City may take a 20 percent cut from Midtown East landmarks that sell their air rights

November 23, 2016

At the end of August, the city released its long-awaited, very controversial Midtown East Rezoning plan. In addition to allowing 16 new towers to spring up in the area bound by Madison and Third Avenues and 39th and 50th Streets, the upzoning will “permit owners of landmarked buildings to sell their air rights across the district, rather than just to adjacent properties like the current law dictates,” as 6sqft previously explained. The following month, the city embarked on a study of these unused development rights, which would amount to an additional 3.6 million square feet over the next 20 years. And part of their conclusion is that they’re considering taking a 20 percent cut of these air rights sales, reports Politico.

One Vanderbilt, KPF Midtown East, SL Greene, Rezoning, Supertall Skyscrapers (14)
Conceptual image depicting all the proposed sites of the East Midtown rezoning fully built out. Courtesy CityRealty

The bulk of the landmarks in question are religious institutions such as St. Bartholomew’s Episcopal Church and Central Synagogue. For many of these sites, declining membership has led them to be land-rich, but cash-poor. St. Patrick’s Cathedral is the biggest player with roughly 1.17 million square feet of available development rights, enough to erect a building the size of the Chrysler Building.

According to Alicia Glen, deputy mayor for housing and economic development, the fees, for which there may be a floor price, would go towards infrastructure improvements, likely those related to the five-year, $210 million plan to significantly upgrade Grand Central’s subway station. But the Real Estate Board of New York and the Archdiocese of New York are concerned about the city taking too large a share. REBNY president John Banks said he worries that a floor price “runs the risk of impeding sales, especially in a down market, and would have the unintended consequence of generating less revenue for East Midtown transit improvements.”

In other news related to the Midtown East Rezoning, yesterday the Landmarks Preservation Commission landmarked 11 sites in the area. If any of these properties have available air rights, they’ll be affected by the proposed city fees.

[Via TRD via Politico]


Get Insider Updates with Our Newsletter!

More: Policy
Location: Midtown East

Leave a reply

Your email address will not be published.

Your email address will not be published. Required fields are marked *