The Times ran a construction-progress update today on Mayor Bloomberg’s plan to develop the Far West Side of Manhattan.
The story doesn’t mention how drastically City Hall has had to change its financial estimates — and make actual taxpayer-cash outlays — for the project.Back in 2006, the city helped the special-purpose Hudson Yards Infrastructure Corporation issue $2 billion in bonds to fund a #7 train extension and some other improvements out at the site. The city didn’t guarantee the bonds, but promised to make interest payments on them if revenues fell short.
Not to worry, though: revenues wouldn’t fall short, at least not for long. In its original bond document, the city projected that it would have to shell out just $7.4 million in taxpayer money to cover this promise in 2008 … and that would be it (p34).
Fast forward to the real future. Last year, the city made $43 million in such “interest support payments” (p17). And over the next seven years, it expects to shell out another $294.9 million (p40).
Hudson Yards “does not expect to generate sufficient Revenues from development in the project area to pay all the interest due on its Bonds for the foreseeable future,” the latest bond document notes.
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