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Sky High

Paying the highest price for the seemingly truly ephemeral: air

By Christine Haughney and Michael Corkery
Staff Reporters of THE WALL STREET JOURNAL

November 30, 2005

New Yorkers may be known for lavish spending habits that include dinner tabs the size of mortgage payments and handbags as pricey as annual 401(k) contributions, but one local developer is breaking records by paying the highest price for the seemingly truly ephemeral: air.

Manhattan developer Arthur Zeckendorf is offering more than $400 a square foot to buy the "air rights" above a Park Avenue Methodist Church and the neighboring Grolier Club, a private club for book lovers. If the deals go through, he plans to use the air rights to build a nearby luxury condominium project.

To prevent profit-seeking developers from building block after block of sun-stealing skyscrapers, city officials created air rights, which limit the size of buildings. But developers may purchase their neighbors' air rights, which give them the right to make their own buildings bigger. While Mr. Zeckendorf is offering far more than many developers have offered for these deals, he may be able to justify these prices because he can charge more for luxury condominiums on higher floors with more sunlight.

The Grolier Club approved the terms of the deal and is working through the details. On Dec. 4th, the church will vote whether to sell the 70,000 square feet of air rights for more than $30 million. Church members seem to be leaning toward taking the deal so that they can use the money to care for the 75-year-old church and offer soup-kitchen services.

Copyright 2005 Dow Jones & Company, Inc. All Rights Reserved.
 

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