Tishman Speyer plans to start construction in January on a $2.7B Hudson Yards office tower if it can get a nearly $100M tax abatement from the city.

The New York City Economic Development Corp. is weighing a lucrative tax break on future payments for the 1.3M SF office development at 99 Hudson Blvd., according to public filings first reported by Bloomberg.

Tishman would provide or raise $1.2B in equity for the project and has pitched a payment in lieu of taxes deal that would total $92.2M in foregone revenue over 23 years, according to a cost-benefit analysis filed with the New York City Industrial Development Agency on Sept. 10.

If approved, the incentive would be the largest doled out under Mayor Zohran Mamdani’s administration. A public hearing is scheduled for Sept. 15.

The project is estimated to generate $274M in taxes from operations and $583M from jobs. Tishman expects 5,900 employees to work in the 49-story office building, though no tenants were listed in the document. 

In a statement, a Tishman spokesperson said the IDA application is a “critical step towards realizing” the proposed development.

“This project will transform a long-vacant lot into world-class office space while generating jobs, tax revenue, and meaningful improvements to the public realm," the spokesperson said.

NYCEDC, which the IDA is housed within, did not provide Bisnow with a comment prior to publication. 

Tishman acquired the full-block site, bounded by 36th and 37th streets and 11th Avenue and Hudson Boulevard West, in 2016. It has sat fallow for years since the Rockefeller Center-based firm first revealed plans for the tower in 2019.

Also in Hudson Yards, Tishman developed The Spiral, a 2.8M SF trophy office tower that delivered in 2023. The building has been lucrative for the firm, signing some of the priciest leases in the city in recent years. Pfizer is headquartered at the Bjarke Ingels Group-designed tower, while HSBC and AllianceBernstein also have large presences.

Early last year, the property was refinanced with a $2.9B loan package that allowed Tishman and co-owner Henry Crown to cash out nearly $1B in equity.

Other developers are pushing ahead with new projects in the neighborhood after years of little to no office construction in the city.

Related Cos. and Oxford Properties Group are building a 70-story office tower, anchored by Deloitte. They are also planning ways to advance the second phase of Hudson Yards, which could deliver as many as 4,000 new homes.

To secure the PILOT agreement, Tishman will have to convince the Mamdani administration, which could be more difficult than with its predecessors, who greenlit subsidies for Related's megaproject. The city will have to consider a variety of factors, including whether or not the project would be built without the tax abatement. 

Mamdani has focused on using city agencies to advance his key campaign pledges, including building housing, creating bus and bike lanes, and opening city-owned grocery stores. 

NYCEDC lacked permanent leadership for more than seven months before Anthony Shorris was appointed as CEO and president in late July. 

Quoting JPMorgan Chase CEO Jamie Dimon, Mamdani previously said he’s thought heavily about how to create a city that “competes” — which is the central goal of NYCEDC.

“I don't think it's necessarily through a government and policy of subsidy and tax breaks,” Mamdani told NPR in April. “I think it's through a government that delivers the highest quality of public services across the country.”