Battle over Manhattan air rights floor price

From Crains:

Religious organizations have joined with developers to oppose the city’s intention to set a minimum price for air rights in midtown east. The air rights would be bought by developers from existing land owners and used to build taller office towers if the city goes through with its plan to rezone the neighborhood.

The city wants to enforce a price floor because it stands to gain as much as 40% of the sale of air rights. It can use the money to improve streets and sidewalks as part of the proposed rezoning of the 78 blocks around Grand Central Terminal. Already there are concerns that allowing building owners to sell their air rights will create a glut that will depress prices. Developers would like to pay as little as possible, but the city wants to make sure it doesn’t allow redevelopment to happen without getting funds for upgrades.

“The floor price is a tool that ensures a minimum contribution will be made to east midtown’s public-realm improvement fund as part of each development-rights transfer,” a spokeswoman for the Department of City Planning said.

But even religious organizations in the neighborhood, such as Central Synagogue on Lexington Avenue, oppose the floor. They want to get the highest price they could in order to fund needed repairs to their landmarked buildings. And they support allowing air rights transfers over a larger area to do so—a policy they have long been pushing the city to adopt. But they worry that for small deals or if the market softens, the minimum amount might be higher than the going rate, in which case developers wouldn’t buy. Fewer transactions also would mean less money in the public-improvement fund.