Several of the city’s top investment sales firms made their case this week to win the right to broker the sale of 1.5 million square feet of excess development rights as part of the larger Moynihan Station redevelopment plan, sources told The Real Deal.
The firms that initially responded to the request for proposals from New York State development agencies Empire State Development and Moynihan Station Development included Massey Knakal Realty Services, Eastdil Secured, Jones Lang LaSalle, Cushman & Wakefield and a joint venture between two smaller firms, City Center Real Estate and Tenant Wise, the sources said.
At least three of these firms gave presentations this week at the office of Empire State Development at 633 Third Avenue in front of a panel that included representatives from ESD, Moynihan Station Development and the Port Authority of New York and New Jersey, the insiders said.
The brokers are bidding to represent ESD in the sale of the excess development rights. Some estimated that only about 800,000 square feet of that would be sellable, because of the limited number of so-called receiving sites that would be able to buy the air rights and build large buildings. Some insiders suggested the state should create a special district in which the air rights can be transferred, which would allow for more of the rights to be sold because the group of buyers would be expanded.
The bidding process only just began but was hit with controversy last month when City Council member Corey Johnson and Manhattan Borough President Gale Brewer complained that the bidding process has not been transparent enough.
The original deadline to submit a response to the request for proposals was March 6, but that was extended to March 20. Sources said it was extended to broaden interest in the process. The Real Estate Board of New York sent out a note to members notifying them about the opportunity to market the air rights, according to the email reviewed by TRD.
A spokesperson for Cushman declined to comment. City Center’s Robert Shapiro, Massey Knakal’s Robert Knakal and JLL’s Richard Baxter declined to comment, while a representative from Eastdil did not respond to a request for comment.
Some brokers said they expected the sale process to take years. The winning broker will be awarded a listing agreement with an initial term of two years, with three one-year extensions as options, according to the agency’s request for proposals.
The air rights sale is part of the process to expand Penn Station into the James A. Farley post office building located at 421 Eighth Avenue between 31st and 33rd streets.