Location: Could you generally talk about what you tried to accomplish with your bids for the West Side rail yards?
Mr. Barnett: When we started to look at it, to us it became clear that any project that talks about having the massive platforms that would be required to build substantial buildings over the working railways is going to be extremely difficult to succeed … We took a very, very different avenue, which is to use bridge technology—it’s technology that has been used in other uses elsewhere, but we’ve adapted it and are using it here to essentially bridge over the rail yards… So besides having the enormous benefit of not interfering with the Long Island Rail Road and making sure that commuter operations are uninterrupted, it is also way, way less expensive.
How much do you think you could save?
We would not want to disclose that now, but it is certainly in the hundreds of millions
Your architect, Steven Holl, told us that you gave him permission to do a design of his liking, setting aside the design guidelines from the Metropolitan Transportation Authority, the yards’ owner. Why have you chosen to go down that path?
Because we know Steven Holl very well and we knew that if we didn’t give him permission, he’d do it anyhow.
Many, I think, have seen the plan as architecturally bold, but something of a long shot—do you think that’s fair and how do you think the MTA will receive the bid?
Why do you think we’re a long shot?
I would think that you’re viewed as not one of the traditional titans, and don’t have an anchor tenant.
The truth is that the developers here are really the who’s who of New York real estate to a large extent, and I don’t include us in that who’s who. … Our project works, it can get built, the financial parts of it make sense, and I think that it’s superior just on its merits; but looking at the qualifications—Extell currently has under development in excess of 5 million square feet, with at least another 5 million square feet planned down the road. … I don’t think any of the other partners have that much development ongoing … I think we’re a long shot because I haven’t done enough interviews, but other than that, I think we really ought to be in the No. 1 place, both on the merits of our design and the ability to execute.
What do you think of the other bids?
They’re flawed simply because of the necessity to put the platforms over the yards, and the difficulty of doing that while there’s a working railway yard underneath. If I had to pick the design that I like personally the most—that I thought that had just straight architectural [merits]—I don’t think it’s buidlable, I’ll say that right now—but from an architectural design—I thought Tishman Speyer had a very nice architectural design.
Aside from the rail yards, do you think the far West Side will develop as successfully as the city imagines?
We haven’t seen any commercial development get going, which means that the whole Hudson Yards aren’t going yet … One has to question how fast that’s going to happen, in a big way. … There is a lot of new product, and, of course, you have the whole new Penn Station redevelopment, where, of course, Vornado and Brookfield are very active – all of which are closer in, so it’s not evident that you’re going to have enormous commercial development going on there [on the far West Side].
We haven’t even seen the same number of jobs that we had in 2000, yet we have these tens of millions of square feet of new office space on the books—could the city be overdeveloping?
There’s a lot of potential development—I don’t think we’re seeing overdevelopment. If you look at the late 1980′s, there were a lot of buildings being built on spec—you’re not seeing that here… I think it will come as the market demands, and that’s probably a good situation.
You’ve chosen Steven Holl for a number of your projects now. What do you think about the state of architecture generally in the city now?
We could certainly use some very handsome buildings, well designed, with nice artistic flair. We could use some more of those, and some more master planned projects that have that great design, because at the end of the day, great architecture is a living sculpture, and it’s nice to have great artwork so that it unifies the city.
Years ago you were a diamond trader. Can you talk some about your shift into the real estate industry?
It’s been a long time ago already, probably 15 years or so, that I’ve moved substantially into the real estate industry.
You have this perception that you’ve had this meteoric rise in the past decade, so I guess I’m just trying to understand why and how.
I don’t think it’s been meteoric; frankly, it’s been step by step over a 15-year period. If you look at some of the things we have in New York, they’ve developed over the last 10 years, some of these development sites we have have taken that long to get done. It’s just that I haven’t wanted to take a very high profile, and didn’t see the necessity, but then when you tell me I’m a long shot, I figure I’ve got to do it.
Compared to a lot of the other families in the real estate industry–they’ve been around for 100 years, 80 years. What was it like breaking into that?
I haven’t seen any significant problems with that—again, it’s been a step-by-step process, and that’s kind of the way you do it. You have a better base if you go a little more slowly.
Do you have a broader strategy that you’ve worked around, or a philosophy to your development?
I think build really high quality, both in the residential and office [sectors]—and I’ve seen very clearly that the marketplace responds.
