AvalonBay Communities is partnering with the city’s Department of Education to develop an Upper East Side project that will include 1,100 rental apartments, two new public school buildings and 20,000 square feet of retail space.
In its first-quarter earnings release Wednesday, the Virginia-based real estate investment trust said it had obtained the right to redevelop an East 96th Street parcel that, in addition to a “multifamily rental component,” will feature the construction of “two new public school buildings, public playground improvements and up to 20,000 square feet of retail.”
The project will be a “public/private partnership” with the city’s Educational Construction Fund (ECF), AvalonBay said, and “is expected to have a lengthy public approval process” before being allowed to proceed.
According to CBRE marketing materials from 2013, the site in question, at 321 East 96th Street, currently houses the School of Cooperative Technical Education and spans a full block between First and Second avenues. The city retained a CBRE team led by Darcy Stacom and Bill Shanahan to market the site, as well as two other public school properties on the Upper West Side, on behalf of the ECF.
While AvalonBay expects to spend $550 million, according to its earnings release, to develop the mixed-use rental component on land ground-leased from the city, its construction of the school facilities will be financed by the ECF “through the issuance of tax-exempt bonds,” according to the marketing materials.
Under the ECF’s “special permit scheme,” the property at 321 East 96th Street features more than 956,000 buildable square feet – with more than 149,000 square feet of that zoned for school use and nearly 807,000 square feet for “residential” or non-school use.
The School of Cooperative Technical Education would be rebuilt on the site, according to the marketing documents, while AvalonBay’s ground lease on the “non-school portion” of the property would be for 99 years.
Under the ECF’s “long-term lease model,” income from AvalonBay’s lease payments on the property would fund the city’s debt service on the tax-exempt bonds used to finance construction of the school buildings.
Neither AvalonBay nor the city’s Department of Education returned requests for comment.
AvalonBay filed plans last year for a new 33-story, mixed-use residential tower on the former site of the American Bible Society’s headquarters, near Columbus Circle.