That Related-funded Hudson Yards economic report? Here are 3 big questions it doesn t answer Study claims megadevelopment will contribute $18.9B annually to NYC, more than Iceland’s GDP
A new study claims Related Companies massive Hudson Yards project will contribute $25.6 billion to New York’s gross domestic product during construction, and another $18.9 billion annually after completion. That s bigger than the GDP of Iceland!
But the report, commissioned by Related, authored by consultancy Appleseed and published Monday under the title An Investment That s Paying Off, leaves a number of questions left unanswered. Here are three of the biggest:
1. No vacancy: The report claims that once completed, Hudson Yards will generate (directly and indirectly) more than $42.1 billion in annual output. Of that, $18.9 billion will be a net contribution to GDP (i.e. Hudson Yards’ output minus its input costs). But that’s based on the assumption that its office vacancy rate will be merely 5 percent. Is that realistic?
Midtown’s office availability rate stood at 10.6 percent in the first quarter, according to Colliers International, and signs point to a softening market. Adding millions of square feet of office space at Hudson Yards should push up vacancy rates in the medium run. And historically, most giant office projects like the Empire State Building or the World Trade Center struggled with high vacancy rates after completion. Besides, if there is near-limitless demand for expensive new off[……]