The board of New York's Metropolitan Transportation Authority is scheduled to vote Wednesday on the sale of nearly $56 million in unused development rights in Long Island City, Queens, two days after its finance committee approved it.
Queens Plaza Park Development LLC, a joint venture between property developer Property Markets Group Inc. and real estate investor Kamran Hakim, wants to construct an as-of-right residential building, including limited commercial space, using transferable development rights with its own.
Under city laws, an as-of-right development complies with all applicable zoning regulations and requires no discretionary action by the city Planning Commission or Board of Standards and Appeals.
The company wants to increase the height of the building, at 41st Avenue and Bridge Plaza near the MTA's Queens Plaza station, from 38 to 77 stories, making it the borough's tallest building. The company initially offered the MTA $26.9 million for the rights, then agreed to pay the $56 million, or $117 per square foot, after negotiations.
The developers intend to maintain a public park and improve access to the Queens Plaza station, which serves the E, M and R subway lines.
Jeffrey Rosen, the MTA's director of real estate, told the finance panel Monday that the new amount slightly exceeds the appraised value that an MTA-hired appraiser determined. "QPP's principals have sufficient financial resources to fulfill all obligations associated with this transaction," said Rosen.
Proceeds will go into the capital plan for 2010-2014, as needed, though some may fund the 2015-2019 plan, which is pending a state review board.
Monetizing real estate assets has been a priority the last couple of years at the MTA, notably its retail expansion at Grand Central Terminal. The authority, which intends to sell its Madison Avenue properties in Midtown after having relocated its headquarters to lower Manhattan, also divested its former headquarters on Jay Street in downtown Brooklyn, which New York University acquired in a city-brokered deal.
The MTA acquired the property in 1987 for the East 63rd Street tunnel construction, and had been using it as a staging area for the East Side Access project. As a practical matter, said Rosen, the authority could only use a fraction of development rights associated with the property.
"It's a wasting asset," he told the committee.
MTA finance committee and board member Mitchell Pally from Long Island voted against the measure on Monday, noting the lack of affordable housing units in the project. A developer in Westchester County's Harrison, recently agreed to make 5% of rental units affordable in a similar project, near a Metro-North Railroad station. The MTA operates Metro-North.
Affordable housing is also a headline initiative of New York Mayor Bill de Blasio. Board member Jonathan Ballan, who represents Westchester County, said the Queens deal would benefit the MTA financially. "I'm interested in maximizing revenue to the MTA. That's what our fiduciary responsibility is," he said.
Ballan suggested the MTA examine ways to capture more value should such projects become more profitable.
