The Related Companies

Here’s a postcard we got this week from the Friends of the High Line, a subtle call to arms for supporters to show up in force at a West Side rail yards forum on Monday. The incredibly successful advocacy group, which got tens of millions of public dollars to transform the abandoned Chelsea elevated rail viaduct into parkland, is waging, for now, a tepid battle against the Related Companies' plans for the rail yards.  read more »

The proposals to redevelop Pier 57 on Hudson River Park have been released, and it seems like rent-paying marketplace is the common theme for the pier off West 15th Street.

The Related Companies, West Village-based YoungWoo & Associates, and the Durst Organization/C&K Properties are the three suitors, each trying to impress the city/state Hudson River Park Trust. All three teams put forward a plan with outdoor open space and a large amount of market-retail space (two of the teams mentioned Seattle’s Pike Place as a corollary).

This is the second go-round for the Trust, which awarded the development rights for the pier back in 2005 to the Witkoff Group.  read more »

The deal to put $15 billion in residential and commercial development atop the M.T.A.'s West Side rail yards has hit a delay, as the agency will not sign a contract with developer Related Companies this week, as was originally scheduled. The state authority says it has reached an agreement with Related (which is in a joint venture with Goldman Sachs) to push back the deadline for signing a contract for the property by another 90 days, as the M.T.A. has been slower than expected in producing the needed paperwork.

"We have together agreed on an extension of the designation period," said Gary Dellaverson, the CFO of the M.T.A. (who has to have one of the least enviable jobs in government these days). "Our expectation was that the documents would have been turned a month and a half ago.

"This is my fault—the fault of the M.T.A.," he said. "This is not a product of either Related or Goldman or their lawyers."  read more »

The numbing onslaught of bad real estate news shows no sign of abating.

Real Estate Weekly is reporting that Centerline -- the real estate investment firm headed by Related Companies' Stephen Ross that the Wall Street Journal recently reported was in danger of defaulting -- is negotiating with Blackstone Group to wriggle out of its 100,000 square foot lease at 1095 Avenue of the Americas. 

In 2007, Centerline clinched a deal for the third, fourth and fifth floors, totalling 100,000 square feet, at the hefty price of $125 a square foot (the price ultimately rose to $140 a square foot). The big numers were ostensibly justified by Blackstone's aggressive repositioning of the building, which includes a gut renovation and a brand new curtain wall.  read more »

Some marriages were meant to be.

Signature Theater Company has been something of an orphan of late, having been invited to, then booted out of a planned World Trade Center performing arts center last year. It has a home on the West Side, but has been looking for a bigger one in which to expand.

At the same time, the Related Companies has been hanging its head low since the Bloomberg administration and community members scoffed in 2006 at its plan to put a Cirque du Soleil theater in the base of a new West Side tower, thereby getting a special theater development "bonus" for the site.  read more »

Centerline Holding Company, headed by Related Companies bigwig (and REBNY chairman) Stephen Ross, may not be able to meet its short-term debt obligations, according to this morning's Wall Street Journal, which cited a Moody's Investment Services report that further cut Centerline's credit rating.

Here's more:

The move comes as the credit-market turmoil, coupled with the weakening commercial real-estate market, has severely hurt Centerline's business of lending to owners and developers of office, retail, multifamily and other types of properties. A potential default by Centerline would also deal a blow to Mr. Ross, who made an equity infusion in Centerline in December 2007. Mr. Ross's company, Related Cos., is the largest shareholder of Centerline. He didn't return a call seeking comment.

Moody's, which downgraded the company's rating to B1 from Ba3, said in a news release that it believes Centerline's "liquidity resources may not be adequate for meeting its near term needs." In particular, the credit-rating firm noted that Centerline must repay in full a term loan by Dec. 31.

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Much of Governor Paterson's approach over the last few months has been characterized by telling New Yorkers what they will not have under a Paterson administration. There will not be flush state coffers (and there will be cuts); there will not be a finished World Trade Center by 2012; there will not be enough money to fund an M.T.A. capital plan. Money is short, campaign promises were none, so cutting back has become issue No. 1.

But today, invoking the success of projects built during the Great Depression such as the Lincoln Tunnel and much of the New York City subway system, Mr.  read more »

The planned redevelopment and expansion of Penn Station, a top priority of the Spitzer administration, needs to include transportation improvements in order to be a "favorable investment" of the state's resources, Governor Paterson said today.

"What is essential to Moynihan Station is that it be a viable transportation hub," he said, speaking at a Crain's New York breakfast this morning. "If it doesn't include the transportation, its value diminishes considerably as far as I'm concerned."

The remarks suggest yet another turn in the project's long history, with yet another desire to expand its scope. The project, named Moynihan Station in honor of the late senator who championed it, has sat on the drawing boards since at least the early 1990s,  read more »

Might be a bit premature to get in line for a Related Companies-built condo on the western rail yard. The state released an early document in the rezoning process for the site just south of the Javits Center that lays out a tentative schedule for the eight towers slated to rise on the property, with the earliest completion date set for September 2015, and the latest being December 2018. (The document is for the western half of the 26-acre West Side rail yards, as the eastern half was rezoned in 2005, mostly for commercial buildings.)

