Vornado Realty Trust is moving forward with plans to expand the Otis Elevator Building as part of a new 340,000-square-foot office complex.
The real estate investment trust recently filed an application seeking zoning changes that would allow for a glassy, two-story expansion on the roof of 260 11th Avenue. Vornado also plans to construct a nine-story building on a vacant portion of the site.
The new building would have an atrium that connects to the new floors of the Otis Elevator Building. Another six-story building at 549 West 26th Street would be converted to office use.
Vornado began assembling the site in 2015 when it inked a 99-year ground lease for the 11th Avenue property and the neighboring West 26th Street building. Three years later, the company bought 537 West 26th Street, a one-story commercial building in West Chelsea, for $44 million.
Vornado plans to transfer more than 52,000 square feet of air rights from that one-story property to the project site, and to buy nearly 50,000 more from the city.
When the city downzoned West Chelsea in 2005, it created a few options for developers to increase floor area on their projects, including paying into a city-run fund dedicated to affordable housing. Vornado has not yet purchased the air rights from the city, but the deal would need to be certified by the City Planning Commission’s chair.
The Landmarks Preservation Commission approved Vornado’s vision for the Otis Elevator Building in 2019. The brick-and-stone Classical Revival building, which was constructed in 1912 for the Otis Elevator Company, is located within the West Chelsea Historic District, so Landmarks needed to sign off on the expansion.
The text amendment would revise the minimum street wall base height requirements so they match the enlargement plans for the Otis Elevator Building approved by Landmarks. It would also clarify that the site qualifies for more density. Vornado’s other development plans for the site can move forward as-of-right.
The seven-story building is home to the city’s Human Resources Administration, which is leasing 154,000 square feet of space for offices. HRA’s lease runs through October 2026.
Despite significant vacancies and other challenges in the office market, Vornado has remained committed to developing new commercial properties. The company is expected to develop at least five of the eight sites surrounding Penn Station as part of the state’s plans to fund an overhaul of the station.
Meanwhile, the REIT has been selling off older and less-profitable parts of its portfolio. It recently listed 40 Fulton Street at a discount.