KBRA Affirms the New York State Urban Development Corporation Moynihan Train Hall Project TIFIA Loan at BBB-; Outlook is Stable
24 Sep 2026 | New York
KBRA affirms the long-term rating of BBB- on the New York State Urban Development Corporation (d/b/a Empire State Development) Moynihan Train Hall Project TIFIA loan. The Outlook is Stable. The rating reflects the substantial degree to which the assessed value of the Moynihan Train Hall Project (the Project) continues to lag projections as the transaction approaches the June 30, 2030 end of the Fixed Payment In Lieu of Taxes (the fixed PILOT) period. An investment grade rating remains warranted, given the effective credit backstop provided by the Metropolitan Transportation Authority (MTA).
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- The release of MTA’s obligation to replenish the DSRA cannot legally occur until at least 2033 and is subject to the satisfaction of performance conditions.
- PILOT payments are fixed at predetermined amounts through April 2030, insulating them from market valuation volatility prior to that date.
- All office space was leased to Meta in 2020 for an initial term of 15 years, subject to extension. The Meta lease is expected to provide some support for AV levels beyond the fixed PILOT period.
- PILOT payment obligations have priority relative to other Tenant obligations, and ESD can terminate the underlying Lease in the event of a PILOT default.
Credit Challenges
- The Property’s assessed value is substantially lower than originally projected, with less than four years remaining in the fixed PILOT period.
- Following the fixed PILOT period, the property may be assessed certain local taxes or special assessments from which ESD may not be exempt. The RV Tenant has the right to pay the assessment or taxes and offset such payment against amounts due under the Lease.
- PILOT payments are derived from a project area that KBRA considers narrow by size and property type.
- Renewal/re-leasing of the office space currently occupied by Meta under a lease expiring in 2035 will become a valuation consideration early in the floating PILOT period.
Rating Sensitivities
For Upgrade
- Significant and sustained improvement in Project AV prior to the end of the fixed PILOT Period.
- Consistent debt service coverage of at least 1.25x from PILOT payments.
For Downgrade
- Deterioration of credit quality or financial performance of the MTA.
- Deterioration in regional or national property values that impact rent and PILOT assumptions.
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