City Will Have to Pay Another $368M for Hudson Yards
In November, 2014, we reported that the 26-acre Hudson Yards mega-development had cost the city nearly $650 million in subsidies, coming straight out of the pockets of taxpayers. We also noted that it wasn’t going to stop there; a review by the city’s Independent Budget Office said even more would be needed through 2019 to complete the “next great commercial district.” And now the new figures are in. According to DNAinfo, the city will shell out an additional $368 million through 2019, bringing their total payout for Hudson Yards to more than $947 million.
When the City Council approved the Related Companies‘ Hudson Yards project in 2005, they gave the go ahead for the Bloomberg administration to float $3 billion in bonds through the Hudson Yards Infrastructure Corporation (HYIC), which was mainly to finance the $2.4 billion extension of the 7 train. However, “The cost of the project was supposed to be offset by revenue from commercial and residential taxpayers moving into the area. But the IBO found that taxes have yet to cover the cost of the project, leaving the city on the hook for hundreds of millions of dollars more than expected,” reports DNAinfo.
Bloomberg predicted that in a worst-case scenario the city would be responsible for $205 million in debt service subsidy. But as of last fall, the city had already shelled out $439 million for shortfalls. Plus, as we noted, “An additional $210 million went to cost overruns for infrastructure that wasn’t addressed when the project commenced, including $75 million earmarked by Bloomberg for the Culture Shed, Hudson Yards’ planned performance and entertainment facility.”
The shortfall first came to light in a 2013 report by the IBO titled “City’s Spending on Hudson Yards Project Has Exceeded Initial Estimates,” which said, “Revenue collected by the Hudson Yards corporation has fallen short of expectations. The corporation projected that it would collect $283 million in tax and fee revenues through 2012, but in fact has collected $170 million.”
It’s predicted that the city will pay up to $66 million in 2018 and another $97.8 million in 2019 to HYIC’s bondholders. This is in addition to the $51 million they’ll provide annually from Hudson Yards‘ residential tax revenue.
[Via DNAinfo]
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