Hudson Yards Drops Casino Bid in Face of Political Opposition
The developer of Hudson Yards has pulled out of the heated competition to bring a full-fledged casino to New York City.
The developer, Related Companies, said on Monday that a casino would no longer anchor its plans for Manhattan's Far West Side and that it would instead just build thousands of units of new housing on the site near the Hudson River.
The new proposal calls for the construction of up to 4,000 residences on top of the second half of the sprawling development, a 28-acre neighborhood on top of an active rail yard that connects Penn Station with tunnels under the Hudson River. Most of the housing units would be apartments, and at least 400 of them would be rented below market rate. It would include a 6.6-acre park.
The announcement followed a statement released earlier in the day by Wynn Resorts, the casino operator partnering with Related, that it, too, was pulling out of the project. It cited the intractability of Manhattan politics.
Their decision came in the face of steadfast opposition to the casino by the local councilman, Erik Bottcher, and highlighted the structural difficulties in building in New York City, a challenge heightened by the unique politics of casino development.
'Something as significant as a casino in a community requires substantial community buy-in,' Mr. Bottcher said. 'That didn't exist here.'
The decision to withdraw comes just less than a month after Las Vegas Sands withdrew its own proposal to build a casino just over Long Island's border with Queens, in Nassau County. Both decisions stand to benefit the remaining casino operators who are still competing for one of up to three licenses in and around New York City. Formal bids for the casinos are due in June, with a decision by the state expected by the end of the year.
Remaining bidders include SL Green Realty Corporation and Caesars Entertainment, which want to build a casino in Times Square; the New York Mets owner, Steve Cohen, and Hard Rock International, who want to build a casino near the baseball stadium in Queens; Bally's, which wants to put a casino in the Bronx; and the World Trade Center developer Larry Silverstein, who is working with Rush Street Gaming and Greenwood Gaming and Entertainment to build a casino in Manhattan.
To put a casino in Hudson Yards, Related Companies and Wynn would have needed City Council approval to change the area's zoning, and the Council typically defers to the local member on land-use decisions. That approval was not forthcoming.
In a statement, a Wynn spokesman, Michael Weaver, said the company had better uses for its capital 'than investing in an area in which we, or any casino operator, will face years of persistent opposition despite our willingness to employ 5,000 New Yorkers.'
The casino proposal was part of a mixed-use development that would have included apartments, office space and a school. The deal the developers have struck with Mr. Bottcher eliminates the casino, adds more apartments than would have been built under the original casino proposal and allows for more office development than the original deal that Related Companies struck with the city in 2009. The earlier casino plan included 1,500 housing units, but Related recently offered to build up to 4,000 residences, in an effort to appease critics.
The latest iteration, however, would produce less housing than Related had promised in 2009, years before it broke ground on Hudson Yards, the largest private real estate project in United States history.
The company planned to separate the site into two sections: office skyscrapers, a large, luxury mall and condominium towers on one half, which opened in 2019, and up to 5,700 residences, a park and a school on the other half. The entire site would have included 431 below-market units.
But the second half of the development stalled. Related faced rising costs to build a platform over the rail yard, which would have been required before the construction of buildings could begin. The price doubled from an earlier estimate of $1 billion, and Related officials believed that the initial vision of the property was no longer economically feasible.
The new plan would use revenues generated by the new buildings to help pay for the platform; a similar finance structure was used on the first half of Hudson Yards, including to help pay for an extension of a subway line to the neighborhood.
Since Related opened Hudson Yards, its office towers have attracted large companies willing to pay some of the highest office rents in the country. Other developers have built office towers and residential towers in the larger neighborhood, transforming a former industrial swath of Manhattan.
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