City

City's proposal for financing development of

Manhattan's Far West Side

On February 11, 2004, Deputy Mayor Dan Doctoroff and Budget Director Mark Page outlined the following details of a West Side financing proposal:

The Hudson Yards Infrastructure Corporation would be established to issue bonds that would generate revenue to extend the No. 7 train, build a platform over the Hudson rail yards, and prepare sites in the area for commercial and residential development.
Bonds would be issued over the next ten years, starting with a $470 million bond sale next year.
The Corporation would issue $2.77 billion in long-term revenue bonds and $900 million in commercial paper (short-term debt). The short term debt would be used to pay interest on the long term debt.
In order to pay back bondholders, the city would use funds raised from a blanket Payment In Lieu Of Taxes (PILOT) arrangement with all developers that come to the area. Instead of paying certain taxes to the city, the developers would pay into a fund designated specifically to repay the debt issued to develop the area. (If this sounds similar to a Tax Increment Financing arrangement, it is. Click here to learn more about TIFs.) Additional city funds would be raised from the development of the Eastern rail yards, sale of public property within the site, bonus payments for air rights, payment in lieu of sales taxes.
Goldman Sachs, Bear Stearns, and JP Morgan Chase were chosen to underwrite the bonds.
Financing plans for the Jets stadium platform (estimated to cost the public $600 million), stadium roof and the Jacob Javits Center expansion (estimated to cost $1.4 billion) will be announced separately. Governor Pataki recently indicated that New York State may assist with these pieces of the West Side plan.
The City Council must approve a rezoning of the area, and the City must buy development rights for the rail yards from the Metropolitan Transit Authority.

Read coverage of the February 11, 2004 announcement in The New York Times, The Bond Buyer.