The deal will net $52 million for the Trust, in exchange for 158,000 square feet of development rights. This follows a similar (but larger) transaction, announced at the end of 2017, in which HRPT was paid $100 million to transfer 200,000 square feet of air rights from Pier 40 to a new development at St. John’s Terminal, a former rail freight facility, which straddles Houston Street, stretching from Vandam to Clarkson Streets. That payout will cover most of the cost of rehabilitating the underwater supporting structure of Pier 40, which has been deteriorating for decades. Work on shoring up the Pier (estimated to cost $104 million) began in April, and is expected to be complete within five years.
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These rights, will enable two developers to add 158,000 square feet to the bulk of a pair of new residential towers at this parking lot, approximately one-half a mile away from Chelsea Piers. These funds are expected to be used for maintenance throughout the Hudson River Park, as well as for upgrades to its four-mile long Esplanade.
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The $52 million payment (which amounts to 35 percent less, on a per-square-foot basis, than the Pier 40 transaction) will be used for ongoing maintenance throughout the park, as well as improvements to the four-mile long Esplanade that fronts the Hudson River.
Looking to the future, HRPT still holds significant additional air rights within Pier 40. Although it would be difficult for HPRT to sell these to another developer outside of the Park (its enabling legislation bans transfers more than one block away from the waterfront), these rights could allow the development of new space on the pier itself. The Trust plans to preserve the current, recreational uses of Pier 40, which serves as an athletic facility for many local sports leagues, while also adding commercial uses, which could include offices, retail space, or a hotel.
The Trust also expects to derive significant revenue from the imminent redevelopment of Pier 57, near 15th Street, where Google has signed on as an anchor tenant. The planned office-and-retail complex, which will encompass 480,000 square feet of space, will eventually contribute several million dollars per year to the HRPT’s balance sheet.
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A similar transaction, announced at the end of 2017, netted the HRPT $100 million, in exchange for transferring development rights from Pier 40 (foreground) to the St. John’s Terminal complex (background), where a new complex of skyscrapers is planned. These funds are being used to finance repairs to Pier 40’s underwater supporting structure
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In the longer term, HRPT hopes eventually take over Pier 76 (in the West 30s, adjacent to the Javits Convention Center), which currently functions as the New York City tow pound. This facility encloses 245,000 square feet, and adjoins an upland, open-space area of another 55,000 square feet. From this total, the Trust hopes to create slightly more than 178,000 square feet (or just over four acres) of new parkland, while setting aside 122,000 square feet for commercial development.
At the Park’s southern extremity, HPRT officials have spoken publicly about the possibility of selling unused air rights from the Park’s Tribeca section to any possible redevelopment of the Borough of Manhattan Community College Campus.