HUDSON YARDS — The city has shelled out tens of millions of dollars more than it anticipated to cover interest-support payments on the sprawling Hudson Yards development, a report revealed.
In 2005, the city created the Hudson Yards Infrastructure Corporation (HYIC) to fund improvements on the far West Side, including the 7-train subway expansion and the tentatively named Hudson Boulevard Park, via $3 billion in bonds.
Revenue from taxpayers moving into the neighborhood was supposed to cover interest on the bonds, but the city's Independent Budget Office found the city has given HYIC nearly $360 million in interest-support payments since 2006.
A Cushman and Wakefield study released in 2006 estimated those payments would cost between $7.4 million and $205.3 million, the IBO report said.
The report noted the Hudson Yards project would likely bring in about $846 million in development revenues for HYIC by the end of 2016 — less than Cushman and Wakefield's projected range of between $986.6 million and $1.3 billion.
HYIC also brought in $266.1 million in revenue that wasn't included in the Cushman and Wakefield forecast, bringing its actual revenue to approximately $1.1 billion, the report said.
The report indicated more recent growth could be a positive sign.
“...[M]uch of the revenue has come in over the past two years, suggesting some acceleration in these revenue sources,” the report said.
This year, HYIC’s development revenues were higher than anticipated, allowing the city to reduce payments on Hudson Yards interest costs by $121.1 million over the next few years, according to the report.
In a statement, HYIC President Alan Anders maintained the development would "cost the city nothing" in the 2016, 2017 and 2018 financial years, providing an "unexpected boon."
"In actuality, Hudson Yards has been and continues to be a financial success for the city," he said.
The report was released on the same day Hudson Yards developers Related and Oxford Properties Group welcomed Coach employees to the newly opened 10 Hudson Yards.
The office building is the first of the Hudson Yards buildings to open, a release said.
