Wynn, Related sweeten Hudson Yards bid with more housing as Sands looks for exit strategy

Of all the details from Wynn and Related’s updated bid, which was first reported by Crain’s, none are more noteworthy than the changes in housing commitments. The previous plan called for 1,500 apartments, which was the chief concern from opponents, including Manhattan Borough President Mark Levine.

Levine in February told Crain’s that the old proposal was “not good enough”. He later added, “There is no getting around the fact that we must create more housing, including affordable housing, to meet the need we see across the city.”

The new plan now calls for up to 4,000 units, made possible by removing a previously planned office tower. Also included in the proposal is a 5.6-acre public park, a public K-8 school, a hotel and casino operated by Wynn, and other amenities.

In a dramatic shift, aimed at regaining community and political support, Hudson Yards developers plan to increase housing at their Western Rail Yards site from 1,500 units to as many as 4,000. #W42ST https://t.co/16rxChi2Dv pic.twitter.com/XZqcJQX9Kv

— W42ST (@w42st) April 25, 2025

Related back in 2009 had originally pledged to build up to 6,000 units at the site, with a portion of those deemed as affordable. The developer told iGB previously that its allotment of 324 affordable housing units is still compliant; the units that were removed, Related said, were high-priced units that are no longer economically viable.

Earlier this month, changes to the 2009 plan were approved by the New York City Planning Commission, but in January the bid was unanimously rejected by Manhattan Community Board 4. Though a non-binding vote, it indicated how opposed local interests were to those terms. The New York City Council is now expected to vote on the new proposal in the coming weeks.

PILOT plan proposed

“Over the last few months, we met with the community and heard consistent calls to add more housing to Hudson Yards West, even as many acknowledge the unique financial hurdles of developing the site,” Related CEO Jeff Blau said in a statement to Crain’s. “We tried to think outside the box and identified a historically successful funding model that would allow us to increase the amount of housing at the site to up to 4,000 units, while still preserving the other critical benefits of the project.”

As Blau alluded to, the reshuffling of the proposal hinges on a financing structure known as payment-in-lieu-of-taxes (PILOT). PILOT programs are devised in special circumstances to lower property tax burdens on developers, in order to help facilitate economic growth from projects that wouldn’t otherwise be feasible.

Related and Wynn noted that a PILOT program has already been used to help fund the eastern portion of Hudson Yards. Excess revenues derived from the arrangement have gone straight to the city’s general fund.

“That program did more than improve local infrastructure: it has already remitted more than $500 million in excess revenue to New York City due to the economic success of Hudson Yards, with an additional $2 Billion forecasted to be remitted by 2028,” the bidders stated on the project’s website.

Atlantic City PILOT could be comparable

Those in the casino industry might shudder at the mention of PILOT. Atlantic City’s casinos operate under a PILOT program, through which they don’t pay traditional property taxes. Instead, the rate of the annual PILOT is determined based on the casinos’ combined gross gaming revenue from the prior year.

The law was enacted in 2016 as a means to ensure timely tax payments after the casinos began to contest their property assessments when several properties closed in a short span from 2014 to 2016. A 2021 amendment also removed igaming and online sports betting from the tax calculation.

Atlantic County challenged the program in court since its enactment, alleging that it was significantly shortchanged on tax revenue. The county and the state of New Jersey ultimately settled this month for $15 million. In addition to the lump sum, the county will receive quarterly casino payments through 2026. With the settlement, the county estimated it received a total of $59 million more than it would have if it had not challenged the law.

“This has been a long and expensive battle for both sides,” Atlantic County Executive Dennis Levinson said. “Past and present county commissioners and municipal officials stood by me throughout this arduous process. Their enduring support helped bring this settlement to fruition. They shared my commitment to make our taxpayers whole. Together we accomplished our goal.”

Sands searching for partner to offload bid

As Wynn and Related double down on their efforts, Las Vegas Sands (LVS) now looks for an exit strategy. The company reported last week that it was withdrawing its bid for a casino on Long Island at the site of the Nassau Coliseum. As part of that decision, LVS must now look for a third party to offload the bid to.

When announcing its decision, LVS said it “remains concerned about the impact of the potential legalization of iGaming on the overall market opportunity and project returns”. Such sentiments had been expressed by company executives on both of LVS’ previous two earnings calls.

However, LVS also said it was “in the process of attempting to secure an agreement with a third party to whom we can transact the opportunity to bid for a casino license on the Nassau Coliseum site. This would include those that may be able to address both land-based and digital markets in New York.”

Short list of potential bidders left

The latter point from Sands is noteworthy, and raises the question of who could step in for the bid. Of the original 11 bids, nine remain following LVS’ exit. Of those nine, most of the major omnichannel operators are already accounted for. This includes Wynn, Caesars, MGM and Bally’s. Tribal and non-US interests are also represented, with bids from Mohegan Gaming, the Chickasaw Nation, Hard Rock International and Genting Group.

Perhaps the biggest name without a bid is Penn Entertainment, which operates both casinos and digital platforms. But that company has its hands full at the moment, as pressure mounts for its multibillion-dollar gamble on ESPN Bet to pay off and as activist investor HG Vora attempts to wrestle away board control.

On Friday (25 April), Penn agreed to nominate two of three board members put forth by HG. Penn had reduced the number of seats up for election at its upcoming annual meeting from three to two, cutting off HG nominee William Clifford, former CFO of Gaming and Leisure Properties. HG in response called the decision a “desperate attempt to disenfranchise shareholders and evade accountability”.

“HG Vora believes the Board’s self-serving action, taken in the face of the prospect of losing three Board seats, had no legitimate corporate purpose and deprives shareholders of their fundamental right to elect directors of their choosing,” the firm said in a statement Monday.

NYSGC: No new info yet

Aside from Penn, other possible candidates include regional US operators like Cordish Companies, Boyd Gaming and Churchill Downs. But these too appear somewhat unlikely, in that macroeconomic uncertainty related to tariffs has resulted in cautious moves. Those companies, like LVS, have also expressed concerns about online gaming impacting land-based revenue. New York does not currently have legal igaming, but legislative proposals have been floated to add it.

So far this year, capital investments have swung to the conservative side or have aligned more with companies’ existing business plans. Penn has opted to invest in converting one of its Iowa riverboats to a land-based casino and Churchill has delayed $900 million worth of improvements at its flagship track. Cordish has several ongoing developments, including a just-opened casino in Louisiana and a new project in Virginia. Boyd is moving forward with significant casino projects in Nevada and Virginia.

It is unclear what hoops a prospective newcomer seeking a New York casino licence would face in joining the race so late. Official bids are due by 27 June, with licences to be awarded by year’s end. It is presumed that a new bidder could make the cut by the deadline, but the New York State Gaming Commission told iGB Monday that it has not been notified of any such interest and therefore couldn’t comment on next steps.