Your guide to NYC's public proceedings.
Q&A
New PILOT financing mechanism for the Western Rail Yards project
0:45:28
·
5 min
Council Member Bottcher asks Jeff Blau to explain the new Payment in Lieu of Taxes (PILOT) financing mechanism proposed for the Western Rail Yards project. Blau describes how this mechanism would work and why it was introduced.
- The PILOT would use taxes from commercial uses to offset infrastructure costs for building the platform
- This is similar to the financing used for the Eastern Rail Yards and Hudson Yards Development Corporation
- The PILOT was introduced in response to community desires for more housing units
- Implementing the PILOT would require extending the boundaries of the existing Hudson Yards District through City Council legislation
Erik D. Bottcher
0:45:28
So there's like a $3,000,000,000 shortfall with the platform.
0:45:37
You explain to the public the mechanism that you've come up with in the last few weeks to be able to add housing to the site.
0:45:53
You you touched on it but can you help the the public understand it better because few weeks ago throughout the process, you were saying that this couldn't happen without a gaming license.
0:46:07
The gaming license is what would make this financially viable.
0:46:13
And now you're proposing this payment in lieu of taxes, this pilot that you say will allow most of the housing to get built on this site.
0:46:28
Explain what that pilot is and how it would work.
0:47:40
So in the Eastern Rail Yards, there was a payment in lieu of taxes where the tax revenue from the commercial buildings was used to finance the seven train, the decking over the Eastern Rail Yards, and that's what you wanna do on the Western Rail Yards as well.
0:48:25
Seems so obvious and so clear.
0:48:28
Why was this not part of your original proposal?
0:48:32
Why was this just added recently as a financing option?
0:49:27
And what it would entail to use this pilot, you'd basically be extending the boundaries of the pilot for the Eastern Rail Yards to include the Western Rail Yards.
0:49:42
Is that right?
0:49:53
And that would require city council legislation.
0:49:58
What other requirements would that involve?
0:50:09
Any state action?
0:50:22
a if extending that pilot district to the Western Rail Yards, if it would enable this plan to finance housing, why not use that pilot with the 02/2009 zoning to help that original plan get constructed?
Jeff Blau
0:46:33
Right.
0:46:34
So just to be clear, this zoning change is totally independent of the gaming license and is not dependent upon a gaming license here.
0:46:42
So whether it's a gaming resort or a commercial building on the northern end of the site, it is the taxes from those commercial uses, either one, that would be used to essentially offset the infrastructure costs that would be built to build the platform over the rail yards.
0:47:02
This is a tried and true program that was done with Hudson Yards Development Corporation, HYDC, where the future real estate taxes of the Hudson Yards building buildings were bonded and utilized to build the seven train and the park above the seven train.
0:47:20
So in fact, this is really just further extension of the HYDC district.
0:47:26
It is not a new mechanism at all.
0:47:28
So same same structure, same process, and same utilization, except in this case, it's for infrastructure over the rail yards as opposed to the number seven subway.
0:48:02
Yes.
0:48:04
Except on the East, it did not it did not pay for the deck.
0:48:07
It just was the seven train and then the park on top of the seven train extension going north from Hudson Yards.
0:48:14
But, basically, it's the same exact legislation that is currently in place.
0:48:18
The district of that legislation is proposed to be extended in as part of this.
0:48:36
So we had a commercial use on the southern end of this site, which because of the use there and the demand for commercial office space, that building could pay its share of the cost of the infrastructure to build the platform.
0:48:54
In meeting with you and community leaders and the community board, we recognize the real desire by the elected officials and the community to increase the unit count of housing.
0:49:09
And so when we took away that commercial office building, we had to utilize a different mechanism to replace the capital that would have come from that building to pay for the infrastructure that the housing couldn't otherwise pay for.
0:49:23
So it was really in response to the community desires.
0:49:43
Yes.
0:49:44
The current boundary is actually broader than the Eastern Rail Yards.
0:49:47
It's it's a whole district, the Hudson Yards District.
0:49:50
So that district would be extended.
0:49:52
That's correct.
0:50:04
And it's part of this it is part of this ULURP, not a separate application?
0:50:41
So the 02/2009 plan does not provide it has essentially small buildings in the center of the park breaking up the park and essentially designed for luxury condominiums as opposed to the larger scale rental building that we're proposing on the southern end of the site.
0:51:00
So you would not be able to create the park.
0:51:02
You'd not be able to elevate 30 Third Street.
0:51:06
You couldn't put the gaming application if that were to be successful on the northern end of the site.
0:51:12
So there are a whole host of changes that are significantly better in this plan and respond to the current market demand away from luxury condominiums and towards more rental housing.
Elise Wagner
0:50:01
Yes.
0:50:01
It would require a resolution of the city council.
0:50:12
No.
0:50:13
There would be negotiation of documents with the city, but no state action.
0:50:19
If