Battery Park City sites clinch Milsteins W.T.C. deal
By Josh Rogers
Milstein Properties made a deal last week that officials hope will speed the development of the World Trade Center site and Battery Park City.
The Lower Manhattan Development Corporation agreed to buy the lot across the street from the World Trade Center site from Milstein for $59 million. Under the deal, Milstein has the exclusive right to negotiate for the rights to develop the remaining two residential sites in Battery Park City Sites 23 and 24 at the west end of the neighborhoods ballfields [see map below].
The Milstein site at Liberty and West Sts. is part of the W.T.C. site plan and will be converted to a park with an underground ramp system for vehicles entering the trade center complex.
The L.M.D.C. had been threatening to take the property over through eminent domain. Stefan Pryor, L.M.D.C. president, said the deal avoids a potentially lengthy legal battle with the Milstein family. The family also agreed to donate $500,000 for a park in Lower Manhattan in honor of Paul Milstein, head of the real estate firm. George Arzt, spokesperson for Milstein, said it will be a new park or plaza somewhere Downtown.
The L.M.D.C. approached the Battery Park City Authority several months ago about entering into the deal, said Tim Carey, president and C.E.O. of the B.P.C.A. A few years ago, the Port Authority, owners of the W.T.C., and the L.M.D.C. inquired about a straight land swap of a Battery Park City site for the Milstein Liberty St. lot, but the talks did not advance much further, said Carey. He said if all goes well on negotiations for the neighborhoods last two residential sites, it will mean construction will begin one year from now, six months faster then it would have otherwise.
Its certainly a way to save time, said Carey. Its advantageous to both sides.
Carey expects to begin negotiating with the Milsteins soon. The two buildings will have 540 apartments and be connected by a two-story, 45,000-square-foot community recreation center with a pool and gymnasium.
The deal obligates the authority to negotiate in good faith with the Milsteins, who built three buildings in the neighborhoods south section prior to the B.P.C.A.s environmental guidelines. Those include energy and water conservation features and some use of solar power. The B.P.C.A. has awarded development rights for several lots recently and Carey said if the Milsteins dont offer fair market value for the sites, the authority will be able to begin a request for proposal process open to all developers.
He said with the neighborhoods housing market hot, it is good to fast track the project. He said Millennium Partners has already sold over half the luxury condos it is building across from the Ritz-Carlton in B.P.C. and completion of the building is still more than a year away.
The L.M.D.C. board has previously approved $44 million to buy the Milstein site and has also set aside an additional $20 million that must be approved by the board.
Once the sale is complete, the L.M.D.C. will own two parcels on Liberty St., the other being the Deutsche Bank building. The agency was set up to oversee rebuilding and help with Downtowns economic recovery and is expected to disband at some point in the future. Meanwhile, the Port Authority owns the land that will have the W.T.C. memorial and cultural buildings. The L.M.D.C. properties may become part of negotiations over the W.T.C. memorial/cultural land. The WTC Memorial Foundation, which works closely with the L.M.D.C. both figuratively and literally, will own the memorial and cultural buildings and is currently raising money to help build them.
For the Milsteins, the Liberty St. site is their second Lower Manhattan property to withstand an eminent domain threat. The family has fought with residents and the city for years over 250 Water St., a parking lot Milstein Properties owns in the South Street Seaport Historic District. All but one of their development plans for the site have been rejected by the Landmarks Preservation Commission and the one that passed a decade ago never went forward because the office real estate market tanked. When the city pledged to build a new school on Downtowns east side last year, there was talk of taking over 250 Water St. for the school, but the city made a deal to build it on Beekman St. instead.
Arzt, Milsteins spokesperson, said the two cases are not related and the family understood the added importance of making a deal at Liberty St. Two-fifty Water St. was always controversial with the community board, and in this case we all recognized this was hallowed ground, he said.