Sony is in negotiations to become the anchor tenant for Tishman Speyer's planned office tower 99 Hudson Boulevard in Hudson Yards. There is a possibility that a letter of intent has already been signed. Currently, Sony's US headquarters occupies the top 568,000 square feet at 11 Madison Avenue. Sony, like many other large corporations, is seeking newer, larger, and more collaborative work environments for its employees.
Sony signed its lease at 11 Madison Avenue in 2013, after selling its iconic headquarters at 550 Madison Avenue for US$1.12 billion in 2012 to Joseph Chetrit. Chetrit then sold the property three years later for US$1.4 billion to Olayan America, who extensively refurbished the building. The tower is distinguished by its striking Chippendale-style crown, designed by Philip Johnson and John Burgee.
Planned Location and Amenities
Although Sony's current location in vibrant NoMad, adjacent to Madison Square Park, is attractive, the 30-storey building offers no expansion possibilities. The building, originally designed in 1928 by Harvey Wiley Corbett and Dan Everett Wade, was initially intended to reach 100 storeys before the Great Depression halted construction. The Art Deco tower was only completed in 1950 and is currently owned by SL Green Realty.
It is currently unclear how much space Sony is seeking at 99 Hudson Boulevard. Erik Schmall and Allyson Bowen of Savills are representing Sony in the negotiations. Tishman Speyer has proposed 99 Hudson Boulevard as a 48-storey office building spanning approximately 1.256 million square feet. According to public documents, construction is scheduled to begin on 1st December. The planned tower will be located opposite the Javits Centre on 11th Avenue between West 36th and West 37th Street, offering unobstructed views of the Hudson River. The primary address 99 Hudson Boulevard would mean the main lobby faces the new Bella Abzug Park.
Designed as an all-electric LEED Gold building, the tower is not expected to be ready for occupancy until around 2030. Although architect Henning Larsen and initial renderings were presented in 2019, it is highly likely that the plans will be adjusted to meet Sony's specific requirements and the strategically altered needs of tenants since the COVID-19 pandemic. For example, the company's current offices at 11 Madison Avenue include a 36-seat cinema, a 110-person multi-purpose room, and another 74-person multi-purpose room with an event stage.
Tax Incentives and Financing
A current challenge for Tishman Speyer is the application to the city's Industrial Development Agency (IDA) for US$92 million in property and mortgage tax exemptions. Instead, the company would make payments in lieu of taxes (PILOT) to the Hudson Yards Infrastructure Corporation, similar to other towers in Hudson Yards. The vote on the incentive package has been postponed to 17th November. Some politicians continue to express concerns about providing incentives or support for private real estate.
Tishman Speyer predicts that the tower will generate almost US$274 million in direct and indirect taxes, plus nearly US$583 million from taxes and indirect charges arising from job creation. The building is ultimately expected to accommodate approximately 5,900 employees, tenants, and service providers. In its application to the IDA, the developer stated it would receive a loan of US$1.477 billion with equity of US$1.2 billion.
