The developer Albanese Organization signed a pre-lease agreement last month with the Episcopal Church of St. Peter’s in Westchester Square, the Bronx, for a 265,000 square feet of development rights and two parcels which are adjacent to a historic church. The church land, at 2500 Westchester Avenue, is not involved in the lease. The church is seeking the approval of the New York State Attorney General for the 99-year ground lease of the property. The lease includes an initial payment of $11 million and annual payments thereafter of $635,250. Albanese intends to develop affordable housing on the parcel.
The properties are a portion of lot 6 and all of lot 1 on block 3848, at the corner of Westchester Avenue and Herschell Street.
According to the petition, the Albanese Organization intends to sign a 99-year ground lease to develop affordable housing with 265,000 square feet of zoning development rights from the church. The parties entered a pre-lease, “dated April 6, 2022, for the Lease Site and a total of 265,000 square feet of zoning floor area (aka development rights) or so many as the Petitioner and Lessor agree, which is attached hereto as Exhibit D. Pursuant to the Pre-Lease Agreement, Petitioner intends to enter into a 99-year ground lease of the Lease Site to develop affordable housing materially in conformance with the form attached to the Pre-Lease Agreement (the “Ground Lease”).” The overall consideration for the Lease Site will equal a present value (using a discount rate of 5% per annum) of $70 per square foot of zoning floor area (“Land Value”) for a 265,000 square foot development, but will be adjusted based upon the total square feet of zoning floor area transferred as set forth in the Pre-Lease Agreement provided that the present value remains $70 per square foot of zoning floor area, and will take the following form (subject to adjustments in the Pre-Lease Agreement) (“Consideration”): a. A deposit of $500,000, held in escrow by the Lessor’s attorneys, Goldstein Hall PLLC (“Escrow Agent”), for a total amount held in escrow by Escrow Agent of $500,000 (and together with any Extension Deposit paid to Escrow Agent as provided in the Pre-Lease Agreement, the “Down Payment”); and b. An upfront payment of ground rent in the amount of $11,000,000 (the “Upfront Rent Payment”) less the amount of the Down Payment upon commencement of the Ground Lease; and c. Ground Lease payments at the initial base rent (“Base Rent”) for each of years 1 through 99 commencing at Closing equal to $635,250 annually and paid in 12 equal monthly installments with adjustments as set forth in the Pre-Lease Agreement.” The broker was Ariel Property Advisors. LINK