The Real Deal New York

City could take 20% cut of Midtown East air rights sales

Officials have also floated setting a floor price
November 23, 2016 10:43AM

Midtown East and Alicia Glen

Midtown East and Alicia Glen

The city is gearing up to set a fee on the transfer of air rights in Midtown East as part of the sweeping rezoning proposal in the district.

Alicia Glen, deputy mayor for housing and economic development, told Politico that officials are considering taking a 20 percent cut from air rights sales in Midtown East. Under the rezoning proposal, the district’s 3.5 million square feet of landmarked air rights can be transferred throughout Midtown East — with a portion of the sales going to specific infrastructure improvements. The city is also considering a floor price for the air rights, but the details on that option have not yet been released.

The Real Estate Board of New York and the Archdiocese of New York — which owns a considerable chunk of the district’s air rights — have voiced concern about the city taking too large of a percentage of the sales proceeds. REBNY President John Banks said in a statement that a floor price “runs the risk of impeding sales, especially in a down market, and would have the unintended consequence of generating less revenue for East Midtown transit improvements.”

The Department of City Planning released its rezoning proposal in August, outlining 16 sites where an additional 6.5 million square feet of office space could be added if the area is rezoned. Building owners would be able to either buy air rights to beef up their square footage or or — if within a specific transit improvement zone — contribute directly to specific infrastructure projects to benefit from the rezoning. [Politico] — Kathryn Brenzel