The main reason that the NYC Hudson Yards Rezoning Project is taking place is that the location is a prime one for everything the planners want to do. The Hudson River makes up one of the boundaries of the area, with the other boundaries consisting of 8th Avenue, 43rd Street, and 30th Street.
Right now, there is restricted and antiquated zoning in that area, along with no access to mass transit. The streetscape is not a hospitable one, and there are no open spaces for the public. Basically, the entire area is not one that can be used easily, but yet it is in a great place for a number of multiuse buildings.
The amount of underdeveloped land in the area is plentiful, making it a prime location for further development that could have economic value to the city and the people who live there.
Originally, the entire area was dominated by huge blocks of publicly owned space and various types of transportation usage, but that could all be changed with some redesigning. Even though a Master Plan was proposed some time ago, very little has been done in the way of actually getting the project off the ground -- at least until more recently.
More is being done to ensure that the Hudson Yards project actually takes shape, and the rezoning is completed in order to give the builders and planners more of an opportunity to create what they have envisioned as being very important for the city and its future development and advancement.
Discussed here will be the real estate aspects of Hudson Yards, from an overview of what is there now through what will be done in the future and how it will ultimately end up, based on the current design and approved plans. This will provide insight into not only what is being done but why it is being done and how much value will be offered to the city because of the changes.
Public Sector Strategy and Rezoning
The original plan proposed a mixed-use development, and occurred in 1988.
The block located to the south of the Javits Convention Center and the MTA Rail Yards were a part of that plan.
The report that was done into the issue determined that a rezoning of the area was necessary to allow the proper floor area ratio (12) to support the plan that had been created for the space.
The success of the plan also had a contingency, in that the extension of rapid transit access to the area would be required for the project to have the desired value. In 1990, a convention center district was created in order to have the proper zoning to establish a mixed-use development that would be located adjacent to the Javits Convention Center.
The FAR was permitted up to 10 for everything on the sites that surrounded Javits Plaza.
That included office space, community areas, residential locations, and hotel space.
Despite the creation of that district and the FAR permitting, there was no actual development of any of the area that took place at that time.
In 1993, the City Planning Commission provided its study of the Hudson Yards Area.
It concluded that existing CBDs had to be expanded in order to accommodate the long-term growth potential that would become a part of that area. Without that expansion, the project would not live up to its potential, and there was some concern as to whether it should even go forward if the CBD expansion was not part of it. Hudson Yards was seen as being part of the Midtown CBD for purposes of the Planning Commission's report. The conclusion of that report was that the city had to ensure the proper zoning in order to accommodate not only the proposed expansion but the future office needs that would be generated in the future because of that expansion.
The mass transit issue was addressed, as well, but the suggestion of extending the No. 7 line on the subway through Hudson Yards and continuing it all the way into New Jersey in order to ensure proper access to and travel through the area.
That led to a study as to whether the subway extension would be the right choice, and that was completed in 1999.
It linked the expansion of mass transit in the Hudson Yards area to both future development and the viability of land use. The existing conditions in Hudson Yards were analyzed, based on the proposed transportation infrastructure and services, the land use, and the tax base. If the street network could not support the additional development, the project would not be able to go forward. The subway extension was determined to need a "self-financing" model. In other words, there was no money to be used to extend the subway, and a way would have to be found for the extension to pay for itself in order for it to succeed. Nothing else was presented regarding going forward with the Hudson Yards project until 2001, when the Midtown CBD was brought into the picture and the need for a transit-based, mixed-use extension of that district was discussed.
Three essential components were identified in that report, and without those components it was believed that the Hudson Yards project would be a failure. Those three components for success were:
The construction of the extension on the No. 7 subway line,
A rezoning that would literally provide millions of square feet that could be accessed for mixed-use development, and Creation of a number of open-space amenities that would be used to attract residents, visitors, and businesses.
In short, everything had to be rezoned to build what was needed, and then what was needed had to be both desirable and accessible. That made sense, but there were still many obstacles that had to be faced. The size and scope of the project was a daunting one, and not something that could be easily handled or addressed in a short period of time. However, because of the potential revenue, value, and viability of the project, those who were committed to seeing it come to pass pressed on. In 2002, an official Master Plan was created by an urban design team with multi-disciplinary origins and abilities, in order to get the highest quality and most thoughtful plan that could be created. The plan was requested as a joint effect of the NYCEDC and the DCP.
That same year, a demand study was also undertaken. The City of New York hired two different consultants: Cushman & Wakefield and Economics Research Associates.
The goal of the study was to create a forecast for the long-term growth and employment of the office space at Hudson Yards. Having Class A office space in Midtown could be highly lucrative, but only if it was done right and truly desired by enough individuals and companies in the long-term to make it worthwhile. If the office space was going to sit empty, it could be a serious financial blow to the city. While some vacancies were to be expected with any office space, the consultants were to give their professional and studied opinions as to the percentage of office space that would likely be vacant, and whether the future would see an increase or a decrease in the vacancy rates of that office space. The lower the vacancy rate, the more money for the city, which would provide it with a larger incentive to rezone the area and allow the Hudson Yards project to move forward.
In 2003, the preferred direction plan was released by the DCP.
It was confirmed that the three essential components to the project mentioned previously were indeed essential, and if they were not able to be addressed than the viability of the project did not provide a risk level that was acceptable. At that point, it was necessary to start organizing the public sector in order to allow the project to go ahead. All of the studies had been completed, and the only way the project would become successful is if the work that was needed to make it happen was actually undertaken. No other information was necessary to determine if the project was a good fit "on paper." It was time to make the Hudson Yards Rezoning Project a reality.
In order to move ahead with the Hudson Yards project, the city created both the Hudson Yards Infrastructure Corporation (in 2004), and the Hudson Yards Development Corporation (in 2005). The first corporation was designed to oversee cost containment and project financing, while the second corporation was responsibility for the implementation program that was designed by the city for the Hudson Yards project.
The rezoning that took place in 2005 provided the following:
One million square feet of space that would be used for retail shops.
Two million square feet of space that would be exclusively for hotels.