City studying the cost of allowing landmarked Midtown East properties to sell their air rights

Last week, the city released their long-awaited Midtown East Rezoning plan, a controversial upzoning of the area bound by Madison and Third Avenues and 39th and 50th Streets that would encourage taller, more modern office towers to attract commercial tenants. One of the debated points is the proposal to permit owners of landmarked properties to sell their air rights across the district, whereas now they can only be transferred to sites directly adjacent or above the existing structure. The city has now embarked on an appraisal of these unused development rights, which amount to 3.6 million square feet and will likely be distributed to the 16 new towers that the rezoning would yield over the next 20 years.

As Crain’s explains, hundreds of millions of dollars are at stake, which is part of the reason Mayor Bloomberg’s 2013 attempt at the rezoning failed–opponents were concerned about “the difference between what could be built on a given parcel (such as a soaring office tower) and what actually sits on the site (a church or synagogue a few stories tall).”

Conceptual image depicting all the proposed sites of the East Midtown rezoning fully built out. Courtesy CityRealty

Religious institutions such as St. Bartholomew’s Episcopal Church and Central Synagogue make up the bulk of the landmarked properties in question, though mid-century office tower Lever House is also a player. St. Patrick’s Cathedral–who recently completed a $177 million restoration–is perhaps the biggest site in question. They alone have roughly 1.17 million square feet of available development rights, enough to erect a building the size of the Chrysler Building. But because the Cathedral is ringed by tall office buildings, it doesn’t have the opportunity to transfer its rights under the current zoning laws.

Therefore, the Archdiocese of New York has thrown its support behind the plan and is working with the city to negotiate what percentage of the sale the city would take. “Early estimates have ranged from 20 percent to 40 percent of the total sale price, which would generate tens of millions of dollars. Proceeds will be used to fund public space improvements in midtown east,” says Crain’s.

Overall, the rezoning will increase the maximum density by 30 percent in the area surrounding Grand Central; it will also increase along Park Avenue and near subway stations north of the Terminal. The city expects this to result in 16 new towers that will boast 13.4 million square feet of office space, 119 residential units, and 600,000 square feet of retail.

[Via Crain’s]

RELATED:

• City releases Midtown East Rezoning plan; could add 16 new towers
• Landmarked Religious Institutions in Midtown East Look to Change Air Rights Rules
• Churches Across Brooklyn Are Hot to Sell Their Holy Land for Millions
• The Air Up There: New Map Shows Untapped Development Potential of Every Manhattan Property