The Real Deal New York

Grand Central owner offers SL Green $400M for One Vanderbilt

Firm labels offer from Andrew Penson a “publicity stunt"
September 24, 2014 10:00AM

Andrew Penson, an investor who owns Grand Central Terminal, offered SL Green $400 million on Tuesday for the adjoining block on which the developer plans to build One Vanderbilt.

The move marked the latest chapter in an ongoing feud between Penson and one of the city’s largest commercial landlords, which involves a number of zoning issues, a question of air rights values and a potential lawsuit.

Penson is offering to take the reins of SL Green’s plans to build the 1,395-foot tower, which includes a provision for $210 million in subway and pedestrian passageway improvements in exchange for permission to build a tower twice the size currently permissible on the block. Those air rights, Penson told the New York Times, are worth substantially more.

SL Green, meanwhile, dismissed Penson’s offer as a “publicity stunt from an individual with a long history of litigation and obstruction of major projects,” a spokesperson for the company told the Times.

Penson also has a financial interest in the outcome of SL Green’s deal with the de Blasio administration. He would prefer to sell SL Green the unused development rights from Grand Central rather than allowing the city to permit the tall tower’s construction. The air rights, the paper reported, could be worth hundreds of millions of dollars. Under the city’s plan, SL Green would be required to make substantial improvements to Grand Central.

Penson, who purchased the railroad terminal and 82 miles of track for $80 million in 2006, stands to rake in hefty profits on the deal with the sale of 1.3 million square feet of development rights that came with the station. Those air rights were purchased for roughly $61 per square foot, and are worth as much as $600 per square foot today, he told the Times. [NYT]Julie Strickland