Churches Selling Air Rights

lawyer for religious entities New YorkWith New York City running out of real estate, developers have nowhere to go but up. This means they are looking to purchase development rights (or “air rights”) from other institutions in order to demolish and build new structures or build on top of existing ones. Most recently, churches have gotten involved and it has resulted in a win-win: the developer gets the air rights they need for their project, and the church can use the proceeds to pay for much-needed renovations.


Curbed New York recently reported on an agreement between St. Bartholomew’s Episcopal Church and JPMorgan Chase, in which the bank would purchase approximately 550,000 square feet of air rights to build a newer and larger headquarters at 270 Park Avenue, home of the former Union Carbide building. JPMorgan will also buy additional air rights from neighboring buildings to complete its project. St. Bart’s will use the sales proceeds to make overdue structural and cosmetic renovations, according to The Architect’s Newspaper.


The transfer of air rights was not as easy as it seemed. This required the approval of the local community board, according to The Architect’s Newspaper; since the church is a landmarked property, it also needed the approval of the New York City Landmarks Preservation Commission. Further, the air rights would have to be used in the Midtown East Zoning District, which was established by the City Council in 2017 as a way to entice developers into building taller and higher-density projects and boost the business sector so that the area can remain competitive with the Financial District and Hudson Yards; in exchange, developers would make contributions to the East Midtown Public Realm Improvement Fund, which will be used by the city to pay for certain improvements in the district.


However, not all churches are successful in selling air rights; they can be outbid. The Real Deal reported that The Brook, an exclusive men’s club, negated a deal in which St. Patrick’s Cathedral offered to sell 30,000 square feet of air rights to MRP Realty and Deutsche Bank for the two entities to add four floors on its existing building located at 405 Park Avenue. The Brook, which is located next to 405 Park, was able to sell its development rights at a lower price, thanks to the city’s prezoning rules. Had St. Patrick’s been allowed to sell its development rights, the church would have stood to collect $7.2 million from the deal.


Churches look to sell their development rights as a way to generate revenue, but such air rights transfers may need various approvals and private entities may sell to developers at a lower price. For this reason, it is important to contact an attorney who thoroughly understands the religious organization law and is experienced in such unique real estate transactions. The Brooklyn and Long Island attorneys at Wingate, Kearney, & Cullen, LLP are experienced in representing religious institutions that wish to sell their air rights. For more information or to schedule a consultation, call (718) 852-5900 or fill out our contact form.


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