Agreement should clear the way for redevelopment of Deutsche Bank site

The former Deutsche Bank building site at 130 Liberty St., a.k.a. "Site 5 of the World Trade Center Redevelopment." could be sold as a result of an accord between the Port Authority of New York and New Jersey and the National September 11 Memorial and Museum, which was announced on Monday. The accord requires the Lower Manhattan Development Corp. to complete a 2006 agreement and turn over Site 5 to the Port Authority of New York and New Jersey. The site, comprising approximately 66,222 s/f, was acquired by the Lower Manhattan Development Corp. from Deutsche Bank in August of 2004. It is zoned C6-9 but is also located within the "Special Lower Manhattan District." Although it has an FAR of "15" for commercial use and "10" for residential use, this could potentially be increased to a maximum of "21.6" by combining several methods of achieving bonuses. Although there is no inclusionary housing bonus available within the district, a 20% increase to the FAR could possibly be achieved with a "Plaza Bonus." Although the zoning also permits a "Subway Station Improvement Bonus" this does not appear to be a realistic option for the site. Another option would be the purchase of transferrable development rights from a donor site that is a designated landmark and located directly across the street from the property. At first glance there does not appear to be any donor sites directly across from the property along Washington, Liberty, Greenwich or Albany Sts. Given the outlook for the downtown office market and World Trade Center land just north of this site, which is restricted to commercial development only, it is not likely that Site 5 would be purchased for office development. Apartment properties in the area typically command rents that average between $60 and $70 per s/f indicating that a new development on the subject site with a residential component would command rents north of $70 per s/f. In addition, there are approximately 19 hotel properties within the lower Manhattan neighborhood south of Chambers St., in proximity to the site, that are currently drawing hotel guests to the area. Also, the various Manhattan lodging indexes show the lower Manhattan neighborhood with increasing occupancy that is currently at approximately 88% and both increasing ADR's and Rev PAR. It is likely that this site would be purchased for a mixed-use development project consisting of a hotel on the lower floors with upper level residential apartments. Recent neighborhood land purchases for similar development uses have generally sold for prices ranging from $250 to $300 per FAR. The total size of a potential development for Site 5 could vary based upon the architectural design and its impact on mechanical core area. Notwithstanding, the fulfillment of the agreement should clear the way for re-development on this site. Robert Von Ancken, MAI, CRE, FRICS, is the chairman of the board and Jerry Sanders, MAI, MRICS, is the executive managing director of Landauer Valuation & Advisory, a division of Newmark Grubb Knight Frank, New York, N.Y. Robert has over 40 years and Jerry has over 25 years experience valuing development sites in urban markets throughout the country and working with architects, urban planners and developers on land development feasibility. Robert Von Ancken and Jerry Sanders were selected to appraise 130 Liberty Street for the insurance claim after it was severely damaged by the tragic events of September 11, 2001. Mr. Von Ancken also participated in a special "Downtown Manhattan 2020" study published by the Steven L. Newman Real Estate Institute that addressed re-development of downtown Manhattan and its infrastructure.