N.Y. project offers model, lessons for Widett Circle proposal
NEW YORK — A gleaming retail complex featuring New York City’s first Neiman Marcus. A constellation of restaurants chosen by Thomas Keller. Office towers anchored by blue-chip companies like Time Warner and HBO. And all of it to be built on 26 acres of steel-and-concrete platforms that stretch across an active rail yard.
In its breadth and ambition, the sweeping redevelopment of Hudson Yards on Manhattan’s industrial West Side, launched in 2005 and slated for completion in 2024, represents what Boston Olympic organizers believe can be accomplished at Widett Circle in South Boston.
Yet the $20 billion Manhattan project, originally planned as the home of New York’s Olympic Stadium if the city had hosted the 2012 Summer Games, also demonstrates some of the friction Boston could face if it tackles a similar redevelopment of the rail yard alongside Interstate 93 as part of its bid for the 2024 Summer Games.
New York City granted the Hudson Yards developers controversial tax breaks of up to 65 percent, which critics characterized as a handout to wealthy businessmen who stand to make a fortune by building in one of the most profitable real estate markets in the country.
“It was a giveaway to developers, and a giveaway that will ultimately cost the city billions of dollars,” said James A. Parrott, deputy director and chief economist at the Fiscal Policy Institute, a union-backed New York watchdog group.
“The city needs to recognize that it’s totally unnecessary to give commercial property tax breaks in Manhattan,” Parrott said. “There’s just absolutely no need for it.”
Boston 2024 officials are proposing steeper breaks of up to 85 percent to entice developers to take on the high cost of building over the rail yard at Widett Circle, located on the industrial edge of South Boston, another booming real estate market.
Hudson Yards, billed as the country’s largest private real estate development, has also become a symbol to critics of a city that increasingly caters to the wealthy. It will boast 5,000 residences — 400 of them affordable — and a luxury hotel with an Equinox gym.
Daniel L. Doctoroff, who spearheaded the Hudson Yards project as chief of New York’s Olympic bid and then as a deputy mayor of New York, said the tax breaks for the project were needed to lure developers to what he called a “new frontier.”
Even though it is sandwiched between the trendier neighborhoods of Hell’s Kitchen and Chelsea, the area — from 30th to 34th streets and 10th to 12th avenues — has been surrounded by auto repair shops, parking lots, and a drive-through McDonald’s.
Over the next 30 years, the 17 million square feet in new residential and commercial buildings rising at Hudson Yards will generate $30 billion in revenue for the city, he said, more than making up for the cost of the tax breaks — and far more than the taxes generated if the area had not been developed.
“And what will that $30 billion be used for?” Doctoroff said. “It will be used for schools, and for social welfare programs, and for police protection, and further investments in the city.”
New York’s independent budget office has also pointed out that city taxpayers were forced to cover higher-than-expected debt payments for the extension of a subway line to Hudson Yards. The increased tax revenues generated by the project were designed to help cover the debt payments for the rail line. But the recession slowed the project and revenue dipped $113 million below estimates.
Boston 2024 officials, who floated a similar debt plan for Widett Circle in their original bid in January, have since said they do not plan to ask the city to borrow any money for the project.
Doctoroff said there was no way that New York officials could have predicted a recession would hit and force higher debt payments. “Name me one great project that you look back on and has changed the trajectory of a city that is not without risk; I don’t think you can do that,” said Doctoroff, who now serves on the boards of Boston 2024 and the US Olympic Committee. “We have to calculate the risk and make the best decision that we possibly can. But our example at Hudson Yards shows there are ways of forcefully managing the risk, and ultimately reaping the rewards.”
After New York lost the 2012 Games to London, city officials converted their plans for an Olympic Stadium into a proposal to turn the rail yard into a trendy district where 65,000 people would live, work, eat, and shop each day.
Officials rezoned the neighborhood to allow for more densely packed structures, and set about building platforms over 30 tracks that connect the Long Island Railroad to nearby Penn Station. The two, 13-acre platforms will cost a total of $1.5 billion and be anchored by giant pipes drilled into the bedrock and filled with concrete.
Boston 2024 estimates the 46 acres of platforms at Widett Circle will cost about $1.2 billion but say they cover fewer tracks than at Hudson Yards, making them easier to anchor.
Doctoroff is not the only connection between the two projects: Elkus Manfredi, the architecture firm that is developing the master plan for Boston’s Olympic bid, designed the retail complex at Hudson Yards, which will house the Neiman Marcus and the Keller-selected restaurants.
These days, the area is a noisy construction site. Trains rumble under the metal platforms and workers are completing the top 10 floors of the first building on the site, a 52-story tower slated to open in the spring with offices for Coach, L’Oreal, and SAP, the software firm. “It had been lying largely fallow, and people debated what to do with it for literally 80 years,” Doctoroff said. “It was the Olympic bid, and the deadline imposed by the Olympic bid, that got this thing started and enabled it to happen in record time.”