Venture Remains Committed to Moynihan; Morgan Analyst Says a Failed Project Hits Vornado’s Bottom Line
February 27th, 2008, 1:07 pm
Today, the Observer reports that the Moynihan Station Venture, a partnership between Vornado and Related, has spent over $47 million on Moynihan Station. According to the article:
The large amount of spending thus far—at a stage where planning is far from done and the public has not even seen renderings—is indicative of the tremendous value that Vornado and Related stand to gain from the project, which involves moving Madison Square Garden to the rear of the neighboring Farley Post Office.
“Nothing could be a clearer statement of our long-term commitment to Moynihan Station,” the president of the Moynihan Station Venture, Vishaan Chakrabarti, wrote to the state in May about the $47 million. The Venture represents the joint effort of Related and Vornado.
A priority of the Spitzer administration since the governor arrived in office, Moynihan Station seems to have hit some major obstacles: The Dolan family, which owns Madison Square Garden, is giving signs that it is tiring of inactivity and disagreements among the project’s multiple constituencies, including preservationists, and is considering a renovation of the existing Garden rather than a move.
Without the Garden moving, Penn Station could not be remade, and without that redo, Vornado and Related will not have access to more than five million square feet of air rights tucked away on the Garden site.
Those air rights stand out as a tremendously appealing carrot for the developers, especially Vornado, which has substantial property holdings in the area.
Earlier in the week Morgan Stanley raised concerns about the impact of a failed Moynihan Station project on Vornado Realty Trust, indicating it could knock $11 off its $94 price target for Vornado stock.