$1B deal in NYC to develop West Side rail yards collapses

Tishman Speyer Properties -the owner of Rockefeller Center and the Chrysler Building -and the Metropolitan Transportation Authority couldn't complete the deal they reached in March to redevelop the 26-acre rail yards, considered one of the city's last, best building opportunities, the transit agency said.

Negotiations "reached an impasse" Thursday after Tishman Speyer sought to postpone closing the deal on one half of the rail yards until the other half was rezoned the way the developer wanted. The rezoning would need approval of City Council in a process likely to take years.

"This demand changed the economics of the proposed deals and the certainty of payments to the MTA," the agency said. "The MTA remains committed to developing these unique and very valuable parcels of land."

Agency spokesman Jeremy Soffin said in a statement later that negotiations had broken off and that Tishman Speyer no longer has development rights to the property.

Tishman Speyer spokesman Robert Lawson said Thursday that the developer had been negotiating "in good faith" with the MTA for weeks.

"We still hope to be able to complete this deal and reach an agreement that satisfies the needs of everyone," Lawson said.

Tishman Speyer won a five-month bidding war over some of the city's biggest developers, offering just over $1 billion for a 99-year lease for the rail yards on either side of 11th Avenue between 30th and 33rd Streets.

Urban planners had said the expansion on Manhattan's far West side was crucial to the city's future, as developers sought to create a third major business district in the city and a residential waterfront community that would transform a dreary neighborhood dominated by warehouses.

The governor, mayor, and several other politicians joined developers Rob and Jerry Speyer in March for a news conference next to the yards, proclaiming that decades of waiting to develop the far West Side had ended. The Speyers unveiled a scale model for four skyscrapers, thousands of apartments, parkland and a cultural center.