Hudson Yards Infrastructure Corporation
Hudson Yards Infrastructure Corporation (HYIC), a not-forprofit local development corporation, was established to provide financing for infrastructure improvements to facilitate economic development on Manhattan’s far west side. Improvements include the extension of the No. 7 subway line west and south, construction of a park, as well as the acquisition of development rights over the MTA rail yards
In December 2006, HYIC issued its first series of bonds in the principal amount of $2 billion. HYIC completed its second issuance of $1 billion of bonds in October 2011. Principal on the HYIC bonds is being repaid from revenues generated by this new development, notably payments-in-lieu-of-property taxes (PILOT) on the commercial development and various developer payments. To the extent these revenues are not sufficient to cover interest payments, the City has agreed to make interest support payments (ISP) to HYIC subject to appropriation.
In May 2017, HYIC issued approximately $2.1 billion of refunding bonds which refinanced all of its initial $2 billion bond issue and a portion of its second bond issue under a new legal structure. This refinancing allowed HYIC to remit approximately $110 million of accumulated revenues for City benefit in 2017. Moreover, the refunding enabled HYIC to transfer to the City in the future any excess revenues over and above amounts needed for HYIC debt service.
In August 2018, the City Council approved an additional $500 million of bond issuance supported by ISP to finance additional infrastructure improvements to expand the Hudson Park & Boulevard from W. 36th Street to W. 39th Street. HYIC has obtained financing for the additional infrastructure investments in the form of a bank loan at short term interest rates.
Given the ongoing development in the Manhattan’s far west side, revenues received by HYIC have accelerated. Collections of PILOT revenue and tax equivalency payments continue to increase. Additionally, since the beginning of fiscal year 2019, HYIC received approximately $50 million from payments in lieu of mortgage recording tax and district improvement bonus.
The No. 7 Subway extension was constructed by the MTA and began service in September 2015. The secondary entrance to this station located at W. 35th Street and Hudson Boulevard East opened in September 2018.
Phase I of the Hudson Park and Boulevard opened to the public in August 2015 and is managed by the Hudson Yards Hell’s Kitchen Alliance Business Improvement District. Expenditures for land acquisition for Phase II of the Hudson Park and Boulevard will commence in the second half of calendar year 2019.