Related won the rail yards back in May, when it pledged to give the M.  read more »

Governor Paterson said today that his administration has asked the developers of the planned redevelopment of Pennsylvania Station to come back with a new plan, showing the first public sign of life in the project in months.

In a Q&A on WCBS radio, Mr. Paterson was asked about the status of the long-delayed project, known as Moynihan Station.

"We have asked the developers of the potential Moynihan Station to come back to us with another plan that particularly features the subject we've been talking about today--transportation," Mr. Paterson said. "Already we have addressed with them the dwindling supply of revenues that we as the state can put into the plan, and we're expecting an answer form them within a week or two.  read more »

Portfolio has a profile of Related Companies chairman Steve Ross today, and along with it, a video of the magazine's real estate forum at the Four Seasons last month, where Joanne Lipman, Portfolio's editor, queried—somewhat awkwardly, at times—Mr. Ross, Vornado chairman Steve Roth, and Elliman superbroker Dolly Lenz.

(For more on Mr. Ross, we have an unrelated story on Related and a West Side tower in today's print edition.)

Stephen Ross apparently is rather intent on getting a development bonus for a new far West Side tower.

Mr. Ross, chairman of development giant the Related Companies, is seeking, once again, to fill the base of a planned 58-story, 1.2 million-square-foot hotel and residential building on 42nd Street and 10th Avenue with a theater, thereby taking advantage of a zoning code bonus that allows for a bigger tower overhead.

Related, which met opposition in 2005 when it tried to bring Cirque du Soleil to the tower, is now in advanced talks with the Signature Theater Company to be the main theatrical tenant in the tower, according to people familiar with discussions.  read more »

The Related Companies has boosted the title (and workload, presumably) of Vishaan Chakrabarti, project manager for the Related Companies and Vornado Realty Trust on Moynihan Station.

Mr. Chakrabarti, formerly a senior vice president, has been named Executive Vice President of Design and Planning. He will continue to lead the Moynihan Station effort, according to a Related spokeswoman.

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In case there was any doubt, Steve Roth and Steve Ross really want Madison Square Garden to move.

This morning, some 13 weeks after Madison Square Garden announced it was renovating and staying in place (i.e. not moving), the developer duo professed, once again, their eagerness to see the Paterson administration pick up the ball and move forward with the large-scale Moynihan Station plan. The plan, in its most recent iteration, would involve the state using Port Authority money intended for regional transportation projects to buy the Garden and its air rights from the Dolan family—that is, if they’re willing to sell (the Dolans have expressed no interest and are moving forward with the renovation).  read more »

Location: On the rail yards, how did News Corp. tell you that they were no longer interested in being an anchor tenant?

Mr. Blau: There were several rounds, and they [the M.T.A.] called us in for what they said was the final round. We had hoped, or thought, that we would be designated at this meeting, which was to happen the next day; and literally 12 hours before the meeting, we got a call from News Corp. that said while they were very, very interested in the site, they couldn’t agree to commit at that moment.  read more »

When Madison Square Garden unceremoniously announced on March 27, via late-afternoon calls to reporters, that it was moving forward on a renovation of its arena, it seemed to be the death blow to the planned redevelopment of Pennsylvania Station and the surrounding area. The Garden, led by chairman James Dolan, was exhausted with the lack of progress in a slow-moving, state-led plan to remake and expand the station, to be called Moynihan Station, which required the Garden’s moving to a new arena in the neighboring Farley Post Office.  read more »

Now it's really official: the M.T.A. board this afternoon voted to approve a deal with the Related Companies and Goldman Sachs to develop over the 26-acre West Side rail yards.

A few nuggets of rail yards info from the meeting: According to M.T.A. CFO Gary Dellaverson, who summarized negotiations to the board, the key to the Related Companies' victory was its willingness to literally pick up the $1.054 billion Tishman Speyer deal and sign it, only inserting one notable change.  read more »

Stephen Ross must be Mayor Bloomberg’s best friend in the world right now.

The bulk of the so-called mega-projects around the city are in shambles or facing major hurdles; the term “lame duck mayor” has been popping up with increasing frequency around City Hall; and the city’s economic outlook remains bleak for some time to come.  read more »

The storyline behind Related’s surprise win in the West Side rail yards bidding goes, more or less, as follows, according to a Monday afternoon press conference with M.T.A. officials and Related Chairman Stephen Ross:

Back in the late winter, when a round of bids was due to the M.T.A., executives at News Corp. gave Related Companies a call within 24 hours of the bid deadline, announcing that the company would not commit to becoming an anchor tenant in Related's bid as it had previously indicated. With little time to think before its bid was due, and at a time when Bear Stearns was collapsing, Related backed out of its full bid, hoping to hang on to a partial deal for the western half of the rail yards.  read more »

It’s official: Jumping back from the collapse of a deal with Tishman Speyer Properties, the Metropolitan Transportation Authority is going with Stephen Ross’ Related Companies to develop the West Side rail yards, Manhattan’s largest remaining parcel of developable land.

