Posted Mar 16, 2011, 11:31 AM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 52,893
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http://www.nytimes.com/2011/03/16/re.../16subway.html
Developers in New York Try to Ease Prickly Relations
By JULIE SATOW
March 15, 2011
Quote:
...Mr. Paley and his team were given the task of spurring development around transit centers, mostly in suburban areas, and to coordinate the many public agencies and other stakeholders that are often involved in large, privately financed transit improvements. With the real estate market now beginning to thaw, his role may become more critical.
“It was very quiet when I first came onboard, but in the past several months, the phone in our office has begun ringing, indicating to me that developers are warming to the idea of building again,” Mr. Paley said.
Mr. Paley’s first big deal in New York City has been an agreement with Vornado Realty Trust to develop 15 Penn Plaza, a proposed office tower that would replace the Hotel Pennsylvania on Seventh Avenue between 32nd and 33rd streets. Vornado is hoping to construct a 2.05 million-square-foot office building, exceeding what is allowed under the current zoning.
In exchange, Vornado agreed to build and maintain transit improvements, including reopening the Gimbels Passageway that connects Herald Square and Penn Station. Under the proposed plans, it would transform the passageway, which was closed in the 1980s, into an 800-foot pedestrian concourse to rival Rockefeller Center.
Vornado has said it would not begin construction on the project until it secured an anchor tenant. Still, it wants to have all of its approvals in place in expectation of finding that tenant, and so last summer it negotiated a deal with the transit authority and the city. Known as a restrictive declaration, the agreement, which is recorded against the property and enforceable by the city, includes several clauses meant to prevent a repeat of the problems with the escalators at Zeckendorf Towers.
Among the requirements is that the transit improvements must be designed and agreed upon before the city will grant Vornado building permits. “Otherwise, if the construction starts, and the building moves quickly, there is a risk that the public improvements that were promised will get left behind,” Mr. Paley said.
To ensure that Vornado maintains the improvements, and in the event that 15 Penn Plaza changes ownership, Vornado must provide financing security, possibly in the form of a letter of credit. The developer also will be unable to get a temporary certificate of occupancy until the transit improvements are substantially completed, Mr. Paley said.
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