UPDATE 3-NY Hudson Yards project fails, new bidders sought

(Adds comments by mayor, developer, new paragraphs: 11, 14-16)

By Joan Gralla and Ilaina Jonas

NEW YORK, May 13 (Reuters) - New York's mass transit agency on Tuesday said talks with Tishman Speyer, the developer it chose for a $14 billion apartment and office complex, had failed after the company last week sought to delay the deal.

The agency said it is looking for another company to develop the 26-acre site it owns on Manhattan's west side.

Tishman Speyer offered the Metropolitan Transportation Authority $1 billion for the rail yards, but last week the developer tried to postpone closing on the deal until the eastern half of the site, known as Hudson Yards, was rezoned, a process that could take 18 months or longer.

It was at least the third failed attempt to develop the site whose western half has been rezoned. Former Republican Mayor Rudolph Giuliani's plan for a football stadium on the site died, as did Mayor Michael Bloomberg's Olympics stadium proposal.

"The MTA has now re-entered discussions with other interested developers and remains committed to timely development of these unique and valuable parcels of land on Manhattan's Far West Side," the biggest U.S. mass transit agency said in a statement.

Tishman Speyer this spring outbid rivals Vornado Realty Trust VNO.N and the Durst Organization by $39 million to develop the site. The other bidders were Extell Development Company, Brookfield Properties Corp (BPO.TO: Quote, Profile, Research, Stock Buzz) and the Related Companies.

By reopening the bidding, the agency risks getting a lower price for the site because the U.S. real estate market has cooled and bankers are much less willing to lend.