How are the Ariels [condominiums on Broadway and 100th Street] doing? How have they sold?
They’re doing very well; we have actually five deals working right now—in today’s market, real time.
What percent sold is it?
We’re about 75 percent sold, and hopefully we’ll be sold out in the next few months.
Do you think that there’s too much push from local communities to put limits on density?
I think that limits on density have an appropriate place. In some communities, it’s not appropriate to build massive heavy towers, because their whole community has a certain flavor and a certain homogeneity.
With regard to Atlantic yards in Brooklyn—you put in the only rival bid to Forest City Ratner’s $4 billion proposal. Why did you enter the bid?
The MTA put out an RFP [Request for Proposals] in the same way they did on the Hudson Yards, we responded the same way.
But a lot of people viewed that as a foregone conclusion before the RFP was even issued. Did you not agree with that?
I hope we don’t have a
foregone conclusion on the Hudson Yards. That would make at least four bidders very sad.
The city and the state haven’t partnered with a developer publicly beforehand. What type of chance did you think you had on Atlantic Yards? Did you think that was something of a long shot? You said so, if I remember, in your cover letter [for the bid].
We are shocked—shocked—that we bid $150 million, [Forest City Chairman Bruce] Ratner bid $50 million, yet he somehow managed to get it.
In almost any community meeting for Atlantic Yards, Extell’s name comes up—still.
I think we had a very nice plan and use for that space as well then, but we know when we’re beat.
What did you think of the outcome?
I’m not going to comment on that.
It raised the company’s profile some by doing the bid, by getting on the side of opponents. Was that a factor in doing the bid?
Do you have any criticisms with the way the state handled the Atlantic yards project?
With The New York Times building, you seemed to have criticisms with the way the state handled eminent domain there.
Absolutely. We defended our property ownership there, we don’t think that that was well done—it’s in our lawsuit, we lost that battle too, and it’s kind of over with.
Are you against the use of eminent domain?
No. Eminent domain has been around for thousands of years; it’s something that makes absolute sense—sometimes the public good trumps the private. But it has to be done with a sensitive hand, and done only when absolutely necessary.
You’ve got two of the better development sites in the city on 57th Street—what are your plans for them?
We think those are two of the absolute premiere sites in New York City, if not the two best. One of them is across from Carnegie Hall, and we are planning a five-star hotel on the base and luxury condos on top. With views of the park and the city.
It will be at least 50 stories tall.
The other is to the west?
We don’t really have plans for that one currently, yet.
What’s the status of your planned tower in the Diamond District?
It’ll be designed by SOM, it’ll probably be in the 700,000- to 800,000-square- foot range—so, beautiful project, beautiful building, and I think the market really could use it.
You talked about your site just east of the Javits Center, right north of the Hudson Yards—what type of building are you planning there?
That’s planned right now to be an office building.
It’s a substantial building—about a million and a half [square feet]—I don’t really remember right now—but maybe 50 stories.
I understand you met with Governor Spitzer—it was in his public schedule—to propose moving the Javits Center to the West Side rail yards. How was that received?
I am not going to comment on any meetings we may or may not have had with the governor. But we had proposed in the past some alternative proposals—a lot of people thought it was good. The city did not care for the proposal, so as of this date, it’s gone nowhere.
What do you think about the general plans for the Javits Center? Do you think they’re going to do anything at this point?
I have no idea. I know about what I think should be done but no idea about what’s going to be done.
Would it be more cost-effective to move it to the rail yards?
Our plan had and has enormous merit, but it’s also unlikely to get done.
And that would open up the footprint there to development?
If the Javits Center just gets renovated and not expanded, would you still build a Javits hotel, which you’ve bid for?
Absolutely—we would love to build an architecturally distinct, superior hotel that would really be an add to the Javits Center. If they’re not going to get a great convention center, they at least they need a great convention hotel that will be a draw for conventioneers and other tourists.
What’s the status of the Riverside South development?
That’s going extraordinarily well. Basically we’re continuing and upgrading the development that’s gone on before us
The southernmost section—that would require city approvals. At what point will that proceed?
We are working with City Planning, and are in discussions with elected officials and the community board, and we are hoping to start that process very shortly.
What do you think of the city’s land-use review process?
I think that we, as well as other developers, have found it to be a reasonable process. We would all hope it went much quicker, there’s no question about that.
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