Kramer Levin Advises on First Hudson River Park Air Rights Transfer

Kramer Levin has advised clients Atlas Capital Group and Westbrook Partners in the creation of a new zoning mechanism to allow the transfer of development rights from Pier 40 in the Hudson River Park, for use on the St. John’s Warehouse site at Houston Street, across the West Side Highway from the Pier. Transfers of development rights from the Hudson River Park were authorized by State legislation in 2013 to generate funds to rehabilitate the Park, subject to the creation of an appropriate local zoning framework to allow such transfers. Kramer Levin, on behalf of its clients, is negotiating with the Department of City Planning to develop this zoning framework, and is seeking a rezoning and other discretionary approvals for the proposed development. Atlas and Westbrook have reached an agreement with the City of New York to buy approximately 200,000 square feet of development rights, in what will be the first project to use the new mechanism. The project, which requires public approval, would enable Atlas and Westbrook to develop buildings with approximately 1.7 million feet of floor space, including approximately 1,586 residential units, retail, hotel and/or office uses, and parking. Thirty percent of the residential units would be a mix of low-income, moderate-income, and senior housing. The Hudson River Park Trust would use the funds from the sale to repair the 15-acre Pier 40, which currently supports athletic fields and public parking, but which is suffering from severe deterioration. The project is expected to enter the Uniform Land Use Review process in the first quarter of 2016. The Kramer Levin team advising Atlas and Westbrook on land use matters is led by Land Use partner Michael T. Sillerman and includes counsel Jeffrey L. Braun and James G. Greilsheimer, special counsel Toni L. Finger and Patrick Sullivan, and planning and development specialist Marcie Kesner.