Coach set to wheel into Hudson Yards
Crain’s New York 11/1/2011
By Theresa Agovino
Coach Inc. will become the anchor tenant at the first office tower to rise at Hudson Yards, sparking the start of the long-delayed massive development planned on the far West Side by Related Cos. and Oxford Properties Group.
As rumored, the luxury leather-goods maker will occupy about one third, or more than 600,000 square feet, of the 1.7 million-square-foot, 51-story building at West 30th Street and Tenth Avenue that will sit right beside the High Line. Coach will buy its stake in the building, which is being designed by Kohn Pedersen Fox Associates and is slated for completion by 2015.
The building will be the first component of the more than 13 million square feet planned for the 26-acre site, which will include three office towers, a hotel, nine apartment houses, a cultural center, a school and parkland. The $15 billion project could take as long as 15 years to complete.
“The far West Side’s potential is becoming a reality,” said Mayor Michael Bloomberg at a press conference announcing the deal.
Developing the far West Side has been a goal of his administration since Mr. Bloomberg took office, although an attempt to build a stadium on the site failed. Still, the city funded the extension of the 7 subway line so it will reach 33rd Street and Eleventh Avenue, paving the way for viable development.
But more challenges lie ahead for the site bounded by Tenth and Twelfth avenues and West 30th and West 33rd streets. Related and Oxford need to secure more tenants before it will be cost effective for them to build the $1.6 billion platform over the rails yards that would allow for the bulk of the construction. They could choose to just build out the eastern half first, which would cost $800 million, but that still requires tenants. Related Cos. Chairman Stephen Ross has said repeatedly that the company is in negotiations with various tenants but said Tuesday that nothing would be announced before the end of the year.
“Creating a whole new neighborhood that will be the Rockefeller Center of the 21st century and beyond is truly humbling,” said Mr. Ross. “The development will be an honor, a privilege and a work of love.”
It has already been a long process. Related agreed to pay $1 billion to develop the property back in 2008 after Tishman Speyer pulled out of a deal. However, the economy started to sour after Related secured the rights, and a year later Related negotiated with the site’s owner, the Metropolitan Transportation Authority, for more time to close the deal.
Goldman Sachs Group Inc. had initially been Related’s partner in the deal but it pulled out. Last year Related teamed up with Oxford Properties on the project.
Many noted that Coach was a perfect first tenant because the 70-year-old company has already been located near Hudson Yards for half a century. It will consolidate its three different locations at the site once it is completed.
“The city is part of our DNA and its spirit is central to all that we do,” said Lew Frankfort, Coach’s chairman and CEO. “We are delighted to be staying in the area we have called home for more than 50 years and the fact that our global headquarter will be adjacent to the top of the High Line is particularly exciting.”
Coach was represented by Mary Ann Tighe, CEO of CB Richard Ellis Inc.’s New York Tri-State region, and Vice Chairman Gregory Tosko.