Durst Indomitable
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The Sit-Down
Location: You’re now one of four teams left vying for the West Side rail yards, down from five. How do you feel about your chances?
Mr. Durst: I think we have a 25 percent chance. … We think we have the best bid in terms of planning and the financial terms for the M.T.A. [the yards’ owner].
How long of a build-out would there be on the site?
The first building doesn’t start until around 2012. We don’t want to be finished before the 7 train [extension] is complete, which is now 2014, but it’s about an eight-year build-out from when we start building the first building.
Could that be slowed by economic conditions, meaning you would just build a few buildings, or do you really need a critical mass and build all of them?
You need to have critical mass. It may go slower in economic conditions, but we anticipate getting it built as quickly as possible.
What’s it been like working with Vornado Realty Trust CEO Steve Roth?
Very interesting—he keeps us on our toes.
How so?
He’s very intelligent and he [has] always asked very pointed questions.
A productive partnership isn’t always the case in development, when competitors work together, right?
That’s correct, yes.
Why do you think this has been different?
We share very similar philosophies of development and similar concepts of design.
What are those philosophies?
They’re in complete agreement with us in the environmental aspect. We’re going to build a highly environmentally responsible project; everything will get the highest possible LEED rating we can. But also, when we approach designs of buildings, both we and [Vornado] design from the inside out; that is, we make sure the building works for the occupant and then make the design decisions around the shape.
In your bid, you proposed a people mover from the rail yards to Penn Station.
People mover, you think of a moving walkway—it’s like a shuttle train.
How much would something like that cost?
I think it’s somewhere around $400 or $500 million.
And you would want to split that cost with some governmental agency?
The part that goes to the yard, we’re saying would be self-financed. We believe it makes the most sense to continue on to 12th Avenue and Javits, and that should be financed by the government.
Does it hurt the value of the site without a direct connector to Penn Station?
It’s a hard question to answer; we believe it’s an important part of the project.
Is the 7 train sufficient?
We think that you need both to completely serve the development.
Are there any restrictions on the bid that you wish you didn’t have?
There are lots of them.
Two of the original five firms didn’t follow the design guidelines. Do you think the site plan would be better without the guidelines?
I think that they could have allowed a little bit more flexibility. I think some of the ideas that Brookfield had, which were outside the design guidelines, as far as circulation, make a lot of sense.
Would you want to put a street grid in?
It is something that would make sense, but is not allowed under the zoning.
With the Bank of America tower, how successful is the project overall compared to where you thought it might be a few years ago?
We’re ahead of our pro forma. I had predicted $100 rents, and we’re getting over $150 [a square foot] on the upper floors.
In retrospect, does it seem like more developers should have been building after Sept. 11?
In retrospect, yes.
Did you think it was risky at the time?
I thought it was extremely risky at the time.
You’ve got one floor left to lease?
Yes.
How’s that going?
We have offers for the space, so it’s going very well.
Is it over $185 a foot?
No. … It’s over $150 a foot.
The spire on the Bank of America tower is more than 200 feet tall, and 4 Times Square has a really tall antenna. Why do you like spires so much?
Condé Nast is an antenna and it had to be that tall in order to serve the entire New York City area.
And then the spire on the Bank of America building?
This was the architect’s design.
Do you have reservations about it?
Well, I thought we could have saved a lot of money, but they didn’t think so.
With commercial rents, do you see them dropping at all?
No. Never.
Do you think they’ll stagnate for a bit?
I wouldn’t use ‘stagnate,’ but I think they’re going to level off.
Do you think there will be trouble leasing in the Trade Center towers?
I think that we’re going to see an economic slowdown; and downtown is mostly dependent on the financial services, and for a little while there will be a pause.
You only have buildings in midtown?
That’s correct.
How come you’ve kept your focus in midtown Manhattan?
My father was well known for saying he would only buy buildings he could walk to, and I always said thank goodness he lived in midtown.
What do you think of Harry Macklowe’s predicament right now?
I think Harry has always been able to pull a rabbit out of the hat at the last second, and I think that he’ll do that and come out looking just fine.
Do you think that he’ll have to sell a portion of the GM Building at least?
Yes, he’ll have to do something.
Are you interested in any of his Equity Office buildings?
We had looked at some, but we would prefer to develop our own.
You’re building a 1,700-student private school on West 57th Street. How did that come about?
We were approached by Chris Whittle and Benno Schmidt about it. It’s really their project—we’re helping in the construction, but we’re not the developers or involved in the financial aspects of it.
Is there not a more lucrative use for the land than a private school?
We’re happy with the deal we made with them.
On 57th and 12th Avenue, you still have a parcel there. What’s to come of that?
We have a number of discussions—for a while, we were considering a residential project but have decided against it. And now we’re looking at some various commercial alternatives.
Would a hotel go well there?
That’s a possibility, yes.
That’s a ways from transit.
Not if you’re on the Water Taxi. [Editor’s note: Mr. Durst is an owner of New York Water Taxi.]
The water taxi had some service reductions recently. How in general is the project going?
We, of course, are affected by the price of oil, which is four times what we thought it would be. But that’s basically made it impossible for us to provide commuter service without subsidies from the government. But our tour and travel business is going very, very well—it keeps the boats filled during the day and at night.
Is that enough to sustain it?
Our model was that we would be making our profits on that business and breaking even on the commuter runs, but as I said with the cost of oil, we’re losing money; so if we don’t operate the boats for the commuter service, it’s not going to cost us anything.
You’ve expressed discontent with the Freedom Tower—what do you think is wrong with it?
What I’d expressed is discontent with the rush to get it completed as quickly as possible in the face of what I said might be weakening demand.
Is the design a problem, or is it simply the timing?
The timing is the big issue. The design was rushed at the end when it was moved in from the street, and I think had there been more time, I think it may have been possible to come up with more practical designs. But it’s being built now.
Construction costs are rising as well, so waiting would have an effect on cost.
Not as much as sitting with an empty building.
Copyright © 2008 The New York Observer. All rights reserved.
