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October 31, 2014 12:00 AM

Port Authority loses $175M Hudson Yards tower deal

Daniel Geiger Print

The Dermot Co. has decided to drop its plans to build a soaring residential tower at Hudson Yards in a deal that was supposed to net the Port Authority of New York & New Jersey as much as $175 million.

Dermot, a large development firm that has completed several high-rise residential projects in the city, had been selected by the Port Authority during the summer to develop the site, a 25,000-square-foot parcel on West 33rd Street next to Dyer Avenue. The company agreed to pay about $115 million for the right to build a 500,000-square-foot-plus residential tower and potentially $60 million more for additional development rights.The parcel was tricky, said sources familiar with it. Part of the development involved cantilevering over a portion of Dyer Avenue, or decking over the avenue entirely from West 33rd to West 34th streets. That work, which is required because Dyer Avenue runs below grade, presented a costly step in preparing the site for development.It was not immediately clear whether the Port Authority had other builders in the wings to take over the development. In the selection process that picked Dermot in June, the agency stated that 11 developers had responded to its solicitation for offers for the site.The Port Authority did not immediately respond to a request for comment. A spokeswoman for Dermot declined to comment.
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