People who are following the negotiations over Hudson Yards on Manhattan's West Side say the $1 billion deal can still be salvaged, despite reports that it has fallen apart. Six weeks ago, the Metropolitan Transportation Authority chose developer Tishman Speyer to build a complex of office towers, apartment buildings and parks over the Penn Station railyards. Until yesterday, the parties were working out the details.

Then the MTA issued a press release yesterday afternoon saying the deal was at an impasse. Tishman Speyer is asking that its construction plan be contingent on a successful rezoning, and let's face it, the western yards rezoning will meet a lot of neighborhood opposition because of the large scale of the commercial construction. Tishman Speyer wants to transfer the risk of a failure to the MTA, which the agency apparently finds unacceptable.

However, the MTA spoke yesterday before alerting City Hall, and Mayor Michael Bloomberg today hinted that the developer's request is reasonable. The result may be just what company chief Jerry Speyer wants -- for the mayor and Gov. David Paterson to step in and keep the MTA bureaucrats in line. Whether this ultimately happens remains to be seen. Stay tuned.