By Orlando Lee Rodriguez
The Metropolitan Transit Authority plans to lease the land underneath its three Midtown East properties.
The Authority has enlisted Cushman & Wakefield to broker the long term net lease of 341, 345 and 347 Madison Avenue.
The 99-year lease will be for all three properties occupying a full block front. The buildings that now stand on the property will be demolished for redevelopment. Any new structure would have to include a new entrance for the new Long Island Railroad Concourse that would be operated and maintained by the MTA.
The the advisory team will consist of Jeffrey Rosen, MTA Director of Real Estate, along with Mike Rotchford, Louis Wolfowitz, Helen Hwang, and Josh Kuriloff of C&W.
The Authority issued a request for proposals yesterday (Tuesday) which must be submitted by August 14. “We feel offering the property for lease would be more advantageous for the MTA,ˮ said Aaron Donovan, spokesman for the MTA.
The MTA plans to move its headquarters to 2 Broadway in Lower Manhattan where New York City Transit, MTA Bridges and Tunnels and MTA Capital Construction are already located.
The MTA also has seven other properties available for master lease in the Bronx, Brooklyn and Queens. Those properties are currently accepting RFP’s as well.
The announcement of a long term lease on 341-347 Madison Avenue is a change of direction by the MTA which previously considered selling the properties outright, according to published media reports in 2011.
At that time, both the New York Times and Bloomberg News estimated the value of the 25,105 s/f Madison Avenue headquarters property at around $150 million.
“You can generate income and still own the asset,ˮ said Bob Knakal, chairman of Massey Knakal Realty.
“They can sell it at some point down the line. The reason for doing the lease is because you believe the value of the property will go up in the future. You will be able to take advantage of that subject to the lease.ˮ
Since that time, the Bloomberg Administration has pushed for the re-zoning of Midtown East which would allow for higher FAR’s than previously.
That proposal, supported by the real estate community, was rejected by Manhattan Community Board 5 last week and has been the target of intense criticism from preservation groups, which have submitted lists of buildings that should be landmarked, like the Yale Club, which sits around the corner from the MTA development site.
The City Council is set to vote on the re-zoning proposal after the summer, which, if passed, would require new development in Midtown East to occupy a full block front on the Avenues, which the developer of the MTA property would be required to do as per the RFP.
The MTA has owned 341 Madison Avenue, which stands on the corner of East 44th Street, since June of 1990. 343-345 Madison was obtained the same year. Building 347, the largest of the three properties, has been owned by the MTA since January of 1979, when the Authority obtained it from The Benenson Capital Company.
