New York City faces a $96 million gap for its funding of a subway extension and other infrastructure projects at Hudson Yards, the swank new business and residential district rising on Manhattan's Far West Side, a city agency said on Thursday.
The gap came to light in documents released by the Hudson Yards Infrastructure Corp in late May when the development agency sold $2.1 billion in revenue bonds to refund a portion of its $3 billion in outstanding debt, city's Independent Budget Office (IBO), a non-partisan fiscal watchdog, said.
The corporation was created by the administration of former Mayor Michael Bloomberg in 2005 to put in place transportation and other improvements necessary to get Hudson Yards, a massive privately funded development, off the ground.
The city already has provided $128 million from its own capital budget to cover project costs from fiscal years 2005 through 2016, while another $138 million is budgeted over the next five years, the publicly funded IBO said.
These costs are in addition to nearly $360 million the city has spent to subsidize interest costs on the $3 billion in bonds the corporation issued to pay for the project, the report said.
How to finance the $96 million gap is yet to be determined. The bond documents said the city could assume the extra costs through its capital program or new bonds could be issued, in which case the city could be liable for interest on the debt. Bonds could also be issued without city support, the IBO said.
Fitch Ratings in May assigned an A-plus rating to the infrastructure corporation's new revenue bonds, which will be paid off using both recurring and non-recurring revenues generated in Hudson Yards.