Related Cos., developer of New York’s Time Warner Center, expects to start work on a second portion of its Hudson Yards project in the city by the middle of next year, Chairman Stephen Ross said.
Construction on the first tower, the future headquarters of Coach Inc., will begin by November. Ross is confident that he will have enough lease commitments to begin the next section in mid-2013, he said today in an interview. Related is “far along with several tenants that really want to be there,” he said separately on Bloomberg Television’s “Market Makers” with Stephanie Ruhle and Erik Schatzker.
“When you build a project that size, you need a critical mass,” Ross said on the show, without naming potential tenants. “We’re looking to really give a value proposition to the tenants, like at cost, to bring them in, because we have the rest of the project to amortize, where we’ll make our profits. We’re making a proposition where it’s hard for them to say no.”
Related, based in New York, has rights to build more than 12.7 million square feet (1.2 million square meters) of mixed development over the New York Metropolitan Transportation Authority’s west side rail yards in Manhattan. The eastern portion of the project, which will be developed first, is expected to cost $6 billion, according to the company.
The 46-story Coach tower, at 10th Avenue and West 30th Street, is one of two buildings planned for an eastern section of the project that doesn’t require a platform over the railroad tracks. Construction of the decking for the second portion should cost about $800 million, Related Hudson Yards President L. Jay Cross said in an interview last year.
Ross isn’t worried about financing the project, he said in the interview.
The portion of the project to start next year will include a second office tower and a 750,000-square-foot retail complex, along with a hotel and some residential units, he said. Both eastern sections should be completed by 2017, according to Ross.
The western rail yards, closer to the Hudson River, would be dominated by high-rise housing. The entire development will include 6.3 million square feet of offices, about 5,000 residences, 1 million square feet of retail, a hotel, a school and a cultural center, according to the project’s website.
Related’s partner on the project is Toronto-based Oxford Properties, a real estate investment unit of Ontario Municipal Employees Retirement System.
Related said on Sept. 7 that Ross, 72, would turn over his position as chief executive officer to Jeff Blau, 44, the company’s president. Ross remains as executive chairman, with responsibility for global business strategy and overseeing the 26-acre Hudson Yards project.