City Planning votes to raise cost of Theater District air rights
Measure now moves to the City Council
Could this be the final act for cheap air rights in the Theater District?
The City Planning Commission voted Wednesday to increase the fee charged on air-rights transfers in the special district that includes Broadway’s theaters, sending the issue to the City Council for a vote.
Developers currently make a payment of $17.60 per square foot to the Theater Subdistrict Fund when they purchase air rights from playhouses between West 40th and West 57th streets from Sixth to Eighth avenues.
These transferable development rights can normally only be moved to adjacent properties, but the city set up the special district that allows them to move more freely in 1998 as a way to help preserve the area’s showbiz industry.
But the Department of City Planning believed the contribution that developers were making to the fund was undervalued, and proposed an increase. The commission greenlit a hike Wednesday of either 20 percent of the actual sales price or 20 percent of $347 per square foot — whichever sum is higher.
The commission voted in favor of the measure with near-unanimous approval with the exception of one abstaining member, Politico reported.
“These changes to the methodology will align with the original intent of the 1998 text amendment, which established the ability for listed theaters to transfer development rights throughout the subdistrict for a contribution into the newly-created subdistrict fund that was equivalent to 20 percent of the value of the TDRs, (transfer of development rights),” commissioner Kenneth Knuckles said during the meeting. “The department’s analysis, however, showed that the proceeds of previous transfers of TDRs were all well below 20 percent of their value.”
Fred Cerullo, who abstained, said there was no proof that the “extreme” measure would fulfill the original goals of the fund.
“The floor price, which was never part of the original formula, needs to be more thoroughly analyzed in the context of an ever-changing marketplace,” he said. “Floor prices have the potential of raising activity in a down market, as opposed to letting the market drive itself. Floors can impede transactions. Further, there truly has been no data that indicates that the current price-per-square-foot formula fails to achieve the fund’s goals.”
As it moves to the Council the measure could face pushback from the Real Estate Board of New York, which called the commission’s decision “ill-advised.”
“It unnecessarily runs the risk of less resources being provided for the preservation and enhancement of many of the city’s most beloved cultural institutions,” REBNY president John Banks said in a statement. [Politico] – Rich Bockmann