Moinian, Starwood Capital pay $6M for air rights at Theater District hotel site, source says

Additional square feet allows developers to up project to 34 stories from 27 stories

Developer Joseph Moinian and partner Starwood Capital Group paid $6.125 million to the Shubert Organization for 25,000 square feet of air rights that will be used for the development of a hotel at 237 West 54th Street, a source familiar with the deal said.

The additional air rights are needed to increase the size of the project, located between Broadway and Eighth Avenue, to 34 stories, from the 27 approved stories the city’s Department of Buildings has issued permits for.

Last Thursday, Moinian and Starwood closed on the purchase of air rights for about $245 per square foot from the Shubert’s Booth Theater at 222 West 45th Street, the insider said.

In November 2011, Community Board 5 threw its support behind the transfer of these development rights to allow it to build the taller building with 400 rooms, DNAinfo reported.

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In general, city development rights can only be transferred between adjacent buildings, but a 1998 zoning law allows theaters to transfer rights to any other building in the Theater District, defined as between 40th and 57th streets and Sixth and Eighth avenues.

The Shubert Organization declined to comment. Starwood and Moinian did not immediately respond to requests for comment.

Greenwich, Conn.-based Starwood, headed by Barry Sternlicht, chairman and CEO, also has a Midtown hotel project slated for 20 West 53rd Street, where it plans, along with partner Tribeca Associates, to build a 120-unit hotel.

Moinian and Starwood’s 54th Street hotel project, designed by architect Gene Kaufman, drew criticism from community residents last year who were concerned about overly rapid development in the area. On the same block, Boston Properties is developing a 900,000-square-foot office tower at 250 West 54th Street, and Harry Gross’ Broadway Granite Development is planning to build a 600-room hotel at the corner of Broadway and 54th Street.