The Real Deal New York

Howard Hughes Corp. pays $31M for Seaport air rights

JPMorgan Chase operates special air-rights bank
By Rich Bockmann | February 11, 2015 04:40PM

UPDATED, February 13, 12:35 p.m.: The Howard Hughes Corp. paid roughly $31 million to buy more than 300,000 square feet of air rights at the South Street Seaport, property records filed yesterday show.

The Dallas, Texas-based development firm, whose proposed 42-story residential tower on the East River is a source of controversy, paid $30.8 million to buy 333,329 square feet of air rights from a consortium of banks that owns the air rights above the South Street Seaport Museum and a handful of properties on the block north of Front Street, property records filed yesterday show.

While air-rights transfers are generally restricted to adjacent properties, the city created a special transfer district over the seaport area intended to preserve its historic character. The district allows property owners to sell their unused rights to a bank, which can in turn sell them off to developers.

The seller was listed as JPMorgan Chase, which acts as an agent for the bank.

The seaport area itself, which Hughes controls through a land-lease with the city, is in a state of disrepair, and the developer has submitted a $305 million proposal that includes infrastructure improvements and public-investment benefits, as well as the luxury tower.

The controversial project, which has already been scaled back, is being met with strong community opposition, notably from local Councilwoman Margaret Chin and Manhattan Borough President Gale Brewer.

The Hughes corporation has no immediate plans for the air rights.

Senior Executive Vice President Chris Curry said the company’s “immediate priority is the rebuilding of Pier 17 – bringing transformational dining, shopping, entertainment, and cultural experiences that will draw New Yorkers back to the district – and advancing our proposed mixed-use project and $305 million worth of vital infrastructure and community investments.”

This post was updated to include a statement from the Howard Hughes Corporation.

Correction: The air rights were not transferred to a specific receiving site.