Goldman, Sachs & Co. has pulled out of a partnership with the Related Cos. to develop the 26-acre East and West Side Rail Yards in Manhattan — also known as the Hudson Yards — the parties confirmed yesterday.
The developer and investment bank had been in negotiations with New York’s Metropolitan Transportation Authority to lease the land and build a platform over the yards on which residential and commercial buildings would be constructed.
The deal was expected to raise $700 million for the MTA’s capital program over several years and the issuer would have the option to bond against the lease if it chose to do so.
A spokeswoman for Goldman Sachs declined to comment.
A year ago, the partnership received a one-year extension from the MTA to negotiate the lease agreement after citing difficulties from the economic downturn and the credit crunch. The authority has now given Related Cos. a two-month extension to complete the deal, an MTA spokesman said yesterday.
Related spokeswoman Joanna Rose said Goldman informed them last week that it would no longer be a minority partner on the deal. Rose declined to comment on why they pulled out.
Related is not actively seeking a new development partner, she said, but “due to the size of the deal we always knew that there would be many partners in this deal.”
The design process for the platform alone will to take up to 18 months, according to Rose.
“We have no time frame on breaking ground,” she said. “It’s really going to be determined by market conditions and when the market returns.”
