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- 2/23/24: Related Unveils More Details on Its Hudson Yards Casino Plan
2/23/24: Related Unveils More Details on Its Hudson Yards Casino Plan
Defining the future of real estate
Franco Faraudo & Travis Barrington
February 23, 2024
Propmodo Daily
By Holly Dutton · Feb. 23, 2024
Greetings!
Every real estate developer is a bit of a gambler. But now some of the biggest developers in New York are all vying for a half billion dollar permit that would allow them to open up a casino in Manhattan. In today’s newsletter, we take a look at The Related Company’s application to add a casino to their massive Hudson Yards development.
Here we go!
Related Companies, the developer behind Hudson Yards, is raising the stakes yet again with a $12 billion casino complex proposal. In the race for coveted New York City casino licenses (and their hefty $500 million fees), Related and its partner Wynn Resorts, face fierce competition from SL Green Realty Corporation (Times Square), Bally's Corporation (the Bronx), and Silverstein Properties (also Hudson Yards area). So, what sets Related's bid apart? Details of the plan were made public on Wednesday in a rezoning application.
The plan envisions three skyscrapers: a 2.7 million-square-foot casino that would rise 80 stories and include a 1,750-room hotel, plus retail space and restaurants. The casino would span the first five floors of the tower. A second tower, rising 1,400 feet tall, would encompass 2 million square feet of office space and a 750-seat public school. The third tower would house 1,507 apartment units, 324 of which would be affordable. This emphasis on affordable housing echoes other proposals, with Silverstein offering 100 permanently affordable units and Soloviev exceeding 510.
In 2022, the New York State budget established criteria for awarding casino licenses. Each group's proposal triggers the formation of a Community Advisory Committee, tasked with gauging public support through hearings and issuing a formal assessment. Only projects with at least two-thirds approval and zoning compliance advance. But the New York State Gaming Commission has said it would not overrule the local selection unless it found a problem with the fitness and character of the applicant.
Supporters see a potential economic boom for the city fueled by the casino's allure. But not everyone's buying into that vision. Manhattan's vibrancy and established entertainment scene raise doubts about what a casino truly adds. And some worry about the potential for increased traffic, noise, and safety issues, factors that could disrupt the neighborhood and even impact the desirability of the proposed housing component. Considering the development's location over a rail yard and next to a convention center, these concerns seem a little overblown.
A more compelling argument focuses on the nature of casino employment. These jobs are often low-paying with limited advancement—hardly a workforce solution for Manhattanites. Further, some argue casinos cannibalize existing businesses instead of generating new economic activity, draining spending away from the city's diverse restaurants and entertainment options. This is a major concern echoed in opposition to SL Green's Times Square proposal.
The long-term impact of a Manhattan casino on the economy and surrounding real estate remains unclear. With prime land at play, there may be more imaginative, community-beneficial uses for Hudson Yards. But while alternative plans might hold long-term promise, a casino in a wealthy, densely populated American city offers the clearest path to short-term profit.
Insider Insights
🧱 Backed up: According to lender KKR CMBS issuings are on pace to be up over thirty percent compared to last year.
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Overheard
Markets couldn’t predict the rise of inflation but they did surprisingly decent predicting its decline (so far)
— Rashad Ahmed (@VARshad_)
8:17 PM • Feb 21, 2024
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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.
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