"This will be the Rockefeller Center—the heart of the city—for the 21st century," said Stephen Ross, Related's chairman. "We are going to build a truly world-class site."
Lenders including Bank of America Corp. have tentatively committed to finance a construction loan of roughly $400 million for the initial 1.7-million-square-foot tower at the Hudson Yards site, according to real-estate executives briefed on the plans. In addition, a Middle Eastern sovereign-wealth fund agreed to invest with Related and its Canadian pension plan-backed partner, Oxford Properties Group, on the $1.2 billion building, the executives said.
Related is trying to finalize deals with its partners by year-end. The talks are far enough advanced, according to Related and others involved in the project, that the company feels comfortable starting on the first building, which it hopes to finish by 2015.
For future phases, the costs grow and the schedule may again be thrown off by the economy. Related needs to build an $800 million platform over half the rail yards for the second phase, and another platform for the third phase. Related would start the second phase if it secures a large tenant. Mr. Ross said the company is "far along" in talks with such companies. Last year, the developer struck a deal with handbag maker Coach Inc. to take office space in more than one-third of the first tower. Still, it was unclear at the time whether Related would be able to start work as planned, given that since the downturn, construction lending has been slow for all building except rental apartments.
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