JPMorgan Chase & Co. has acquired the bulk of the air rights it needs to build its new headquarters tower at 270 Park Ave. in midtown Manhattan from a partnership that controls Grand Central Terminal’s unused space, a person with knowledge of the transaction said.

The bank bought about 650,000 square feet of air rights from a partnership controlled by MSD Capital, the investment firm for Dell Inc. founder Michael Dell and his family, and New York-based real estate company TF Cornerstone, said the person, who asked not to be identified because the person wasn’t authorized to speak about the deal. The person didn’t disclose the price paid.

Todd Fogarty, a spokesman for MSD, declined to comment on the transaction, as did Jeremy Soffin, a TF Cornerstone spokesman. Andrew Gray, a JPMorgan spokesman, didn’t immediately respond to an email seeking comment. A call to Argent Ventures, which owned a minority stake in the air rights, wasn’t immediately returned. The air-rights sale was reported earlier Monday by Crain’s New York Business.

JPMorgan last week announced plans to knock down its headquarters, the former Union Carbide Building, and replace it with a 2.5-million-square-foot (232,000-square-meter) skyscraper that could be as much as 500 feet taller than the current building. The project was made possible by a New York City rezoning of the east Midtown area last year, which allowed for bigger buildings as a way to compete with other financial capitals around the world that have built more modern office towers.

Air rights can be transferred from one building to another, enabling a higher structure than zoning regulations would otherwise allow. The east Midtown rezoning requires the city to collect either $61.49 a square foot or 20 percent of the total cost of the air rights, whichever is higher, to go into an account to fund streetscape and transit improvements in the area. The rezoned area has about 3.6 million square feet of air rights from landmarks, including 1.2 million square feet linked to Grand Central Terminal.

Source:
courtesy of BLOOMBERG

by David M Levitt

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