post-COVID economic factors and increased construction costs, they realized the plan wouldn't work financially.
- The cost of the platform increased to over $2 billion
- Construction costs for vertical buildings also increased dramatically
- There's approximately a $3 billion shortfall between the revenue the 2009 plan would generate and the cost to build the platform
Erik D. Bottcher
0:42:34
Thank you, chair Reilly.
0:42:35
I wanna focus on the the 02/2009 plan for a minute.
0:42:40
When did you reach the determination that the 02/2009 plan was not going to pencil out, that that zoning wouldn't support the construction of a platform?
0:43:29
And when you when you reached that determination, did you notify the elected officials, the community board, ask to meet with us to discuss the situation?
0:44:06
I wish we had had that meeting years ago.
0:44:12
The 02/2009 plan, there's a delta between how much revenue that would generate and how much is needed to construct the platform and make it what's that like dollar amount?
0:44:36
So the 02/2009 plan doesn't pencil out.
0:44:38
When you, on a sheet of paper, you pencil, here's how much revenue the housing alone would generate and here's how much it would cost to build the platform.
0:44:53
What's the what's the delta there?
0:44:54
How much would the the housing bring in and how much would it cost to build that platform?
0:45:18
What's the number, the delta there?
0:45:22
How much how short does it fall?
0:45:25
Is it like
Jeff Blau
0:42:59
I'd say over the last five years, post COVID, post run up of interest rates and all the inflationary impacts that have hit the construction industry.
0:43:09
And we recognize that the costs of the platform have increased to over $2,000,000,000 And obviously the cost of construction of vertical buildings has also increased dramatically.
0:43:19
So if you're the the decision was totally independent of the gaming licenses being proposed by the state.
0:43:45
Well, as you know, we've met with over a hundred community groups in this process, including a meeting with the community board.
0:43:52
And thankfully you were in attendance there where we did walk through the economics and the viability of the old plan versus the new plan.
0:44:01
So yes, we did do that.
0:44:03
Right.
0:44:33
I'm sorry, could you just restate it again?
0:45:03
I would say just in general, the housing proposed, the 4,000 units are not able to pay for, absorb the cost of the heavy infrastructure to be built over the platform.
0:45:15
And that's what this plan solves for today.
0:45:26
It's it's probably over $3,000,000,000.