Stadium plan could bring 42,000 jobs.
"Today, Gov. Pataki and I are pleased to announce that the state and city have taken a giant step forward in realizing our shared vision for the Hudson Yards area on Manhattan's Far West Side: the creation of the new convention corridor," said Mayor Michael Bloomberg.
"The corridor will include the expansion of the Jacob K. Javits Convention Center to 42nd Street in two phases, the first phase expanding south to 33rd Street and north to 40th Street, including a 1,500-room headquarters hotel."
The first phase will also include the creation of the New York Sports and Convention Center, a new multi-purpose facility that will double as a 75,000-seat stadium and a 200,000 s/f exhibit hall--home to the New York Jets, and possibly the 2012 Olympics.
Construction is expected to begin on convention corridor in spring 2005, following the conclusion of a comprehensive environmental review now underway.
The Empire State Development Corporation is not releasing when any of the projects will go out for bid.
"In terms of construction, this combined with lower Manhattan development, will fully occupy our industry for years to come," said Richard Anderson, president of the New York Building Congress.
"The complete build out will take decades, creating a huge number of jobs."
HRH Construction, the contractor for the Javits Center that opened in 1986, hopes that it will have a role in the expansion.
"This project will also fuel more construction on the West Side," said James Muscianesi, HRH senior vice president and chief estimator. "The city really does need this. It needs to be brought into the 21st century."
The new Javits Center will be expanded from 760,000 s/f to 1,100,000 s//f of exhibit space, 256,000 s/f of meeting space, as well as 86,000 s/f in new ballroom space as part of the Phase 1 expansion.
The Phase 1 expansion will cost $1.4 billion, funded through several sources. The city will contribute $350 million through reserve funds made available by Battery Park City Authority.
The state will contribute $350 million through restructuring of existing Javits Center bonds and utilizing special federal advanced refunding legislation.
The hotel industry has agreed to a dedicated $1.50 per key surcharge that will generate $500 million. Private financing will help build a 1,500-room headquarters hotel at 42nd Street and 11th Avenue. After Phase 2 expansion, total exhibit and meeting space will be 1,705,000 s/f--this expansion will be financed separately.
When complete, the expansion will have a profound impact on New York's economy, increasing the existing $97 million annual tax revenue generated by Javits by ah additional $53 million and 415,000 hotel nights a year. The expansion will create 10,830 additional jobs.
The New York Sports and Convention Center will also expand the city's convention space and approximately 17 days a year, the facility will function as a stadium including home to the New York Jets for 10 games and host to sporting events and concerts such as the Final Four and a Super Bowl, on the remaining days, and possibly other large scale events like the Olympics in 2012.
During the rest of the year, the NYSCC will double as New York City's first mid-size convention center and offer ancillary space to the Javits Center linked via an underground concourse while also attracting new shows.
It will become part of the fabric of the neighborhood, housing a museum, a community theater and several signature restaurants while providing much needed open space.
And it will set a new benchmark in sustainable design, generating much of its own power.
To make the NYSCC a reality, the New York Jets will invest $800 million, the largest private investment to a comparable facility, and they will pay the MTA annual ground rent for use of the property.
The city and state will each contribute $300 million to build a deck over the rail yards and for the stadium's retractable roof, which will permit the facility to be used year-round. The state's contribution will be dedicated toward the platform over the rail yards.
The city and state's contribution to the NYSCC is limited to $300 million each, and the Jets have pledged to absorb any excess costs. Should the project come in under budget, the city and state will share in cost savings.
As with the Javits expansion, the NYSCC will also have a profound impact on New York's economy, generating 6,700 permanent jobs, and $75 million in additional revenue to the city and state.
According to officials, the entire project will generate a total of $225 million in annual city and state revenues. Total annual debt service costs on the public sector's $1.3 billion contribution to the convention corridor are estimated to be approximately $91 million.
Not all are pleased with the plan, however, and a group called The Hell's Kitchen/Hudson Yards Alliance protested the project on the same day of the announcement.
The group included council members Christine Quinn and Phillip Reed, Assembly Members Richard Gottfried and Adriano Espaillat, State Senator Liz Krueger, a representative from State Senator Toro Duane's office, along with community activists and representatives of other local and state elected officials.
The group contends that the estimated revenue from the project's development is not realistic.
"The financing for the proposal relies on a rezoning generating millions of new square footage of development in order to pay for the billions worth of capital costs," according to the alliance press release.
"The alliance believes that this proposal, in conjunction with the proposed stadium imperils what should be driving the process; the critically needed expansion of the Javits Center and the enormous opportunity for rational development on the West Side.
"This proposal, unfortunately, makes expansion of the Javits Center contingent on the success of an elaborate financing scheme and by having the MT A cede one of its most valuable assets--The West Side Rail Yards--in order to construct the stadium and to finance its infrastructure."
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|Publication:||Real Estate Weekly|
|Date:||Mar 31, 2004|
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