NEW YORK CITY-A plan to fund improvements at Grand Central Terminal by purchasing air rights from developers who would be allowed to build larger projects than now permitted is being criticized for undervaluing the air rights.
A new appraisal commissioned by Argent Ventures, a real estate firm that owns air rights above Grand Central Terminal, states that the air rights in the Midtown East district could sell for more than $400 a square foot. Under the transit funding plan being advanced by the Bloomberg Administration, the city would charge approximately $250 a square foot for the air rights to about 12 mostly office projects that would benefit from the legislation, according to the Wall Street Journal. The measure is headed for a vote by the City Council.
"Air rights are worth just as much as the underlying land—in fact, they represent the best part of the building, so they're worth even more," says Andrew Penson, the president and founder of Argent.
Robert Von Ancken, chairman of Landauer Valuation & Advisory, which performed the assessment for the city, valued the air rights at 65% of the value of the land.
City Councilman Daniel Garodnick says, "It's not at all clear to me that we have hit the right number, and the council will be looking at that issue closely." See story in the Wall Street Journal.
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