The conventional wisdom is no—that New York has a serious shortage of office space (less than in 1995, despite the growth since then). We need new buildings, and there isn’t much land left. But that’s not to say anything’s recessionproof. A nightmare scenario:
Say the financial industry tanks.
Financial anchor tenants like Morgan Stanley and Merrill Lynch get cold feet and walk away from new towers. Vornado, having purchased the Madison Square Garden site from the Dolans with the expectation of developing office space nearby, would be in a crunch. Political pressure would mount downtown, as the new ground zero towers sit empty, and current support from City Hall for an upzoned midtown withers.
Then the residential market follows.
Whoever had won the Hudson Yards bid would be doubly wounded, especially since the 7 train isn’t expected to come online until 2012. Suddenly, the winner would be faced with building on a very fringy site and paying debt service on a very expensive platform. The most pleasant elements of the plans—the High Line, public space—might get junked.
Moynihan Station gets scrapped—or, worse, built on the cheap.
Financial jitters could persuade the Dolans to abandon their expensive move, which would put Moynihan Station on life support. Even if the site does free up, a less flush Related-Vornado might no longer be able to finance construction of the train stations and would certainly try to dispatch the rail portion of the project fast. Amid the jostling, distinctive elements (like skylights) could fall away, and we would lose a grand rail station yet again.