Westbrook, Atlas overpaid for Pier 40 air rights: appraisal

Developers agreed to pay $100M for 200K sf of air rights for St. John's Center project
May 04, 2016 06:35PM

Westbrook Partners and Atlas Capital Group paid a 33 percent premium for 200,000 square feet of air rights over Pier 40 in Hudson River Park, according to a recent appraisal.

The developers agreed to fork over $100 million last year to acquire the air rights over the crumbling West Side pier. The rights will go toward Westbrook and Atlas’ massive St. John’s Center mixed-use development across the street from the pier, while proceeds from the deal are meant to finance needed renovations at the former cargo terminal.

An appraisal commissioned by the Hudson River Park Trust, however, valued the air rights acquired by the Westbrook and Atlas at only $75 million, according to Crain’s.

The 1.7 million-square-foot St. John’s Center project will rise on the site of the enormous, three-block-long St. John’s Terminal building, located between Washington and West streets. As presently planned, the five-building, 1,586-unit development will include two market-rate condo towers and an extensive affordable and senior housing component.

The developers hope to build up to 1 million square feet of market-rate housing on the site, as well as 300,000 square feet of affordable and senior housing and 400,000 square feet of commercial space – including retail, offices and a hotel.

But those plans – as well as the $100 million purchase of the air rights – are contingent on Westbrook and Atlas successfully securing a rezoning of the property. The rezoning process will likely begin next week, with the commencement of a lengthy public review process.

Westbrook consolidated its majority stake in the project by buying out former partner Fortress Investment Group for $200 million last year. [Crain’s]Rey Mashayekhi