Wynn Resorts and Related Companies are more than doubling the amount of housing they’re promising to sweeten their bid for a casino at Hudson Yards.
The proposal to re-zone the Western Rail Yards in Manhattan is pending a vote of the New York City Council. In anticipation of that decision, the parties behind that zoning change request seem to be trying to make the plans more appealing. Related Companies, which is collaborating with Wynn Resorts to potentially bring a casino to Hudson Yards, has increased its commitment to the residential sector of the development to address criticisms.
While the additional housing might make Council members more inclined to support the plans, the proposed financing plan for the added residential units from Related might counteract that boost. Even if the zoning change is approved, other obstacles remain for Wynn’s casino ambitions.
Related adjusts development plans to add housing
According to Kathryn Brenzel of The Real Deal, Related and Wynn “say they can build up to 4,000 residential units on the site, compared to the 1,500 apartments” originally proposed. However, that initial commitment of 1,500 units in the partnership’s $12 billion plans represented a reduction from the 5,800 units of the current zoning framework that the New York City Council approved in 2009.
Related describes those plans as no longer financially feasible and has proposed a new strategy for financing the proposal with Wynn. For as much good will as increasing the residential component might bring Related and Wynn, the current financing plan might undo it.
PILOT proposal could complicate zoning vote
Related and Wynn have a plan for how they will finance their additional housing commitment but there are doubts about whether that plan will help sell the overall project. Brenzel reports that Related and Wynn want to expand a PILOT program.
PILOT, or Payments In Lieu Of Taxes, are essentially property tax exemptions with an alternative revenue-sharing agreement.
Brenzel adds that a PILOT system has been in place for previous developments in Hudson Yards that Related has been part of. Within the confines of that development, revenue sharing has produced strong payments for the city.
However, there is no guarantee that revenue from the new developments will perform as well. It’s possible that the city could lose out on tax revenue with a PILOT structure if revenue performance does not at least match the payments the city would get from assessments on the property.
Expanding the PILOT program would require a separate action from the New York City Council. For Related and Wynn, the two are linked but the zoning vote takes precedence.
Resistance to Hudson Yards casino could persist
Renderings of Related and Wynn’s vision for the Western Rail Yards have so far not impressed everyone. A citizen group called The High Line has ran an active campaign against the proposal for many reasons, one of which is the Wynn-operated casino.
Moving closer to the original tally of 5,800 units addresses other High Line concerns to some degree. However, Related and Wynn have others to convince.
Manhattan Borough President Mark Levine has spoken out against the project. Manhattan Community Board 4 has also expressed its displeasure with the plans.
New York City Council Member Erik Bottcher, who will play multiple roles pivotal to the future of Wynn’s gambling ambitions in New York, has not voiced a stance on Related and Wynn’s plans. Bottcher’s influence will be significant on the zoning proposal and as part of a potential Community Advisory Committee in the licensing process.
The Community Advisory Committee might never move forward on Wynn’s bid if the New York City Council votes down the zoning change. Related has address the primary importance of that zoning designation with an adjustment in its proposal.
