In a sense, 370 Jay St., the once and former headquarters for the New York City Transit Authority has come to symbolize the MTA’s bureaucratic ineptitude over the past 15 years. Since 1995 when it was first draped in scaffolding, the authority has always had the dream of renovating the building, but it never had the alleged $150 million such a project would cost. As it took out leases in Lower Manhattan, Transit continued to resist calls to sell or develop the building, and it lay empty and shrouded amidst a renaissance in Downtown Brooklyn.
Now, though, with money tight and the capital budget deficit looming large, the MTA has found fiscal responsibility, and Downtown Brooklyn may find a savior for this building. The authority announced today that it will attempt to sell or lease out nine properties throughout New York City including 370 Jay St. It will soon issue requests for proposals for these properties, and although the authority doesn’t anticipate bringing in life-changing revenues, it will be doing something with properties that have long been looked upon as institutional waste by city and state politicians.
“We are fully committed to deriving the maximum value we can from our real estate holdings, and I’m pleased that our thorough review of the properties we own or otherwise control in the City has turned up a number of opportunities,” Jeffrey Rosen, MTA Director of Real Estate, said. “All proceeds help pay for the MTA’s critical Capital Program. While these revenues represent just a very small fraction of the MTA’s capital funding needs, every bit helps.”
In addition to the Jay St. building, the MTA said the following would be put up for bids, and the authority is prepared to lease or sell properties if the price is right. The others include:
- A vacant parcel adjoining the Gun Hill Bus Depot, at Gun Hill Road and Interstate 95 in the Bronx
- A triangular parcel at Houston Street and Broadway in Manhattan
- 351 East 139th Street (between Willis and Alexander Avenues) in the Mott Haven section of the Bronx
- 707 East 211th Street near White Plains Road and Gun Hill Road in the Bronx
- A parcel on Van Sinderen Avenue in Brooklyn
- 851 Avenue I in Midwood, Brooklyn
- 103-54 99th Street in South Ozone Park, Queens
- An elongated parcel at Varick Avenue & Johnson Avenue in Bushwick, Brooklyn
Some of these properties, such as the one in Ozone Park, are simply vacant lots that the MTA is looking to develop. Others, such as 851 Avenue I in Brooklyn, are in dead-end locations that won’t be too desirable. A few of them are in front of preexisting structure or inhabit small lots in between larger buildings. It’s unclear just how much revenue the MTA can milk from those areas.
It was Jay Street though that is the most desirable, and it is Jay Street that drew the most attention. “The rest of Downtown Brooklyn has undergone tremendous and transformative growth, yet 370 Jay St. has remained a virtually vacant eyesore. The MTA has recently renovated the property’s adjacent subway station, Jay Street-MetroTech, and now the city can finally move forward with plans to transform 370 Jay St. into a job-creating economic anchor in Downtown Brooklyn, supporting the growth of neighboring Class A tenants and existing academic and cultural institutions,” Brooklyn Borough President Marty Markowitz, who has been a long-time critic of the MTA’s decision to let Jay St. lay fallow, said.
Despite the optimism though, real estate experts warned that it might be a tough sell. “It’s a good location, but the building needs a complete renovation, and leasing across all markets is down,” David Noonan of Newmark Knight Frank told The Wall Street Journal. Rough estimates put the building’s worth at around $90 million, a drop in the bucket considering the agency’s $10 billion capital gap.
But the decision to put these buildings up for RFPs is about more than just the dollars. It’s about proving to politicians that they’re making the most out of their current portfolio. It’s about disarming critics who point to real estate holdings as some sort of panacea when the dollars that generate represent one-time infusions of small amounts of cash. It is largely symbolic, but in Downtown Brooklyn, at least, this move could generate waves.
Postscript: Selling the MTA’s air rights
In addition to the decision to put these nine properties on the market, the MTA is exploring some potential air rights deals as well. The MTA is considering allowing development on top of the Michael J. Quill Bus Depot at 41st and Eleventh Ave; the parking garages near the Brooklyn-Battery Tunnel; the N train’s Sea Beach Line trench and Bay Ridge Freight Branch; and a pair of rights-of-ways along the LIRR. “We need to address these potential overbuild projects opportunistically as market conditions permit,” Rosen said. As long as such a development doesn’t stunt plans for future transit growth, the market opportunities may yet emerge.
12 comments
Sure, nothing wrong with seeing if there are any takers and if the proposals make dollars and cents for the MTA as well. Seems obvious that almost everything is being consolidated to offices at Jamaica-Archer Avenue or 2 Broadway…
Building is owned by the City of New York, not the MTA, as is all NYCTA real estate. The MTA is an operating authority, but an owner of subway property.
This what I don’t understand. Thought the building was city-owned and that was the problem why nothing was done with 370 Jay. Thought there must have been some conflict between the City and the MTA. Now the MTA is speaking as if they are the owners. So Ben, what is going on?
