City Seeks More Money from Theater Air Rights Sales
The Conservancy spoke out against proposed new City charges amounting to an almost 400% hike for historic theaters transferring air rights within the Theater Subdistrict. Theater owners, the Real Estate Board of New York, and the New York Roman Catholic Archdiocese also opposed the increase at a Council Subcommittee on Zoning and Franchises hearing on January 24.
Since the Subdistrict’s creation in 1998, theaters selling air rights have contributed a fixed dollar amount per square foot into a special Theater Fund. The City is proposing changing that charge from a flat fee to 20% of the revenue. It would also assume a minimum “floor price” of $347 per square foot, regardless of the amount received from the sale. Theaters currently pay $17.60 per square foot. The proposal amounts to an almost 400% increase. The “floor price” could further lessen the amount received by the theater if air rights values decrease.
The Conservancy supported the initial creation of the Theater Subdistrict— which runs from West 40th to West 57th Streets between Sixth and Eighth Avenues—as a way to benefit the landmarked theaters.
“We appreciate that theater owners have made major investments in restoring and maintaining these complex buildings.” The Conservancy said in a statement. “The proposed changes would decrease the financial assistance they receive to do this.”
The City Planning Department has stated that the 20% charge puts the theaters in line with the amount it proposes to charge for air right transfers within the East Midtown District. At the same time, the Department says the 20% charge proposed in East Midtown conforms to the Theater Subdistrict. The City says the proposed floor price protects against “incomplete reporting” of the amount received for air rights. All the opponents noted that transparent online reporting prevents that from occurring.
“New York’s landmark theaters are the heart of the City,” the Conservancy statement continued. “The substantial changes to the Theater Subdistrict Fund would penalize these landmark buildings and we ask you to reject this measure.”
There is no scheduled vote on the proposed text amendment yet.