The Handbook of Municipal Bonds

CASE STUDY 20

Developing Hudson Yards with a $2 Billion Bond Issue

James McSpiritt General Counsel Phipps Houses

 

 

 

This case study describes the $2 billion Hudson Yards Infrastructure Corporation’s bond issue that was sold at the end of 2006. It was a complicated and unique financing that provided funds for the economic development of an underdeveloped section of New York City.

The area of New York City, renamed Hudson Yards, is on the West Side of Manhattan and bounded generally by 42nd Street on the north, 11th Avenue on the west, 31st Street on the south and 8th Avenue on the east. As of mid-2007, it consisted primarily of railyards, older industrial buildings and parking lots. In the early years of the twenty-first century and under Mayor Michael Bloomberg, the city rezoned the area and through the bond issue funded the extension of subway service from Times Square to 11th Avenue and 34th Street. It is hoped that this will result not only in the westward expansion of Manhattan’s midtown office district but also in the creation of a new mixed use community that will include significant residential development, as well as a new park and boulevard.

This case study focuses on the innovative financing of the infrastructure improvements and the planning steps that were taken which will make possible the realization of the city’s vision for the Hudson Yards: the westward extension of the No. 7 subway line, the new park and the creation of a new midblock boulevard between 10th and ...