The Real Deal New York

Extell makes play for Port Authority’s Hudson Yard air rights

Agency to vote Wednesday on firm's $30M bid for space above Dyer Avenue

September 16, 2014 02:45PM
By Rich Bockmann

Extell's development site at 429 West 36th Street

Extell’s development site at 429 West 36th Street

Gary Barnett’s Extell Development Corp. is looking to buy at least $30 million worth of air rights from the Port Authority of New York & New Jersey for a residential development site it owns in the Hudson Yards neighborhood, according to agency documents.

Extell owns three properties between Ninth and 10th Avenues on the far West Side running block-through from 36th to 37th streets along Dyer Avenue, the sunken roadway that snakes from the Lincoln Tunnel to 30th Street. Extell’s site is surrounded by a number of hotel and residential developments in the booming neighborhood just north of the Related Companies’ and Brookfield Office Properties’ large, mixed-use projects.

The Port Authority also owns a number of properties in the area – including the air rights above Dyer Avenue – and has recently been disposing of some of those real estate assets. Earlier this month, the agency sold a property on 30th Street to the Dermot Company for $115 million.

At its regular board meeting in Jersey City on Wednesday, the Port Authority will vote on a measure to sell air rights over Dyer Ave to Extell at a minimum price of $30.5 million.

It was not clear exactly how much additional buildable space the deal would net the developer. Extell’s properties in the Hudson Yards area, which it bought for $44 million in 2012, have the potential for 85,000 square feet of buildable space.

According to the Port Authority’s agenda, Extell “wishes to develop their lots with residential buildings.” The company could not be immediately reached for comment.

One condition of the agreement would require the developer to construct a platform over Dyer Avenue and maintain approximately 4,500 square feet of public space. The Port Authority would contribute up to $2 million toward construction of the platform.

Approval from the Port Authority’s board would not necessarily seal the deal. Zoning regulations restrict Extell’s site from receiving the additional development rights, so the company would have to apply to the city for approval.

The Port Authority proposes giving the developer a 24-month window to gain city approval and close on the deal.

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