The Bloomberg administration secretly funneled more than $9 million in city property taxes to the Hudson Yards project on Manhattan’s far West Side without informing the City Council, a Daily News investigation has found.
That $9 million is on top of $234 million the mayor gave the Hudson Yards Infrastructure Corp., the private group spearheading the new 50-block district by extending the No. 7 subway line to 34th St. and 11th Ave.
This money could have gone to regular city services but went instead to a favored project of the real estate industry.
And while Mayor Bloomberg’s aides at least negotiated the bigger subsidy with the Council, they never disclosed the $9 million they allocated to Hudson Yards from the property taxes of buildings that existed before the project began.
The Olivia, for example, is a luxury building on W. 33rd St. built in 2000, five years before Hudson Yards. Yet the Olivia’s $6.7 million property tax is now subsidizing the project, finance records obtained by The News show.
Then there’s the Glass Farmhouse on W. 37th St. Converted into luxury condo lofts in 1998, its nearly $1 million property tax is also going to Hudson Yards.
City Council Speaker Christine Quinn, whose district includes Hudson Yards, was surprised to learn about this arrangement. “ It is important that these payments are done in a transparent way,” Quinn said.
What's worse, the Hudson Yard Project Bloomberg pushed so heavily is lagging in development and thus needing more tax money to shore it up:
Scores of hotels, office buildings and apartment buildings would quickly sprout in the area, City Hall predicted .
But the Council also reluctantly agreed to subsidize possible shortfalls in the project’s revenues during the early phase.
Eight years later, new development is drastically below projections, and the bill for city subsidies keeps growing. Last year, Hudson Yards took in just $27 million in taxes from “new construction” but had to pay $114 million in debt service.
That’s why Bloomberg has repeatedly asked the Council for subsidies for the bonds.
And just how did Bloomberg get away with secretly funneling tax money from older buildings in the area to fund the project?