If the MTA is the rightful owner, how much money did they lose by allowing the building to remain nearly vacant all these years? The public deserves to know.
The City of New York is indeed the legal owner of 370 Jay Street – it was built by the Board of Transportation, the city agency created in 1923 to design, build, and operate the IND. The building dates back to the late 1940s or early 50s, although the BOT had already unified the three subway systems in 1940.
A little known fact is that the City of New York remains the legal owner of the entire built physical plant of the NYC Subway. The BOT evolved into the NYC Transit System, which in 1953 became the NYCTA, an independent city authority until it was brought under the umbrella of the state authority MTA. I’m not entirely certain of the exact legal nature of the MTA’s role, but it is probably akin to a long term lease. So for those who like to argue that the city should take the subway back from the state, well I believe it already belongs to us! (City folk that is)
Let me add that although the City owns 370 Jay St, due to the entertwined nature of the relationship between the City of NY and the MTA, the MTA stands to gain because for all intents and purposes they have run the building for over 40 years, so they have a stake in its sale. Furthermore, since the City has been skimpy with their annual contributions to the capital and operating expenses of the subway for almost 20 years, I suspect they will use the proceeds of the sale as a one time contribution towards the subway’s bottom line.
hmmm. CO http://a810-cofo.nyc.gov/cofo/.....131394.PDF
interesting, no deeds just this document
http://a836-acris.nyc.gov/Scri.....1302082001
http://gis.nyc.gov/doitt/nycitymap/ says owner is “NEW YORK CITY TRANSIT”
I did get the block and lot numbers correct. http://gis.nyc.gov/dof/dtm/map.....38;lot=111
Gotta love how 370 jay is collecting fines, i wonder if NYC or the MTA pays its own fines or it has sovereign immunity.
http://a810-bisweb.nyc.gov/bis.....equestid=1
Unless it is legally required, I’m not even sure the City will even do that much. If they do give the proceeds to the MTA, I wouldn’t be surprised if they try to spread the payments over 20 years.
The idea is good: good for the communities with vacant eyesores, and good for the politicians who point at this as a result of fiscal irresponsibility (whether true or not). But I really hate that the RFP process is being used here. It’s a way for the MTA to defer doing fair-market-analysis research, and instead let the bidders decide what they think the property is worth. It’s also administratively expensive, cumbersome, and circuitous — it will be handled by people who know buses and trains but not real estate, and I’m sure it will culminate in a very low purchase price: a steal for the buyer, and an embarrassment for the MTA. Just look at the West Side Yards deal.
There’s a reason companies like CB Richard Ellis, Vornado, and others exist. They have the expertise to know what properties are worth, and they have connections with people looking to acquire properties. They also manage the properties — something the MTA surely won’t do. (Can you imagine working on an upper floor of Jay St. and, day after day, seeing a sign on the elevator saying it will be repaired in 2014?). Right now, these buildings are a financial liability – the easiest thing would be to turn it over to a real-estate management firm to either lease it or dispose of it.
Yes. Just like they do with GCT management.
That Noonan guy is right. They would have gotten much more for 370 back in 2006/early 2007. Now it may just turn out be a fire sale. The usual poor planning.
It will be interesting to see what the City of New York has to say about the MTA selling its subway property. And what politicians from the southern rim of Brooklyn have to say about the air rights development.
Here is what you need to know about it: under NYC zoning the NYCT air rights are virtually worthless. There was a proposal for a shopping center above the Sea Beach years ago. The local pols went nuts, and any such development will now have to got through so much red tape it isn’t funny. From the zoning resolution.
Section 12-10
Railroad or transit air space (2/22/90)
“Railroad or transit air space” is space directly over a railroad
or transit right-of-way or yard, which right-of-way or yard was
open, except for structures accommodating activities incidental
to its #use# as a right-of-way or yard, and not otherwise covered
over by any #building or other structure# on or after September
27, 1962.
(7/26/01)
74-681
Development within or over a railroad or transit right-of-way or
yard
(a) In all districts, when a #development# or #enlargement#,
including large-scale developments pursuant to Section 74-
74, 78-00 et seq. or 79-00 et seq. is located partially or
entirely within a railroad or transit right-of-way or yard
and/or in #railroad or transit air space#, the City Planning
Commission may permit:
(1) that portion of the railroad or transit right-of-way or
yard which will be completely covered over by a
permanent platform to be included in the #lot area# for
such #development# or #enlargement#;
(2) any portion of the right-of-way or yard where railroad
or transit #use# has been permanently discontinued or
terminated to be included in the #lot area# for such
#development# or #enlargement#;
(3) notwithstanding the applicable district regulations,
certain #uses# may be located beneath a portion of a
permanent platform, including a platform street as
follows:
(i) any #use accessory# to a primary #use# located on
the #zoning lot#;
(ii) a #public parking garage# or #public parking lot#
provided the findings set forth in Section 74-52
and hereby made applicable, are met for such
garage or lot;
(iii) a railroad passenger station (pursuant to Section
74-62) or a railroad including right-of-way,
freight terminal, yard or appurtenance, or a
facility or service used or required in railroad
operations;
(iv) a public transit yard, vehicle storage,
warehouse, trucking terminal or motor freight
station (without limitation on #lot area# per
establishment).
