The Real Deal New York

Could the Midtown East air rights floor price be on the chopping block?

A bill proposes to audit the air right sales
By Kathryn Brenzel | June 06, 2017 04:50PM

Dan Garodnick and Midtown East (Credit: Getty Images)

City Council member Dan Garodnick on Tuesday introduced a bill that will require the city to audit every air rights sale in Midtown East once it’s rezoned. If history is any indication, the mandatory audit could be a way to get rid of a controversial floor price included in the rezoning proposal.

The city proposed a similar audit in the Theater District after tossing a required floor price for air rights sales in the area in February. The proposal to rezone Midtown East includes a floor price of $393 per square foot for air rights transactions in the district. Under that plan, property owners must also contribute at least 20 percent of the sale proceeds to a public improvement fund. Some officials have cited the floor price as a means to bring transparency to the transactions, and an audit of the sales could — arguably — establish a similar level of accountability.

Still, Garodnick said the measure doesn’t necessarily mean that the city is scrapping the floor price.

“We are exploring ways to protect the integrity of the air rights transfer process in East Midtown, and an audit could be one way to do that,” he said in a statement. “To ensure that it remains an option as we evaluate the proposal, we need to get the legislative process started now.”

The proposed pricing for air rights in the district had been a sore spot for the Real Estate Board of New York, air rights owners and even some local politicians. In April, Manhattan Borough President Gale Brewer recommended that the floor price should be lowered to $250 per square foot or another mechanism to control these transfers be put in place. REBNY’s Michael Slattery indicated on Tuesday that the organization is still reviewing the bill.

Garodnick’s proposal comes as the land use review process for the Midtown East rezoning, which began in January, inches its way toward the finish line. The City Planning Commission is slated to consider the proposal on Wednesday.