Cohen Bros. to pay $22.5M for 58.8K of Midtown East air rights from St. Barts

By Adam Pincus

Charles Cohen’s Cohen Brothers Realty signed a contract to pay a total of $22.5 million to acquire 58,800 square feet of development rights from St. Bartholomew’s Church for the redevelopment of 3 East 54th Street in Midtown East.

Cohen Brothers plans to demolish and replace the midblock, mid-century office tower, benefitting from the East Midtown rezoning passed in 2017. PincusCo first reported the contract, but not the price, between Cohen Brothers and St. Barts in June.

Because the church is a nonprofit institution, the sale must be approved by a state supreme court judge, and St. Bartholomew filed a petition seeking approval of the sale. No index number has been assigned, but a link to the filing is here.

Not all of that $22.5 million will go to the church, however. Cohen Brothers will make a required payment of 20 percent of the air rights purchase price, or $3.528 million, to the East Midtown Public Realm Improvement Fund. The city’s Landmark Preservation Commission and the chairperson of the City Planning Commission also need to sign off on the sale.

The balance will go to St. Barts in two parts. The larger will be a $17.64 million payment for the air rights at a price of $300 per square foot. In addition, there will be a series of nonrefundable deposit payments that will total $1.617 million and that are not to be credited against the final price.

The sale leaves the church with 466,200 square feet of excess development rights to sell. At the $300 per foot valuation of the current transaction, that would yield $140 million.

In the petition, St. Barts says an appraisal done at the time of its sale of 50,000 to JPMorgan Chase, the value of development rights was $350 per foot. A new valuation done in July 2020 pegged the value of such development rights at $265 per foot.