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As reported by The New York Times, Crain's New York and other news sources, Paul, Weiss client Metropolitan Transportation Authority (MTA) closed on the lease and sale of the airspace over its 26-acre West Side Railyards, the largest undeveloped tract of real estate in Manhattan, to a joint venture established by Related Companies and Oxford Properties Group. The deal, valued at more than $1 billion to MTA, marks a major milestone in the most significant and transformative development project in New York City's recent history.
The MTA-owned portion of the Hudson Yards development area, where the Related/Oxford development is being constructed, is located on the West Side of Midtown Manhattan, bordered by 10th and 12th Avenues and West 30th and 33rd Streets. The new mixed-use neighborhood, which will ultimately include over 12 million square feet of office, retail and residential space, including 5,000 residential units, along with 12 acres of open space, a new school, a cultural facility, and major public amenities, will rise on a platform to be constructed over the operating Long Island Rail Road train yards, and will be served by an extension of the 7 subway line to 33rd Street and 11th Avenue.
The Related/Oxford partnership commenced construction in Fall 2012 on the first 1.7 million square office building in the proposed development, which will house the world headquarters of Coach, Inc. and other major corporate tenants. The April 2013 closing leases the eastern half of the overall site to the Related/Oxford partnership for 99 years, with future purchase options. This transaction marks the first of two leases; the second, for the western half of the site, is expected to close later this year. The lease and sale revenue will support the MTA's Capital Program, which allows the MTA to maintain and upgrade its stations, tracks, rolling stock, and maintenance and storage facilities, and to expand the region's transportation network through megaprojects like the Second Avenue Subway and East Side Access.April 10, 2013