NEW YORK | 1 Vanderbilt (41 E. 42nd) | FT | FLOORS

[UTEPman]

The city will charge $250 per sq/ft!!??

That seems a little steep, does it not? Will developers even want to go higher with more air rights at that cost?

[Design-mind]

Originally Posted by UTEPman

The city will charge $250 per sq/ft!!??

That seems a little steep, does it not? Will developers even want to go higher with more air rights at that cost?

As long as the developer can recuperate those costs with the tenants.

[NYguy]

Originally Posted by UTEPman

The city will charge $250 per sq/ft!!??

That seems a little steep, does it not? Will developers even want to go higher with more air rights at that cost?

The City will be charging less than the privately owned air rights that will also be available. That leads to both critics of the plan and developers who own air rights in the area to complain that the City is "giving away" those air rights and undermining those who want to sell air rights for development.



http://www.crainsnewyork.com/article...TATE/130229846

The planning department also revealed that the city wants to sell air rights at $250 a square foot as part of an infrastructure-funding tool known as the District Improvement Bonus, or DIB. Currently, most buildings in Midtown can only be built to a certain size, but in many case, properties will be able to grow considerably under the rezoning, in some cases to double or triple their current size, as large as the Empire State Building in places.

In order to facilitate this development, though, developers must buy air rights from either the city or private property owners. The city is selling its air rights not only to encourage new office development—the entire argument for the rezoning is to keep the city's business core competitive—but also to fund public space and transportation improvements that would offset the new density being added to the neighborhood. The city has also decided that any project buying into the DIB cannot contain residential development, since that would undercut the commercially-oriented purpose of the rezoning.

Even factoring in the sale of private air rights, the department calculates that the city will generate as much as $750 million in DIB funds. The first two projects: improving the subway platforms at Grand Central along the Lexington Avenue line and creating a set of new public plazas along a Vanderbilt Avenue closed to car and truck traffic.

The department used a private appraiser, Landauer Valuation & Advisory, to come up with the $250 a foot number, which it calls a fair market value for commercial air rights. Many in the crowd, both from the community board and local property holders, worried that this would not be enough to cover the costs of the infrastructure improvements. Property owners looking to sell their air rights are concerned the city's price might undercut their own.