As we first reported last night, Related snapped up the deal from the M.T.A. less than a week after it abandoned talks with Tishman Speyer. Tishman—apparently scared off by the tremendous risk involved in developing with no anchor tenant, a parcel in need of rezoning and an inclement lending market—tried to change the terms of the deal to lessen its risk at the last minute.

In a release from the M.T.A., it seems the agency gave Related, in a partnership with Goldman Sachs, an option to have more time to build before they start making rent payments if the developer so chooses, allowing the team to defer payments for two years.

The deal is very similar to the Tishman proposal in terms of finances, pegged at $1.054 billion in net present value.  read more »

The Metropolitan Transportation Authority has reached a tentative deal to award development rights for the West Side rail yards to the Related Companies, according to a person familiar with discussions. The deal for the 26-acre site on Manhattan’s West Side comes less than a week after the M.T.A. broke off talks for the property with Tishman Speyer, the major development firm that was announced the winning bidder in late March.  read more »

With Tishman Speyer out of the picture at the West Side rail yards, the Metropolitan Transportation Authority is now headed back to the other three bidding teams (Extell Development, the Related Companies, and a joint venture of the Durst Organization and Vornado Realty Trust); that is, if they’re still interested.

The apparent frontrunner, given that it was the runner-up to Tishman in the original bidding, would be Durst/Vornado, the only remaining team in late March with an anchor tenant, S.I. Newhouse’s Condé Nast. If Condé Nast is no longer on board with a move—The Times has reported that Tishman failed to woo them in recent weeks—that could mean trouble for the Durst/Vornado bid, or certainly the value of it.  read more »

No one ever said planning for a train station was cheap.

In a recent filing with the SEC, Vornado Realty Trust wrote off $23 million associated with the “abandonment” of the so-called Moynihan East portion of the Penn Station redevelopment plan.

Taken with planning for the expansion of the station into the Farley Post Office across the street, Vornado, led by Steve Roth, has spent $34.2 million, according to the filing:

The three months ended March 31, 2008 includes a $34,200,000 write-off for our share of two joint ventures’ pre-development costs, of which $23,000,000 represents our 50% share of costs in connection with the abandonment of the “arena move”/Moynihan East portions of the Farley project.

Given that Vornado is in a 50/50 partnership with the Related Companies for the project, the numbers reported by Vornado suggest that the two companies have spent nearly $70 million on the project since they were designated developers in 2005!  read more »

Developers Vornado Realty Trust and the Related Companies are grasping for options to keep alive a multibillion dollar redo of Penn Station and related real estate development, as they have asked the city and state to back a loan to build a new Madison Square Garden in the Farley Post Office across Eight Avenue.

The proposal is intended to lure the Garden back to the table, as the company, led by Chairman James Dolan, pulled out of the larger plan in March. The state is considering the offer as one of many options for the project, a state official confirmed.

In this option, the state and city could be saddled with the cost of the arena—said to be in the range of $900 million to $1 billion—should the larger redo of Penn Station ultimately fall apart.  read more »

A team led by the Hudson Companies will give rise to a mixed-income village along the banks of the once-toxic Gowanus Canal, the city's Department of Housing Preservation and Development announced today. The Gowanus “Public Place” will have 774 units of housing (541 below market rate) among a complex of buildings, and comes as the city eyes a transformation for the once (and still, to some extent) industrial area.

The winning team, which also includes the Bluestone Organization, the Fifth Avenue Committee and Jonathan Rose Companies, beat out Stephen Ross, the Miami Dolphins-owning, constantly building CEO of The Related Companies.

Mr. Ross, who built the Time Warner Center, has had a big string of defeats in the competitions on publicly-owned land. Related’s Pier 40 proposal has been all but tossed out, the company lost its bid for the West Side rail yards after News Corp. pulled out as an anchor tenant, and now this.

Toll Brothers has its own residential project lining the Canal, as does Whole Foods, which is trying to put a supermarket on a brownfield.  read more »

Last night, NBC threw a party to celebrate the fifth anniversary of Countdown with Keith Olbermann. Network bigwigs, including Jeff Zucker and Phil Griffin, turned out to toast their top cable-news anchor, who at one point during the night posed for pictures wearing a sparkling tiara.

The party was thrown at the Landmarc restaurant at the Time Warner Center.  read more »

With final bids due Friday for the proposed redevelopment of Hudson River Park’s Pier 40, the West Village community seems all but too eager to shut the door on Related Companies' proposed park and waterside entertainment complex. Instead, many seem to be opting for a community plan that mostly preserves the giant working pier-turned-parking lot and ball field complex while still generating enough money to survive.

Not that Related isn’t trying to be loved.  read more »

Stephen Ross’s Related Companies is receiving an infusion of $1.4 billion from investors, including Goldman Sachs and investment firms from the Middle East, according to an article in today’s Wall Street Journal [subscription].

The firm is apparently now worth about $5 billion, the Journal tells us:  read more »