This week’s long-awaited opening of Hudson Yards galvanized its myriad, anti-progress haters. Not least The New York Times, which on Sunday ran what amounted to an incitement to riot over the spectacular project that’s transforming Manhattan’s long-neglected far West Side.
But the Times’ tale of alleged taxpayer handouts to the project’s developers, Related Companies and Oxford Property Group, is an outright lie. Citing a New School “analysis,” it’s so full of misrepresentations, false conflations and just plain baloney, it’s hard to know whether to laugh or cry.
The front-page Times story falsely claimed that the city is handing $6 billion in “aid,” “incentives” and “subsidies” specifically to Related’s 28-acre Hudson Yards project: “The city government has for more than a decade been funneling even more aid [than for Amazon] to Hudson Yards, a 28-acre complex of gleaming office buildings and luxury residential towers . . .
“In all, the tax breaks and other government assistance for Hudson Yards have reached nearly $6 billion, according to public records and a recent analysis by the New School.”
But that isn’t what the New School report said. It showed that the $6 billion in government aid was distributed across the 360-acre Hudson Yards District — which is 13 times larger than Related’s site and where more than a dozen other developers are at work.
Then, too, public aid for Hudson Yards is peanuts compared with Amazon’s by the only measure that matters — as a percentage of total development cost.
Amazon would have received $3.2 billion in subsidies for its Long Island City campus, which Jeff Bezos said would cost $3.6 billion to build. Thus, Amazon’s breaks would have totaled 89 percent of its development cost.
Hudson Yards, on the other hand, is estimated to cost Related and Oxford $28 billion (and likely more: the first half, which opens this week, cost $16 billion alone). If the Times’ estimate of $6 billion in government support was accurate, it’s slightly more than 21 percent of the development cost. That’s a comparatively modest public investment in a game-changing project that’s infinitely more complex than Amazon’s and posing enormous risk for the developers.
But the Times’ $6 billion figure is much, much higher than the truth. The story blurred distinctions between subsidies specifically for Related and those which benefit the much larger district from West 30th to West 41st Street and from Eighth Avenue to the Hudson River.
The latter category includes $2.4 billion the city paid the MTA to extend the No. 7 subway line from Times Square to 11th Avenue and 34th Street. The new train catalyzed major projects completely separate from Related’s. They include Brookfield’s 6-acre Manhattan West complex, a Tishman Speyer skyscraper called The Spiral, Boston Properties and Joseph Moinian’s 3 Hudson Boulevard, a Marriott Hotel and numerous new apartment buildings.
Without the new station, SL Green wouldn’t be in contract to buy control of 464 W. 34th St., a creaky, 91-year-old former printing building it plans to convert to first-class offices.
The New School study also cited $500 million in city funds to build Hudson Park and Boulevard — a public greenway that is not part of Related’s complex. Shouldn’t we cheer government investment in mass transit and parks that are good for everyone?
The $6 billion also includes $200 million the city paid to buy air rights from the MTA. How does $200 million for the cash-strapped MTA amount to a taxpayer ripoff? There’s also $500 million for nearby street upgrades and — horrors! — $106 million for a new public school.
By The New School’s tally, all the city-sponsored tax breaks for the whole Hudson Yards District plus $359 million in bond interest on Related’s Hudson Yards complex total under $2 billion — or a mere 7 percent of the $28 billion Related and Oxford are spending.
Yet even that near-$2 billion is misleading. Of $1 billion in tax relief for the district’s new commercial properties, more than $300 million is for buildings that aren’t Related’s. As in Amazon’s case, the city isn’t taking tax revenue out of a cookie jar. Most of the “break” for Related takes the form of reduced-rate PILOTs (payments in lieu of taxes) over the next 20 years, which Related passes on to tenants in the form of lower rent.
What does the city get for its minimal investment?
New offices for great companies, new homes, stores, restaurants and open public space where previously existed a sunken train yard. Plus all the jobs, tax revenue and tourism dollars that will accrue from a thriving new neighborhood — news the Times doesn’t see fit to print.