(b) As a condition for granting a special permit, the Commission
shall find that:
(1) the #streets# providing access to all #uses# pursuant
to paragraph (a) of this Section are adequate to handle
traffic resulting therefrom;
(2) the distribution of #floor area# and the number of #dwelling units# or #rooming units# does not adversely
affect the character of the surrounding area by being
unduly concentrated in any portion of such
#development# or #enlargement#, including any portion
of the #development# or #enlargement# located beyond
the boundaries of such railroad or transit right-of-way
or yard;
(3) all #uses#, #developments# or #enlargements# located on
the #zoning lot# or below a platform do not adversely
affect one another;
(4) if such railroad or transit right-of-way or yard is
deemed appropriate for future transportation #use#, the
site plan and structural design of the #development# do
not preclude future use of, or improvements to, the
right-of-way for such transportation #use#.
(c) For any #development# or #enlargement# located within or
over railroad or transit right-of-way or yard:
(1) the application to be filed with the Commission for
special permit approval pursuant to this Section shall
include a site plan showing:
(i) the total #lot area# of that portion of a railroad
or transit right-of-way or yard to be covered by a
platform; and/or
(ii) the total #lot area# of such right-of-way or yard
that has been permanently discontinued or
terminated;
(2) ownership of rights to #develop# in #railroad or
transit air space# or within a railroad or transit
right-of-way or yard where such #use# has been
permanently discontinued or terminated, shall meet the
requirements of the #zoning lot# definition in Section
12-10 (DEFINITIONS);
(3) where the railroad or transit right-of-way or yard is
to be covered over by a permanent platform, such
platform shall be unperforated except for such suitably
protected openings as may be required for utilities,
ventilation, drainage or other necessary purposes;
(4) the Commission may establish an appropriate level or
levels instead of #curb level# as the reference plane
for the applicable regulations pertaining to, but not
limited to, height and setback, #floor area#, #lot coverage#, #open space#, #yards#, and minimum distance
between #buildings#;
(5) the Commission may permit #buildings# to be connected
by a bridge or tunnel, within a portion of a #street#,
provided that the street volume occupied by such bridge
or tunnel is not mapped and owned by the City, and
provided that such structure is used exclusively for
pedestrian or vehicular circulation; however, in no
event shall such a bridge or tunnel be considered as
#lot area# or generate any #floor area#; and in the
case of a bridge, the Commission shall find that such
bridge will:
(i) provide adequate vertical clearance at all points
measured from #curb level# to the soffit;
(ii) not rest upon columns or other supports that
intrude upon the #street#;
(iii) provide illumination of at least five foot
candles at the #curb level# for the #street#
area beneath the bridge;
(iv) not unduly obstruct any significant scenic view;
and
(v) provide adequate light and air to the #street# or
surrounding public spaces or #streets#.
In the case of a tunnel, the Commission may permit
#buildings# to be connected by a tunnel under a
#street#, provided the Commission finds that the tunnel
is used exclusively for vehicular circulation and is
necessary to achieve improved vehicle circulation
within the #development# and on adjoining #streets#.
(d) The Commission shall require the provision of adequate
#accessory# off-street parking spaces and loading berths
necessary to prevent the creation of traffic congestion
caused by the curb parking of vehicles generated by any
#use# permitted on the #zoning lot#, and shall determine the
required number of parking spaces and loading berths in
accordance with the purposes established in this Resolution
with respect to other major traffic-generating facilities.
The Commission may prescribe appropriate conditions and
safeguards to minimize adverse effects on the character of the
surrounding area, and may require where the #development# or
#enlargement# includes an active railroad or transit #use#, thatthe structural design of such #development# or #enlargement# make
due allowance for changes within the layout of tracks or other
structures within such #railroad or transit air space# or
railroad or transit right-of-way or yard which may be deemed
necessary in connection with future development or improvement of
the transportation system.
Prior to granting a special permit, the City Planning Commission
shall request the Metropolitan Transportation Authority and the
Departments of Transportation of the State of New York and the
City of New York to indicate within 30 days whether said agencies
have any plan to use that portion of the #railroad or transit air
space# or railroad or transit right-of-way or yard where the
railroad or transit #use# has been permanently discontinued or
terminated.
Meh, wake me when they put out an RFP for a skyscraper above Fulton.