There’s an old saying in poker: If you don’t know who the fish is at the table, you’re the fish.
I can’t shake the feeling that Related Companies played the latest Hudson Yards rezoning brilliantly, at the expense of its former partner in the planned development, Wynn Resorts, and city officials as well.
Wynn had joined Related on the project because it initially included a casino, but that proved to be a no-go for the local City Council member, Erik Bottcher. Because the casino and rezoning needed Council approval, Bottcher had the ability to kill them on behalf of the entire Council, thanks to the chamber’s tradition of “member deference.”
Predictably, Bottcher nixed the casino, which he didn’t even have to do to Wynn executives’ faces because they weren’t in the room during negotiations. Only Related was.
Related, which builds residential and office buildings, not casinos, willingly sacrificed the gaming venue (which might not have won a state license anyway) to get approval for the rest of its project. That left Wynn with no role.
Wynn promptly blasted the city’s rezoning process as if surprised at how it works. Really? It’s not plausible that such a large, experienced company would have pursued a multi-billion-dollar project without fully understanding the Uniform Land Use Review Process.
It’s also not plausible that Wynn expected a casino plan to be greeted enthusiastically by Bottcher’s constituents, and therefore by Bottcher. Not only did the Council member make that clear to Related and Wynn from the outset, but history tells us that high-income, progressive Manhattanites don’t want a casino.
These are not people who became well-off by gambling. They are not desperate for casino jobs, or any jobs. All they really wanted out of Related’s project was affordable housing, and no tower hovering over the High Line.
In the end, they got that, but at a huge cost to the city’s fisc. Instead of Related paying for a $2 billion platform to support the development over the rail yards, taxpayers will. Not a hint of protest was heard from the public, media or politicians at this massive hand-off of the financial burden.
Were people really fooled by Related’s claim that an “innovative” solution had been found to pay for the deck? Maybe they were expecting it all along, because the same solution — payments in lieu of taxes — had been used for the first half of the Hudson Yards megadevelopment.
To review: Without PILOTs, property taxes from the project would go into the city’s general fund. Instead, the tax revenue will be used to pay for the deck, saving Related a cool $2 billion. In exchange, Related gave up the casino (sorry, Wynn!), added housing and removed a tower that would have shadowed the High Line.
That is probably what Related CEO Jeff Blau expected to happen, and indeed planned, from the outset. Related’s leverage was the ability to leave the site idle, with no affordable housing or 35,000 union construction jobs.
Perhaps at some point, the New York Times will write an investigative story about huge subsidies going to the project, as if making some kind of journalistic discovery. That’s what the Times did after the first half of Hudson Yards was built, inflating the subsidy number by including the $2 billion extension of the No. 7 subway line.
But for now, everyone (except the irrelevant outsider Wynn) seems pleased with the outcome. The City Council approved the rezoning Monday.
Well played, Mr. Blau. Well played.
Read more
Related agrees to increase affordable units at Hudson Yards
The Hudson Yards casino bid is dead
No dice: Another New York casino bid folds
