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New York

MTA seeks developer to demolish, rebuild Madison Avenue HQ

Site could support development of up to 600,000 square feet

Tom Prendergast, head of the MTA, and the agency's headquarters
Tom Prendergast, head of the MTA, and the agency's headquarters

The Metropolitan Transportation Authority has put out a request for proposals from developers for a 99-year leasehold interest in a parcel of three properties at 341-347 Madison Avenue, one of which currently serves as the city agency’s headquarters.

Under the terms of the net lease, a developer would demolish the existing structures at the site and redevelop the property within 12 months following the demolition, according to the RFP on the MTA’s website. Commercial brokerage Cushman & Wakefield is marketing the opportunity as the MTA’s exclusive agent, according to the document.

The RFP comes more than two years after the MTA first hinted that it might look to sell or lease the site in the face of financial pressures. A sale of the site, which could be developed into a sizable modern skyscraper, could net the agency more than $150 million, as previously reported.

The RFP did not disclose what price it would be asking for the leasehold.

The full block-front site, between East 44th and East 45th streets, has 200 feet of Frontage On Madison Avenue, and its zoning permits a variety of uses. The property will be home to the headquarters of the MTA through 2014 but will likely be delivered to the prospective lessee vacant aside from the retail components, which are home to several tenants operating under terminable leases.

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Under current zoning restrictions, a developer could build up to 376,575 square feet on the site on an as-of-right basis. If the developer were to make improvements to the subway station network (likely to The Forthcoming Long Island Rail Road concourse connection) and acquire transferable development rights from a third party, he or she could increase the as-of-right square footage to 542,268 square feet, the documents say.

In addition, the site falls within the area of Mayor Michael Bloomberg’s proposed rezoning of Midtown East, which, if it passes, would allow the developer to create a building with up to 602,520 square feet without a special permit.

The RFP calls the site “one of the best unencumbered development sites to come onto the New York City market in many years.”

Under the terms of the agreement with the MTA, the developer would pay monthly fixed-base rent payments, subject to scheduled increases of at least 10 percent every five years and base rent adjustments every 30 years.

A spokesperson for Cushman said the firm could not comment further to the information contained in the RFP. The first of round proposals is due August 14.