With all the public funding New York City has lavished on the
Yankees and Mets
for their new stadiums (with
amazingly high ticket prices
), Major League Baseball is having a field day in the big apple. MLB has also been promised
more in tax breaks to locate its start up cable network – the MLB Network LLC – in East Harlem.
The MLB Network is supposed to serve as the anchor tenant in the
office tower that Vornado Realty Trust wants to build on 125
St. and Park Ave. In March the city approved over $16 million in subsidies for Vornado’s tower in conjunction with its approval of MLB Network’s tax breaks, since Vornado claimed in its
that without the assistance it would build a retail and residential complex rather than an office tower.
Despite the subsidies, it seems now that the office tower plan may not come to fruition, at least not as originally envisioned. Last month the
that Vornado was scaling back the size of its proposed tower and seeking to renegotiate its lease with Major League Baseball due to financing problems, including difficulty attracting other office tenants.
And according to a
story this past weekend, the MLB Network is now (unofficially) rejecting the new lease terms proposed by Vornado, which would require them to rent additional space in the building and pay an extra $2 million a year. Real estate executives say the network is instead considering staying in its temporary offices in Secaucus, New Jersey, at least for another few years.
All this goes to show that subsidies are usually not the key factor in determining how development deals pan out.